Published by Jessica Weisman-Pitts
Posted on February 15, 2022
5 min readLast updated: February 9, 2026
Add as preferred source on Google
By Robert Prigge, Jumio CEO
Financial institutions have always required vigilance against online fraud, but the COVID-19 pandemic brought new challenges and new targets to the mix. Beyond well-established schemes for identity theft, money laundering and other online fraud to guard against, one growing area of concern is deception and fraud in digital onboarding.
Robert Prigge, Jumio CEO
COVID-19 and remote work spurred a rise in digital onboarding options that allow someone to become a customer remotely, without needing to go into an office or branch location. Motivated by the pandemic and the availability of more financial services and apps online, new customers are increasingly using digital onboarding to access services that previously required in-person engagement. Unfortunately, this rise in digital onboarding is expanding the attack opportunities for fraudsters.
Let’s take a look at the ways malicious actors are exploiting digital onboarding for fraud, as well as four next-generation strategies for authentication worth adding to the digital security playbook to fight this phenomenon.
A Perfect Storm of Risk Factors for Digital Onboarding Fraud
The post-pandemic era is a favorable one for financial fraudsters in several ways. For starters, more financial institutions have embraced the all-digital model of customer onboarding for interactions that used to require a certain degree of in-person contact. At the same time, the dark web market for stolen customer data and personally identifiable information (PII) is flourishing more than ever. Together, these two trends increase financial institutions’ vulnerability to identity fraud tenfold.
Given the recent increase in security sophistication, fraudsters’ latest and most favored methods are becoming more advanced as well – including stolen photography to masquerade as a user selfie to fool a financial institution’s digital identity verification software system. Also popular among cyber thieves are manipulated driver’s licenses and the weaponization of deepfakes and other digitally altered media to replace an existing image or video with someone else’s likeness. Unfortunately, fraudsters are constantly refining their best tactics and attack collateral for multiple attacks at various institutions, or even at the same organization multiple times.
These pandemic-era challenges would be daunting enough on their own, but there’s enhanced risk because the attacks are happening at a time when many financial institutions are in the middle of major digital transformation. Such transformations were necessary as organizations sought IT resiliency amid enhanced work-from-home employment and increased online customer traffic, but many organizations still haven’t fully aligned their strategy around these new digital investments, meaning security holes may be present from recent or ongoing migration of IT facilities and data architectures.
For the above reasons, financial institutions need to up their game in identifying and protecting against digital onboarding fraud. Fortunately, they can turn to some next generation authentication strategies that can help.
4 Strategies to Minimize Digital Onboarding Fraud
Once the favored methods of financial fraudsters are better understood, financial institutions can better calibrate their approach to fighting digital onboarding fraud. Every organization will need to customize its approach based on company-specific challenges. That said, here are four advanced IT strategies that financial institutions can put to work in their favor to cut down on that risk:
Conclusion
While the rise of digital onboarding fraud is troubling, the good news is that financial institutions have some modern tools to fight back. In doing so, organizations can ensure maximum fraud prevention without creating excessive friction or authentication hurdles for the vast majority of interactions that are honest. This, in turn, enhances performance, security and resilience for financial institutions as they continue to offer remote and online convenience for customers.
This is a Sponsored Feature
Digital onboarding refers to the process of integrating new customers into a financial institution's services through online platforms, allowing them to access services without in-person visits.
Identity verification is the process of confirming a person's identity, often through documents or biometric data, to prevent fraud and ensure security in financial transactions.
Liveness detection is a security measure used to verify that a biometric sample, such as a selfie, is taken from a live person rather than a static image or video.
Transaction monitoring involves the continuous analysis of financial transactions to detect suspicious activities, such as money laundering or fraud, in real-time.
Privacy protocols are guidelines and measures implemented by organizations to protect personal data and ensure compliance with data protection laws.
Explore more articles in the Technology category
