Collaboration essential in fight against global fraud, report finds

Shared fraud intelligence and digital identity tools help organisations boost detection and protect consumer trust

Collaboration essential in fight against global fraud, report finds

Banks and online retailers can significantly improve their ability to detect high-risk fraudulent transactions by incorporating shared fraud intelligence into their risk assessments, according to a new report.

The Global State of Fraud Report from LexisNexis Risk Solutions highlights the benefits of collaborative digital identity intelligence, which can help organisations build stronger digital trust and prevent fraud before it occurs.

Examples cited include one organisation that achieved a 94% customer recognition rate and another that increased its fraud detection by 26% by integrating digital identity and email intelligence.

According to data from the LexisNexis Digital Identity Network platform, fraud attacks rose 19% globally year-on-year. The LexisNexis report underscores the growing sophistication of fraudsters, including their use of AI to automate phishing and deepfakes, which has made scams more convincing and efficient, eroding consumer trust in digital services.

Shared fraud intelligence networks enable businesses to flag suspicious activity and confirmed fraud cases to other network members, improving the industry’s collective defences. These networks can analyse digital signals such as device data, IP addresses, and email addresses. One global bank boosted its fraud detection capabilities 17-fold by leveraging collaborative data, while a card issuer saw a 23-fold improvement in risk assessments.

Despite these successes, the report found that only 60% of organisations have technological fraud prevention solutions across all transaction channels. In the EMEA and APAC regions, just 27% of firms use data-sharing initiatives or consortium models to combat fraud, even as 72% of businesses identify integrating digital experience with fraud prevention as a high priority. 

“Consumers’ desire for faster, instant service is driving demand for change, including the creation of alternative payment solutions. In response, regulators and central banks are enabling systems, such as instant payment rails, which make transactions easier,” said Stephen Topliss (pictured above), vice president of fraud and identity at LexisNexis Risk Solutions.

“However, every attempt to make transactions easier for consumers is also making life easier for fraudsters. Societal demand for convenience has left financial institutions facing a difficult balancing act to deliver technological innovation and convenience, while maintaining trust and system integrity.”

The report also examines the rise of synthetic identities — fake profiles created for fraudulent purposes — which are seven times more likely to lack first-degree relatives and 20 times more likely to appear in multiple credit applications in a short time frame. Insights from broader intelligence networks can help identify these profiles.

Another challenge comes from the role of human money mules, who aid in laundering between 2% and 5% of global GDP each year. Approximately 40% of these individuals are under the age of 25. 

“The worst-case scenario is that consumers cease engaging digitally because they don’t trust the process,” Topliss said. “Tackling this global issue requires a multi-layered approach, as there is no silver bullet anti-fraud solution.”

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