NICE Actimize launches solution against synthetic and stolen identity fraud

Rick Steves

Increased fraudulent activity in options trading via account takeover and identity theft is pressing the industry to take measures as FINRA stated these crimes may trigger legal or regulatory obligations for firms housing either the victim or profiting accounts.


The leading provider of financial crime, risk, and compliance solutions has announced a new product that allows firms to take a multi-layered end-to-end fraud management approach from account origination to both early and ongoing account monitoring in order to detect and prevent fraud across the customer’s lifecycle.

Working exclusively and seamlessly with NICE’s IFM-X – a platform that supports fraud management solutions for digital, real-time, and open banking channels – the New Account Fraud solution connects an organization’s current identity verification data and tools to bring data and identity risk scores into a new account fraud monitoring system.

The solution utilizes the identity proofing data, risk score, application data, and monitors all payment channels in order to detect complex fraud emanating from stolen and synthetic ID as well as mule activity. The service is also able to reduce new account application friction as well as false-positive application rejections.

Trace Fooshee, Senior Analyst, Fraud and AML Practice at Aite Group, said: “Investments in new account fraud controls have justifiably occupied top priority among fraud executives looking for a more effective means of balancing risk and client experience. Robust application fraud controls that enable organizations to more effectively monitor and quantify risk throughout the entire lifecycle of the relationship empower the organization to more effectively optimize profitability by minimizing risks without sacrificing acquisition and retention objectives.”

Craig Costigan, Chief Executive Officer at NICE Actimize, commented: “Proliferation of sophisticated fraud schemes that utilize stolen and synthetic ID has intensified the need for financial services organizations to adopt frictionless, digital-only new account opening processes. NICE Actimize’s advanced AI-driven New Account Fraud solution supports FSOs by providing a seamless and cost-effective solution that addresses the challenges reflected in the advancement of new fraud scenarios.”

New Account Fraud offers smart customer account onboarding, orchestrates the entire identity proofing process and extends fraud prevention coverage earlier in the customer lifecycle to provide high accuracy account monitoring.

In September 2020, U.S. Financial Industry Regulatory Authority (FINRA) warned of a rise in fraudulent options trading carried either through intrusions into clients’ accounts or phony new accounts via identity theft: “While the risks associated with account takeovers and new account fraud are not new, FINRA has recently observed an increase in the use of fraudulent options trading associated with these schemes.”

Options trading is attractive for such schemes due to the financial leverage inherent to these financial instruments as well as the lower liquidity involved. “Account takeover schemes and new account fraud may trigger legal or regulatory obligations for firms housing either the victim or profiting accounts”, FINRA stated.

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