Finance & Banking , Fraud Management & Cybercrime , Fraud Risk Management

Moving First-Party Fraud Out of the Bank's Blind Spot

Fraud Expert Ian Mitchell on Creating a Holistic Program to Tackle Authorized Fraud
Ian Mitchell, co-founder, Mission Omega, and founder, The Knoble

Unlike identity theft, first-party fraud is harder to spot when a consumer opens an account. To guard against this growing blind spot, banks need to invest in transaction-monitoring tools and take a more holistic approach to fraud, said Ian Mitchell, co-founder of Mission Omega and founder of The Knoble.

See Also: Measuring Your Data’s Risk

"There needs to be controls upfront - looking for first-party fraud, but at the same time, it needs to be through the life cycle of the account," Mitchell said, adding that few banks of any size have adopted this approach.

Once the account is open, first-party fraudsters will typically apply for loans and misrepresent the facts - in a pattern of abuse. "So, fraudsters are coming in and opening accounts, and that pattern of abuse starts manifesting," Mitchell said. "It starts showing itself while the customer, being the fraudster, has established themselves as a good customer. And so for that reason, transaction monitoring is really important."

In this video interview with Information Security Media Group, Mitchell discussed:

  • The cross-industry gap in addressing first-party fraud;
  • The role credit repair companies play in facilitating synthetic identities and fraud;
  • Regulatory expectations and how the industry is responding to them.

Mitchell, who leads fraud prevention at Omega FinCrime, also founded The Knoble, a nonprofit global network of experts with a passion for fighting human crime. He also serves as a financial crimes advisory board member at the American Bankers Association. Mitchell previously led PwC's Financial Crimes Unit and fraud management practice.

About the Author

Suparna Goswami

Suparna Goswami

Associate Editor, ISMG

Goswami has more than 10 years of experience in the field of journalism. She has covered a variety of beats including global macro economy, fintech, startups and other business trends. Before joining ISMG, she contributed for Forbes Asia, where she wrote about the Indian startup ecosystem. She has also worked with UK-based International Finance Magazine and leading Indian newspapers, such as DNA and Times of India.

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