Visa recently sounded the alarm: application fraud has doubled across digital banking and fintech platforms since 2019. The culprits? Synthetic identities and bad actors exploiting streamlined onboarding flows.
To stay ahead, Visa urges companies to adopt multi-layered fraud defenses and stronger identity verification tools.
They're right, but there’s a gap in most fraud strategies that’s too often overlooked:
the businesses behind the applications.
Fraud isn’t just a consumer identity problem
In the race to onboard more users, most fintechs and lenders have poured resources into KYC. But when it comes to verifying the business entity — the LLC, the sole prop, the applicant’s so-called “employer” — due diligence is often inconsistent, manual, or missing entirely.
And that’s exactly where fraud slips in.
Some common vectors:
- Recently formed entities used as shells for credit abuse
- Sole proprietors masking stolen personal identities
- Dealer-submitted applications with mismatched or outdated business info
- Lookalike businesses piggybacking off legitimate brands
When you’re only verifying the person pressing “submit,” you’re trusting the rest of the application without proof.
Faster onboarding doesn’t have to mean blind trust
Digital onboarding has come a long way, but faster flows shouldn’t mean skipping critical verification steps. If you want to scale without increasing your fraud exposure, you need visibility into both the individual and the business.
A few key layers to add:
- Real-time KYB checks that validate entity status and legitimacy
- UCC filing data to confirm existing liens and financing relationships
- Ongoing monitoring to catch changes in ownership, business standing, or risk flags post-onboarding
The path to trust starts with business identity
Visa’s warning is clear: fraud tactics are evolving, and your defenses need to evolve too. That starts by expanding your definition of identity.
The strongest risk strategies verify:
- The person, to confirm who’s applying
- The business, to confirm it exists, is legitimate, and belongs to the applicant
- The connection, to ensure the person and business are tied together in a meaningful, verifiable way
Fintechs that take business identity seriously will move faster, approve more of the right customers, and keep bad actors out — without adding friction to the process.
Is your KYB process keeping up with today’s fraud risks?
Let’s talk. We’ll help you assess your current approach and build a KYB layer that scales with you.
