Veriff's H1 2021 Fraud Report is live, and we break down our expert's analysis on how fraud rates are changing the crypto, fintech, and mobility spaces.
Ashley Nelson, August 31st, 2021
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Veriff published its H1 2021 Identity Fraud Report this week (and it’s available to download for free). Our fraud report looks mainly at three major industries: Crypto, Fintech, and Mobility. All of these industries have been affected by COVID-19 in different ways and that’s clear when you look across the history of our fraud report.
Across industries, we track document, identity, technical, and recurring fraud.
Document fraud — Tampered or entirely fake documents
Identity fraud — Attempted impersonation or deceit using falsified images
Technical fraud — Using streamed images or video, or fraudulently accessing our verification flow
Recurring fraud — Previously confirmed fraud, and attempting to open multiple accounts for fraudulent purposes
As COVID-19 continues to be a force across the globe we are seeing the effects of the pandemic and what it means for the state of fraud. Global fraud rates increased dramatically from the first 6 months of 2020 to 2021. In 2021 the fraud rates remained more stable from February to May, seeing a large increase from January to February, and a small dip in June. The most startling statistic across the report was that the net fraud rate increased by 14.42% compared to H1 2020.
Each industry responded differently to the current economic and political landscape amid a global pandemic. Below we outline some insights for these three industries about their current fraud landscape, and where the industry could be heading.
As cryptocurrency continues to grow in popularity, it also experienced the highest fraud rate increase over the first half of 2021. The cryptocurrency market continues to see rapidly rising rates of fraud — causing concerns for the industry at large. Cryptocurrency crimes have increased 24,000% from 2016, according to Forbes.
The United States is currently experiencing volatile fraud rates in the cryptocurrency space — noticeably when the price of Bitcoin increased in March, there were notable fraud spikes. Crypto as an industry suffers from a significant amount of recurring fraud, where bad actors return to the same accounts and users after defrauding them successfully in the past.
Amid crypto’s rapidly changing landscape, having identity verification implemented is vital to keeping up with compliance requirements and reducing fraud risks. Veriff’s AML and KYC solution helps fight financial crimes by ensuring customers are who they say they are.
Fintech, especially amid the global pandemic, has become ubiquitous and necessary. Businesses and customers are relying heavily on this technology, which has opened up more opportunities for bad actors to defraud these financial institutions.
Fintech fraud rates have been on the rise in 2021 after seeing a dip in H1 of 2020 — and the fintech sector saw a 99% increase in recurring fraud. However, fintech has seen a significant dip in identity fraud rates in the first half of 2021.
Minimizing account takeover fraud is vital for the fintech space — common authentication methods such as one-time passcodes simply won’t cut it. Veriff has comprehensive solutions, including Face Match which uses biometric authentication and secures accounts easily for businesses and their customers.
Eliminating fraud is imperative, especially for a successful mobility company. Recurring fraud makes up more than half of the fraud in the mobility sector making it by far the most prevalent type of fraud.
Every industry suffers when identity fraud gets out of hand, and the mobility space — which relies heavily on verifying people’s identities and user’s documents — could see difficulties if it doesn’t adapt quickly. Notably, identity fraud experienced the highest year-over-year increase by 19%.
The mobility sector is shifting away from production and moving towards more service-based business models, which means that account security and anti-fraud practices are more important than ever. As this industry rapidly expands due to the global pandemic, adapting security measures quickly will help maintain low rates of fraud.
If you’d like to learn more about the state of fraud and how Veriff can protect your company, download the H1 2021 Fraud Report here.