Identity Orchestration: Reducing Fraud in Financial Institutions

May 11, 2023    |    5 minute read

Identity Orchestration: Reducing Fraud in Financial Institutions

May 11, 2023    |    5 minute read

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Financial institutions face a myriad of risks when it comes to the threat of fraud. The impact of fraud can be significant, ranging from loss of revenue and reputational damage to legal penalties and regulatory fines. Cyber criminals use sophisticated tactics to infiltrate financial institutions and steal sensitive information, and these attacks not only target customers but also employees, who may unwittingly fall prey to phishing scams or social engineering ploys. Additionally, insider fraud can pose a significant risk, as employees with access to critical systems and data may exploit their positions for personal gain. With this in mind, financial institutions must continuously monitor and strengthen their security measures to safeguard their systems, data, and customers from the looming threat of fraud. 

This is where the integration of biometric authentication with identity orchestration comes in; an excellent solution to tackle the challenge of securing access control and reducing the risk of fraudulent activities. Biometric authentication is a process that uses unique physiological characteristics such as facial recognition, voice recognition, iris scans, fingerprints, or even behavioral biometrics like typing patterns, to verify a person’s identity. Meanwhile, identity orchestration is an essential tool used to seamlessly manage and control access to applications, systems, and data across multiple platforms efficiently, in tandem with Identity and Access Management (IAM) systems. 

 What does it all mean? Well, combining biometric authentication with identity orchestration provides banks and financial institutions with an added advantage against fraud.  

To better understand the benefits of this integration, read on: 

  1. This combination enhances the security level of access control systems. It reduces the reliance on static credentials like passwords or PINs, which can be stolen or hacked. With biometric authentication, users are verified by their unique physical traits (or behavioral biometrics), increasing the difficulty of unauthorized access by others. This reduces the risk of fraudulent activities such as account takeovers or identity theft, which can result in substantial financial losses for both banks and customers.
  2. These two robust processes offer a more convenient login process for customers, providing a better user experience as well. With biometrics, users no longer need to remember passwords or PINs, which can reduce user frustration and improve satisfaction levels – no more password fatigue. According to Visa, “biometric authentication is considered safer and more convenient than traditional passwords by 46% of people, while 70% see it as easier to use.” This saves time and effort while also providing better security measures, ultimately driving customer loyalty and retention.
  3. Integrating behavioral analytics into identity orchestration allows banks to detect fraudulent activities in real-time. By using machine learning and AI-powered algorithms, behavioral biometrics can help banks detect unusual behavior in user interactions across multiple applications and systems. It flags suspicious activities, such as using different devices, unusual clicks, or location changes that would typically not belong to the user’s behavioral pattern. This information allows banks to prevent fraudulent activity quickly, thereby greatly reducing the risk of reputational and financial damage or identity fraud. 
  4. Identity orchestration and biometric authentication also facilitate employee access management. According to the Federal Deposit Insurance Corporation (FDIC), “nearly half of all bank fraud and embezzlement cases are committed by insiders.” Identity orchestration ensures that employees are authenticated, verified, and authorized to access sensitive data and systems, according to their job descriptions. This reduces the risk of insider threats and misuse of privileges, thereby securing the financial institutions’ data and assets.
  5. The marriage of these two tools also enhances regulatory compliance for financial institutions. By following Know Your Customer (KYC) or Know Your Business (KYB), and Anti-Money Laundering (AML) compliance, financial institutions can reduce the risk of exposure to legal and regulatory fines. Identity orchestration ensures that customer data is accurate and up to date across all systems, reducing the risk of inconsistencies and errors, and therefore meeting regulatory standards.

If you’re looking for an integration that works for you and your business, Aware offers a suite of trusted authentication products for biometric adoption strategies. 

  • AwareID: A software-as-a-service subscription platform that offers lightning-fast identity verification, multi-factor authentication and biometrics in a single, low-code platform. 
  • Knomi: A mobile biometric authentication framework that combines the power of face and speaker recognition to provide a strong, secure and frictionless, passwordless authentication solution for a wide variety of applicable use cases. 
  • BioSP: A modular, open middleware platform that provides biometric systems with advanced biometric data processing and management functionality in a web services architecture. 
  • AwareABIS: A family of automated biometric identification systems (ABIS) that offer a wide array of biometric identification solutions for any sized civil or law enforcement community. 

The unbeatable combination of biometric authentication with the integration of identity orchestration is an effective cybersecurity solution from which financial institutions can benefit. The solution enhances security measures, provides a seamless user experience, promotes regulatory compliance, detects fraudulent activities in real-time, and facilitates employee access management. By adopting these measures, financial institutions can be well positioned against fraud attempts, reduce the risk of exposure to legal and regulatory fines, and gain customer trust and loyalty. 

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