New account acquisition is an increasingly challenging proposition for financial institutions (FIs) of all sizes. Opportunities for new account fraud are further exacerbated by the growing number of digital-native millennials, or consumers that prefer to conduct commerce in the online and mobile channels. Additionally, Dodd-Frank dramatically changed the economics of retail banking in the United States, while the Consumer Financial Protection Bureau (CFPB) is intensely scrutinizing new account risk assessment practices, pushing FIs toward greater financial inclusion.
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As consumers, we’re using our mobile devices for more payment transactions than ever before. Whether paying with a digital wallet or via an app, it’s becoming more routine to pay for our groceries with a touch of a finger, shop and pay for gifts online, open a new financial account, transfer funds, and pay both our bills and our friends with an ease previous generations couldn’t have imagined.
A recent survey by remotedepositcapture.com revealed that 90 percent of FIs say the benefits of mobile banking far outweigh any risks. This corroborates findings included in the 2013 American Bankers Association Deposit Account Fraud Survey Report that determined 92 percent of FIs attribute no losses whatsoever to remote deposit fraud. However, in that same study, fraud-management executives were asked to identify perceived vulnerabilities and mobile banking topped the list.