EXCLUSIVE—The growth of synthetic fraud, or the method by which fraudsters use a combination of real and false details to open malicious accounts, is slowing as lenders, issuers, and consumers all grow more attentive to cybersecurity methods, a study conducted by credit bureau TransUnion found.

The study, released earlier this week, notes that the percentage increase of synthetic fraud — which has been steadily on the rise for the past half decade, Lee Cookman, director of product strategy for TransUnion, told Bank Innovation — only rose 5.2% between the fourth quarter of 2016 and the fourth quarter of 2017. This is compared to the 68.5% jump between Q415 and Q415, the study said.

There’s “a number of things” that could have had an effect on this diminishing rate of synthetic fraud, Cookman told Bank Innovation.

“On the card issuer or the lender side, we’ve had a number of fruitful conversations [on fraud]. There’s been a lot of focus on taking a look at the behaviors that are leading to malicious activity,” Cookman said.

The ability to hone in on these behaviors is conducted more and more through technologies like machine learning and advanced data analytics, according to Cookman, who noted that this lead to a “greater confidence” in the legitimacy of those consumers who are transacting on these digital networks.

Fraud prevention has always been a key area for businesses, but the advent of mobile and digital transacting led to a rush because, as Cookman put it, “you can’t slow down the customer experience just to stop fraud.”

“There’s a digital and mobile transformation happening with all lenders,” Cookman added. “You have to offer digital, faceless transactions on the go—how can you ensure you’re complying with [fraud standards]? You have to be sure you’re making use of solutions to mitigate that fraud risk.”

As TransUnion’s study on the matter found, lenders finally seem to utilizing such measures with effect. This is partly due to the fact that digital businesses now have a set of standards that can allow them to easily categorize what synthetic fraud is, Cookman said.

“It [was difficult] trying to categorize synthetic fraud from other methods of fraud—lenders needed to take some time to reference it, to say, ‘Ok, let’s all agree, let’s get some standardized definitions,” Cookman said.

In addition to the more proactive methods taken by lenders (synthetic fraud being particularly prevalent in the consumer and personal loan space), consumers have also responded to the growing rate of fraud by being a bit more responsive, or at least a bit more cautious, when it comes to their online identities.

“I would agree that consumers are more worried about security [than previous years],” Cookman said, when asked, though, as he added, that doesn’t correlate to as large a shift on consumer behavior as one might have hoped. “Yes, consumers are more aware — but as the data says, most consumers don’t change their passwords often. As much as they say they’re concerned, they want the convenience.”

This could be because, despite rising concerns, consumers still tend to view fraud prevention as more of the institution’s problem than anything to do with their own behavior.

“That’s become an expectation,” Cookman said. “If you rewind 20 years ago, if fraud happened, I knew I had to move quickly. With most credit card issuers now, consumers know we have zero liability.”

It is also worth noting that this study specifically measures the growth rate of synthetic fraud—other methods of fraud are not experiencing the same slowdown, Cookman said.

Take a look at TransUnion’s findings here.