New data from CIFAS, the UK’s fraud prevention service, has painted a gloomy picture for the digital economy: reported instances of ID fraud are continuing to increase.
In fact, ID fraud accounted for almost half (47 per cent) of all fraud recorded in the first quarter of 2015, while cyber crime in general is this week to be confirmed as our country’s most common offence.
What is it about our personal details that makes them attractive and valuable commodities to criminals, and how can businesses reduce ID theft?
Simply put, identity theft is when your personal details are stolen and identity fraud occurs when those details are then used in a criminal activity to obtain goods or services by deception.
There are three main reasons why cases of ID theft continue to increase:
Increased social networking activity paired with careless social behaviour: Social media users are still posting a large amount of personal information on their networks. This includes date of birth, and even a phone number.
Increased smartphone adoption paired with weak mobile security: Aside from software issues, basic steps such as having a pin protected lock screen, and not saving login information on devices would help to reduce the amount of ID theft occurring (as a result of the phone itself being stolen).
Consumers continue to trust large companies while hackers continue to outsmart large companies: Experian, Home Depot, JP Morgan Chase, AshleyMadison.com, eBay, British Airways and many more have recently suffered massive data breaches as a result of hacker activity. These behemoth data carriers suffer from a lack of infrastructure agility when dealing with new cyber threats, which means that in the time it takes for them to adapt to a new threat, five more have appeared.
Your personal details are valuable because of the opportunities they may provide in the future (rather than the information they reveal in the moment of their theft). For this reason, common hacker practice is not to use the information for further criminal activity themselves but instead to sell large databases on to criminal organisations.
Companies must create a secure environment
For companies who want to avoid their name being splashed across media headlines in a negative way, creating a secure online environment is therefore business critical – 80 per cent of ID theft occurs online.
However, currently available, robust “Know Your Customer” (KYC) processes are costly and, worse, affect the customer experience so much that potential customers can be turned away during the registration/onboarding process. Just one of the battles being fought out between compliance and customer experience, right?
So, while it is probable that the companies who create a secure online process for their customers will survive, it is the businesses that can create security online while maintaining a smooth customer experience that will distinguish themselves from competitors and become industry leaders.
I’m talking about things like facilitating new user registrations by reducing the need for username and password creation – advancements in biometric technology offer potential solutions for this.
I’m talking about a way of gathering customer information in a way that suits the customer as much as it suits your business, i.e. on the platform that suits them (increasingly, mobile) – and all wrapped in an unassailable blanket of confidence and security.
This is no mean feat, which is why I can so confidently state that companies which achieve this will become leaders.
One thing is for sure: If consumers can’t easily prove who they are to businesses, and businesses can’t trust their security provisions, then the growth of our (so far successful) digital economy will stutter.
Let’s talk: Linkedin
(This article was originally posted on realbusiness.co.uk)