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In digital fraud prevention, there is a fine line between flagging too many transactions as potentially fraudulent and not flagging enough. Too many false negatives means that fraudsters are slipping through the cracks, too many false positives means legitimate users and transactions are being flagged incorrectly, leading to undue friction and lost business. As digital transactions grow, 66% of businesses cite balancing friction with fraud prevention as their number one concern (IDology). Given this, it is no longer enough for authentication solutions to just prevent fraud, they need to demonstrate how they can keep false positives low as well.

Application fraud is a billion dollar problem for financial institutions (FI). It occurs when a fraudster applies for credit, like a credit card or personal loan, with no intention of paying it back. While some fraudsters might use their own information and then drop off the radar, first-party application fraud is a less common technique today. 

It can be a real pain to regain access to banking and shopping accounts on a new device after a smartphone has been lost or stolen. Without a device ID, SIM card or backup codes from an authenticator app to verify identity, it can take several days until the account owner is finally let back into their mobile accounts.