The US reported approximately 1.6 million Bank Secrecy Act (BSA) filings in 2021 related to identity exploitation during account creation, access, and transaction processing, reflecting $212 billion in suspicious activity.
The Financial Crimes Enforcement Network (FinCEN) has released an analysis detailing how malicious actors take advantage of identity-related processes when processing transactions, as well as when opening and accessing accounts.
Notably, 42% of the BSA reports submitted in 2021 pertained to identity issues, with over 14 distinct typologies identified within these reports. The most commonly reported typologies included fraud, false records, identity theft, third-party money laundering, and the circumvention of verification standards. These five categories alone accounted for 88% of identity-related BSA filings and 74% of the total reported suspicious activity connected to identity for the year.
While most financial institutions identified impersonation as the primary form of identity exploitation, money services businesses frequently reported circumvention of verification processes. Additionally, the analysis highlighted that compromised credentials result in a disproportionately higher financial impact compared to other forms of identity exploitation.
FinCEN director Andrea Gacki emphasized, “Robust customer identity processes are foundational to the security of the US financial system, and critical to the effectiveness of financial institutions’ programs to combat money laundering and counter the financing of terrorism.”
For more details, you can access the full analysis here.