On October 31, IBM Security announced a new Trusteer offer to help financial institutions better identify and stop cybercriminals from opening fraudulent accounts by detecting and predict the risk of fraudulent intent.

Financial online fraud and the fuels that feed it have been growing steadily in the past decade, resulting in losses to financial institutions, businesses, and individuals, especially with cases of new account fraud, or NAF.

According to Javelin Strategy & Research, there was $112 billion stolen globally through fraudulent means between 2009 and 2015, equating to $35,600 lost every minute. In 2016, identity fraud hit a record high with 15.4 million victims in the U.S. alone, up 16 percent from 2015. Javelin predicted that NAF will rise as much as 44 percent by 2018 in the U.S., increasing losses from $5 billion to $8 billion in just four years.

Cybercriminals continue to target PII and personal health information because they represent lucrative targets. Matching different sets of PII with their financial information, like payment card data or account credentials, can enable criminals to compromise identities.

The common ways for cybercriminals to obtain personal details are through phishing attacks, information stealing malware, keyloggers, and data breaches from different sources. Kessem pointed out, “But data can be lost or stolen in other ways, due to oversight or physical theft. Even the over-sharing of personal information on social media has become a source of personal and identifying data for fraudsters, as are obtaining credit reports on potential victims, buying background checks, or scouring genealogy sites for extra information.”

The typical uses for the stolen data is basic financial fraud, involving the illicit use of payment card data or bank account details, but also cases of NAF, which have been continually growing and expanding.

After opening a new fraudulent account, fraudsters will typically wait and let the account lay dormant for an average of 30 days before they make a significant withdrawal. The eventual fraudulent transaction is likely to take place within the first 90 days of the account's creation.

Kessem noted an effective detection process should rely on a few factors: user parameter validation, fraud evidence collection, and early account activity monitoring

Some typical actions fraudsters take: depositing small cash amounts to the account, using forged checks to increase the account balance, and making withdrawals soon after funds become available.

“Post-creation monitoring of new accounts during that critical period is important in order to help identify the tell-tale signs of a suspicious account that made it through the enrollment, the possible use of mule accounts, and flagging known fraud patterns that can expose a loss in the making.” Kessem stated.