Every Consumer Faces Unique Identity Risks: Why It Matters to Credit Unions — and How They Can Help
While the number of data breaches has long been considered by financial and cybersecurity observers in monitoring data compromise and identity crime trends, a better indicator is emerging: breach severity.
The severity of a data breach is primarily determined by the type of personally identifiable information (PII) exposed. While the number of records stolen often gains media attention, a breach’s severity score is based on what type of records and data were stolen since that determines the crimes and abuse that can be executed. Stolen Social Security numbers have a greater potential for abuse than an exposed address, for instance.
Severity risk scores are therefore highly dynamic from breach to breach.
Breach severity is the highest it’s been in two years
As a global information and insights company — and one of the few organizations assessing data breach severity — TransUnion recently observed a significant increase. According to its analysis shared at the 2024 FinovateSpring conference, during the first quarter of 2024, data breach severity rose to its highest level in two years, up 31% from the same period last year.
TransUnion’s research showed this increase was primarily due to a high level of Social Security number exposures — which occurred in 78% of all publicly reported breaches during Q1 2024. That’s a significant rise from the same period in 2023 when Social Security numbers were exposed in 51% of breaches.
Coupled with the high number of credit and debit card data exposures so far in 2024, the risks to financial consumers continue to reach record levels.
Members benefit from personalized intelligence
Just as every breach is unique, so too is the potential impact to every victim. The personalized risk faced by each individual victim is complicated by their personal breach history. Similarly, the action plan for mitigating their distinct risks is highly dependent on which pieces of PII are in the hands of identity criminals.
Credit unions sharing hyper-personalized identity risk intelligence at the account level essentially deputize members to join them in the ongoing battle against identity crime. Engaging in the fraud fight becomes even more compelling when risk intelligences are seamlessly integrated into familiar digital banking channels.
Personalized identity risk intelligence can help credit union members understand actions that are most effective at keeping identity thieves at bay. While there are many things a data breach victim can do, not all are appropriate for their unique threat profile. For example, a credit freeze has little effect if the victim is at risk of tax return fraud. In fact, the sheer number of tasks a person could undertake is often so overwhelming it causes inaction.
Consumer failure to act following breach notifications impacts associated financial institutions —which generally bear the brunt of identity crime-related losses. The reality is people want to take action, but they often need and seek guidance about what to do from a reliable source. Hyper-personalized identity risk intelligence — delivered to them by their trusted credit unions — can empower members with a proven, effective and customized action plan.
Adding interactive educational components can also encourage greater member engagement with a credit union’s digital platform. Just as credit simulators can influence consumer decisions and behavior, providing a dynamic identity risk score — one that improves as the member takes protective action — can generate better security habits. Also, the positive reinforcement from watching their scores improve can motivate members to log in to their digital banking apps more frequently.
Identity risk intelligence strengthens personal breach responses
Personalized risk intelligence could help 20 million people every quarter: That’s the estimated number of victims whose driver’s license numbers, credit card information and Social Security numbers are exposed in data breaches.
Building upon the industry’s tradition of credit intelligence and empowerment, this next generation of consumer enablement is poised to strengthen the US financial system even further. By expanding access to more tools and strategies, millions of credit union members and their families can gain greater control over their financial destinies.
Identity safety is a critical component to safeguarding the financial futures of consumers. Yet, understanding and effectively countering identity threats requires a level of personalization that — until now — they’ve been unable to access.
Today’s credit unions can provide the clear insights and guidance members need to ensure the safety of their identities, thereby deepening their relationships with cooperatives.
About Author:
Jim Van Dyke is Senior Principal of Innovation for TransUnion’s Consumer Interactive business. He can be reached at Jim.VanDyke@transunion.com.