Alternative finance is on the rise. The number of alternative lenders is rapidly growing, along with the number of new loan origination requests from consumers looking for easy access to small business funds. In fact, Morgan Stanley projects global P2P lending to reach $290 billion by 2020, with an expected compound annual growth rate of 51 per cent.
These online lenders use dynamic data in their screening process to try and automate their underwriting process as much as possible, providing a loan offer bespoke to each consumer or business instantly. However, the continued buzz surrounding online and P2P lending makes it a top target for cybercriminals using stolen identities to create loan applications with synthetic credentials.
The SEC recently stated cybersecurity is the biggest risk to the financial system. For online and P2P lending in particular, the risk is greater as they make their decisions on data without the luxury of sitting across from the loan requester. Compromised identities resulting from recent massive data breaches and malware are exploited by global cybercriminals using cloaking technologies such as proxies and spoofed locations to mask their true identities and whereabouts. These stolen identities and criminally-synthesised false identities drive an increase in fraudulent loan applications. For the full article click here
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