FinCEN underlines financial sector collaboration to address digital identity threat

Following the release of its Identity Financial Trend Analysis, representatives from the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) offer a deeper look into FinCEN’s digital identity projects, in a keynote and panel presented at the 2024 Identity, Authentication and the Road Ahead cybersecurity policy forum.

Director of FinCEN Andrea Gacki says the world faces challenges related to lack of transparency in digital identity that come in part from opaque corporate structures, and “challenges relating to attributing ownership and activity to real-life people in a digital world.” She says lack of transparency around identity is a global problem that necessitates collaborative action of the sort that FinCEN is engaged in.

Published in January 2024, the organization’s Identity Financial Trend Analysis, parts of which have previously been referred to publicly as the FinCEN Identity Project, provides intelligence on identity processes to financial institutions based on Bank Secrecy Act (BSA) data filed

with FinCEN from January to December 2021. Gacki says it explains “how bad actors are exploiting identity-related processes during account openings, access and transactions to perpetuate crimes.”

“This report reveals the existence of significant identity related exploitations through a large variety of schemes,” she says. Per the report, attackers most frequently use impersonation tactics, followed by compromise during authentication, and circumventing verification to evade detection.

“Attackers impersonate others by providing false identifying information, claiming to be other entities, and otherwise misrepresenting identity information to evade validation,” reads the report. Gacki says opportunities exist for new technologies such as digital identity and biometric identity verification to help address the problem.

A panel of her colleagues agrees. Speaking specifically on FinCEN’s identity work, panelists Kay Turner and Sean Evans agree that, “to get financial services right, we have to get identity right” – an increasingly challenging proposition in a world of remotely delivered services and sophisticated cybercrime that exploits gaps in security infrastructure.

Turner says that, in the Identity Project and the Identity Financial Trend Analysis, FinCEN has attempted to create “a systemic framework to provide feedback to the financial sector on the value of financial intelligence that they are required under the bank secrecy act and FInCEn’s implementing regulations to report.”

Article Topics

biometrics  |  cybersecurity  |  digital identity  |  financial crime  |  financial services  |  FinCEN  |  identity verification