Not all bank robbers carry a gun and not all cyberthieves are looking to empty your bank account.
The practitioners of “synthetic fraud,” an emerging form of graft in the ever-changing world of financial crime, create fake identities stitched together with the personal details of real people in order to sign cellphone contracts, open bank accounts and receive credit cards.
Unlike traditional identity theft targeting consumers, synthetic fraud targets financial institutions and other businesses that rely on verifying electronic identity information in a world of global e-banking.
“It has been front and center, and banks have been looking at the so-called marketplace of people who are trying to obtain personal data,” said William Farrell, general counsel for the Rhode Island Bankers Association, about identity theft and bank fraud. “Banks are looking at the best way to combat that, but it is a pretty tough area to get at.”
As a developer of online-banking systems, Andera Inc. of Providence has found itself in a unique position to observe the havoc created by cyber criminals and to benefit if additional confidence and security can be brought to the marketplace.
With 550 customer financial institutions running on its network, Andera can see patterns in account openings and alert banks when certain transactions look suspicious.
Last summer, Andera launched FortiFi, a new fraud-detection product that checks new-accounts openings against the vast flow of real-time data the company processes for possible identity theft and fraud rings at work.
“We don’t share info, but we look across our entire database to see if something that is happening in one place is also happening at one of our other 550 customers,” said Andera Program Manager Andrea Hunter. “It makes the banks feel more secure, like an insurance policy.”
While traditional identity theft still exists, Hunter said synthetic fraud in particular has grown over the last several years as more records have migrated from paper into computers.
Rhode Island Bankers Association,
American Bankers Association’s Bank Capture system¸,