Top takeaways from the 2024 Document Fraud Report
Fraud prevention is truly a cat-and-mouse game. And as fraud-fighters, our mandate is to always stay one step ahead.
As we look at the emerging fraud risks of 2024, generative AI and large language models (LLMs) present a large opportunity for fraudsters to create and automate even more damaging attacks on banks and fintechs than ever. As always, the stakes are high: Research shows that the average U.S. fintech loses $51M to fraud annually, and the impact of fraud has a negative ripple effect across the entire company.
Because fraudsters are always evolving their techniques and adopting the latest technologies, the solution needed to stay ahead is deeply technical, requires using the most innovative models, and necessitates ongoing improvements to remain effective instead of once-and-done. Risk teams need technologies that specialize in racing fraudsters to the next vector of fraud detection.
Companies that continue to build large manual risk teams will fail to scale effectively and, even worse, subject themselves to compounding fraud and credit losses. The old world of building large manual review teams is over. Our new world, enabled by machine learning, will allow risk teams to spend their time on what they are best at. The winners will embrace AI to make fast, fair, data-driven approval decisions that will ultimately benefit their customers and their bottom line.
AI and machine learning (especially, deep learning) make it possible for us to uncover trends in how fraudsters are evolving their document manipulation techniques, and we believe that knowledge is power.
We’ve just released our second annual document fraud report to empower banks, lenders, fintechs, and enterprise companies with the top fraud risks revealed by our data — because when fraud-fighting communities come together, we can outsmart fraudsters.
From first-party fraud to fraudulent templates (and fraud advice) that are readily available online, we’ve packaged up the most critical risks we think teams who fight fraud should be aware of in 2024, as well as some best practices for detecting it. Check out a summary of these critical risks below or download the 2024 Document Fraud Report for more data and in-depth advice from industry experts on how to address these risks.
Risk #1: When the economy slows, fraud grows
During tough economic times, fraud attempts increase due to financial hardship — and our data supports this. Nearly 80% of risk leaders at fintechs and financial institutions said they saw a YOY increase in fraud attempts. Surprisingly, only a small portion of these companies have a solution to help them detect fraud in the documents they rely on to make decisions. Download the 2024 Document Fraud Report to see how many.
Risk #2: First-party fraud threatens lenders
First-party fraud has become a hidden fraud loss for many financial institutions. 94% of fraudulent application documents include alterations to non-identity details like bank balances, transaction amounts, and other financial information and 46% of fraudulent application documents don’t include any alterations to identity details — rising since last year. Download the 2024 Document Fraud Report to see first-party fraud rates by industry.
Risk #3: Fraudulent templates (and fraud advice) are rampant
Effortless access to fraud-as-a-service makes it easy to understand how the number of unique document templates detected by Inscribe has increased by nearly 20% since last year. What’s more concerning is the majority of the templates detected in 2022 were proof of address documents, however, in 2023, we saw an alarming shift in document types detected. Download the 2024 Document Fraud Report to see more.
Risk #4: When it comes to fraud, expect the unexpected
Fraudsters have become more effective in recent years because they’re working together — sharing tips, techniques, and information, which is why industry collaboration is so important. Risk teams should assume the same collaborative mindset to fight fraud effectively, learning from each other’s experiences. That’s why we’ve compiled a few top 5 lists in our 2024 Document Fraud Report to inspire you to anticipate new fraud attempts.
At Inscribe, we aim to minimize risk and maximize the efficiency of fraud, credit, and compliance teams by providing document fraud trends, tried-and-true prevention methods, and industry-leading detection technology. We care deeply about the problem of document fraud and are dedicated to helping companies outsmart fraudsters with AI.
Grab your copy of our 2024 Document Fraud Report today, or reach out to speak with a member of our team.
