Current Ways of Fighting Back

Account takeover fraud saw a significant rise in 2024, causing financial losses totaling $15.6 billion, compared to $12.7 billion the previous year. This marks more than double the money lost due to new-account fraud, clearly indicating that traditional authentication methods are inadequate.

Static authentication relies on passwords or biometrics for initial verification, giving users full access upon logging in. However, once an unauthorized user gains legitimate login credentials through account takeover attacks, they can exploit this system without re-authentication. Traditional systems fail to detect such intrusions unless unusual behavior is noticed during the session.

Overcoming Legacy Systems

Many financial institutions have hesitated to adopt continuous authentication due to the complexity involved and concerns over customer friction. Legacy systems often lack the necessary advanced technology, leading them to either block legitimate transactions or allow suspicious activities because of insufficient risk signals.

Continuous authentication, powered by AI tools, monitors user behavior in real-time, identifying anomalies that deviate from normal patterns without interrupting the session. This approach can significantly reduce false positives and minimize inconvenience for customers.

Perpetual KYC

Traditional Know-Your-Customer (KYC) processes are often conducted solely during onboarding or periodically after account activation, leaving a gap where potential fraud can go undetected. This leads to situations where customer information might be incomplete or inaccurate.

Perpetual KYC uses AI tools to continuously assess risk throughout the user’s interactions with their account. This dynamic approach flags suspicious activities for manual review when necessary, ensuring that ongoing compliance and security are maintained without overwhelming users with repetitive verification requests.

More Than Just Banks

Account takeover impacts not just banking but any type of account. Unauthorized access to social media or email accounts can lead to serious consequences, such as identity theft and financial fraud.

Understanding that criminals target a wide range of account types and seek rapid expansion of their control, financial institutions must adapt their strategies beyond traditional methods. The advent of advanced technologies like generative AI and bots has necessitated a shift towards continuous monitoring based on subtle behavior changes rather than relying on major transactions or static authentication checks.

Continuous strategies are essential for combating account takeover across all sectors to enhance security and protect sensitive information from unauthorized access.