In 2021, the United States witnessed approximately 1.6 million Bank Secrecy Act (BSA) reports, amounting to $212 billion in suspicious activity, all linked to the exploitation of identity processes during various financial transactions.
The Financial Crimes Enforcement Network (FinCEN) has conducted an analysis shedding light on how malicious actors exploit identity-related processes in transaction processing, account creation, and access.
The data reveals that 42% of the BSA reports filed in 2021 were centered around identity-related issues. Within this category, more than 14 typologies commonly emerged in identity-related BSA reports. The prevalent typologies included fraud, false records, identity theft, third-party money laundering, and circumvention of verification standards. Astonishingly, these top five typologies constituted 88% of identity-related BSA reports and contributed to 74% of the total suspicious activity amount reported throughout the calendar year 2021.
Among financial institutions reporting in the identity-related BSA dataset, impersonation emerged as the most commonly reported form of identity exploitation. Conversely, money services businesses frequently reported circumvention of verification. The report also highlighted the disproportionate financial impact of compromised credentials compared to other forms of identity exploitation.
Andrea Gacki, the Director of FinCEN, emphasized the significance of robust customer identity processes as foundational to the security of the US financial system. She highlighted that such processes are critical for the effectiveness of financial institutions' programs in combating money laundering and countering the financing of terrorism.