The Role of a Global Digital Identifier in Financial Inclusion and Fraud Prevention

Posted October 18, 2017

The Role of a Global Digital Identifier in Financial Inclusion and Fraud Prevention

As the mobile channel drives inclusion efforts of financial institutions around the world, a revolutionary new global digital identifier might be the solution to their biggest challenge—fraud.

Called ThreatMetrix ID™, this breakthrough technology allows financial services companies, retailers and others to leverage unique, anonymized customer identifiers to enable seamless and secure digital transactions anywhere in the world.

Unveiled during last month’s Digital Identity Summit in San Francisco, ThreatMetrix ID marries hundreds of user attributes in real time to generate a unique user identifier that revolutionizes digital authentication and fraud prevention, stitching together trusted digital identities that can’t be faked or stolen.

That could make a critical difference to programs aimed at expanding opportunities for the estimated 2 billion worldwide who lack access to digital financial services and the economic benefits that go with them.

As it stands now, fraud rates threaten to derail such efforts and put financially disadvantaged populations down for the count.

Upward, Mobility

Like no other channel, mobile is proving to be mission-critical to financial inclusion efforts worldwide, helping millions open bank accounts, save and manage their money, borrow to start businesses and insure themselves.

In sub-Saharan Africa, for instance, most of the population lacks access to formal banking services. Yet a full 12 percent of adults have a mobile payment account—compared to just 2 percent globally.

During the past few years, mobile payments have helped small farms sell goods to local markets and have fueled micro-lending programs, which has led to a small business boom. According to a recent global survey measuring progress toward financial access, five of the 10 highest scoring developing economies hail from this region.

But others are gaining ground. From China to Latin America to eastern Europe and beyond, mobile is leveling the playing field for a growing number of people. The problem is that fraudsters have taken notice—and are finding big profits by preying on the world’s poor.

Merchants of Misery

As if aiming to snuff out progress in the battle against poverty, cybercrime rates are at an all-time high.

From April through June, 144 million cyberattacks were detected within the ThreatMetrix Digital Identity Network™—a 100-percent increase in just one year. A disproportionate amount of the damage has hit some of the world’s most impoverished populations just as they take steps to join the digital age.

One example is India, where 5 million new Internet users venture online each month. This nation, where most are poor and less than half possess bank accounts, has emerged as the second-largest smartphone market in the world. Mobile and online payments there have surged 250 percent in less than 10 months.

While promising on the surface, this explosive growth brings with it some not-so-hidden landmines. Phishing attacks have surged 500 percent. And one-in-10 digital transactions is rejected due to suspected fraud, with IP spoofing figuring prominently.

India’s hardly alone. Cyberattacks are soaring in countries throughout Central and South America, as well as in the Middle East and in Eastern Europe. Tough economic conditions and the naivety of freshly-minted netizens make breeding grounds for cybercriminals.

Today, cybercriminals can easily access stolen identity credentials on the dark web, and use them to take out fraudulent loans, hijack user accounts, make illegal purchases and more, contributing to global damages expected top $6 trillion by 2021.

ThreatMetrix ID is designed to end to all that.

A Global Game-Changer

Put simply, ThreatMetrix ID solves the complex challenges of verifying customer identity.

By cross-referencing device, location and identity data with crowdsourced, digital identity intelligence from 75 million daily mobile- and web-based transactions worldwide, ThreatMetrix ID verifies the identities of the 1.4 billion users within the ThreatMetrix Digital Identity Network with nearly 100-percent accuracy.

Trusted users are instantly recognized, enabling fast, friction-free digital experiences. Fraudsters are blocked, even if they’re employing valid user credentials. And since these digital IDs are fully anonymized, organizations can protect user privacy and easily navigate country-specific privacy laws and regulations.

The impact of all this could be monumental. Disadvantaged populations could gain new ways to securely store money, save for emergencies, start or expand businesses, insure their families and forge a better tomorrow as active participants in the $3.4 trillion digital economy.

Sounds too good to be true? Let’s hope not. After all, according to estimates from McKinsey, successful financial inclusion efforts could increase the GDP of the world’s developing economies by as much as 6 percent to $3.7 trillion by 2025.

New open markets with reduced fraud and poverty. Sounds like a win-win for everyone.

To learn more about how ThreatMetrix ID can boost global fraud prevention through the power of smart authentication, click here.

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