Fraud now accounts for 43% of all reported crime in the United Kingdom, highlighting the urgent need for more proactive fraud prevention. As firms streamline digital onboarding for speed and convenience, they also introduce new vulnerabilities.

This calls for a deeper view into the relationships and identities behind onboarding data. Social profiling can reveal patterns and connections that traditional verification methods miss,  flagging risks earlier in the process. 

Digital Onboarding Risks and Blind Spots

Digital onboarding has revolutionised customer and business acquisition, enabling faster access to services and reducing onboarding friction. However, this convenience comes with new vulnerabilities. As more interactions shift online, fraudsters are exploiting weaknesses in digital verification processes, particularly those reliant on static identity checks or document uploads.

The absence of in-person verification, combined with the widespread availability of stolen personal and business data, creates ideal conditions for identity theft and synthetic identity fraud. Fraudulent actors often target onboarding processes with limited background checks or outdated risk signals. These blind spots are especially dangerous in Know Your Business (KYB) scenarios, where shell companies and false ownership structures can pass through compliance undetected.

To defend against evolving fraud schemes, financial institutions must identify these blind spots and deploy technologies that monitor context, behaviour, and relationships, not just identity documents.

How identity fraud exploits onboarding

Cyberattacks and large-scale data breaches expose sensitive information, including  names, addresses, national ID numbers, e-mail credentials, and bank account details,  much of which is later sold on the dark web.

This compromised data fuels a range of fraud schemes. Criminals use it to impersonate individuals, open fraudulent accounts, or create shell companies that can slip through onboarding controls, bypassing traditional identity proofing and verification methods. 

One tactic has become especially widespread: synthetic identity fraud. By combining stolen identification information, such as government-issued numbers, with fabricated details, fraudsters can create entirely new identities that appear legitimate and bypass KYC controls. Alarmingly, an estimated 95% of these synthetic identities go undetected during the onboarding process at financial institutions.

The same approach is also applied to businesses. Fraudsters pair real data, like valid registration numbers, with falsified ownership or financial information to create fabricated entities. These businesses can gain access to financial services or secure lines of credit under false pretences. 

For financial institutions, onboarding these entities can lead to serious consequences: financial losses, regulatory scrutiny, and long-term reputational harm.

How modern tools scale identity fraud

Fraud-as-a-service platforms have made identity schemes faster and easier to execute. Tools like FraudGPT and OnlyFake let fraudsters outsource forgery, generating deepfakes, fake IDs, and falsified financial records at scale. Voice cloning and image manipulation enable bad actors to impersonate individuals during biometric or video-based verification. As a result, sophisticated fraud is now accessible even to low-skilled actors. 

Regulators have noted this shift. The United States’ Financial Crimes Enforcement Network (FinCEN) recently highlighted a rise in suspicious activity reports linked to deepfake media, particularly falsified documents designed to bypass standard verification and authentication processes. Generative AI now allows mass production of fake identities, straining traditional onboarding controls.

Uncovering Risk in Onboarding through Social Profiling Techniques

Traditional verification methods struggle to keep up with the sophistication of today’s fraud tactics. That’s why many institutions are adopting social profiling, a technique that goes beyond identity verification to uncover behavioral patterns, network connections, and risk indicators during the onboarding process.

By analysing shared data points across multiple applicants and applications, firms can detect signs of collusion or recycled identity data. Social profiling uses relationship mapping to uncover previously hidden links between individuals, entities, or addresses associated with past fraud attempts or high-risk activity.

Integrating these methods into onboarding workflows allows teams to assess a wider range of contextual data, enhancing fraud detection and reducing false positives. It also helps uncover concealed ultimate beneficial owners (UBOs), flag dormant shell entities, and detect patterns that evade static screening processes.

Linking data points to reveal hidden connections

To keep pace with evolving tactics, firms are turning to social profiling techniques, using relationship and context-based cues to uncover risks that traditional methods often miss. These approaches can reveal behavioural flags and suspicious connections during onboarding.

One layer involves linking repeated or slightly varied data points, including names, e-mails, phone numbers, or IP addresses, that may be reused by the same actor. Repeated use of the same mailing address or contact details, for instance, may indicate linked fraudulent activity.

Network-level screening goes further, mapping connections across applications and exposing links to known fraud patterns, including shared data attributes or associations and ties to high-risk jurisdictions. Some links may even trace to entities flagged in past investigations or listed on internal or external watchlists.

Open-source intelligence to uncover hidden connections

Publicly available data, including corporate registries, sanctions lists, or adverse media add another layer of context during onboarding. This includes unstructured data that can help corroborate identity claims or reveal inconsistencies.

For example, an executive listed on a business application might be linked to a sanctions-listed individual through a shared contact details, alias, or prior directorship. A social media profile might reflect a lifestyle that conflicts with declared income or business activity. In some cases, the absence of a digital footprint can be a red flag.

These contextual and relationship-based signals can expose fake businesses, recycled director identities, or concealed ultimate beneficial owners (UBOs). Detecting these connections early helps financial institutions flag suspicious networks that would otherwise pass through standard checks.

Digital Onboarding Tools that Use Social Profiling

To combat identity fraud and financial crime, digital onboarding solutions are evolving into intelligent, risk-sensitive platforms. These systems now incorporate social profiling capabilities to assess applicants dynamically and in real time.

By aggregating data from multiple sources, including government registries, sanctions lists, adverse media, and corporate filings, modern onboarding platforms build a more complete and contextual risk profile. Unlike legacy systems, which rely on periodic reviews or manual lookups, these tools generate continuous insights to flag suspicious changes in ownership, location, or business activity.

Platforms that embed social profiling into their onboarding flow can trigger early warnings when key risk indicators arise, such as shared IP addresses, known fraud rings, or sudden spikes in account registrations from a single location. These insights not only strengthen fraud prevention but also enable financial institutions to meet growing regulatory expectations for risk-based due diligence and ongoing monitoring.

Perpetual KYC powered by real-time intelligence

Advanced KYC and KYB tools have evolved into continuous processes, integrating elements of social profiling and moving beyond static, periodic reviews. By drawing on real-time data from corporate registries, sanctions lists, commercial databases, and media sources, firms can detect shifts in risk profiles as they happen.

This is especially important as fraudsters often pass onboarding, then lie dormant before triggering any red flags. Perpetual KYC surfaces these risks earlier. If a UBO, for example, becomes newly associated with a high-risk jurisdiction, real-time alerts can prompt immediate follow-up, without waiting for the next scheduled review.

Intelligent onboarding through risk-based workflow design

Financial institutions are adopting risk-based workflows to focus due diligence where it matters most, helping reduce review times for low-risk cases while strengthening controls around higher-risk profiles. Social profiling adds valuable context, helping teams prioritise actions based on the nature and severity of identity signals.

Low-risk applicants can be approved automatically using rule-based controls, while higher-risk cases are escalated for enhanced due diligence. This ensures that resources are concentrated where they’re most needed.

By aligning workflow logic with real-time risk signals, firms can reduce manual review pressure and streamline the applicant experience.

Future-Proofing Onboarding with Social Profiling

As fraud tactics evolve, static onboarding checks fall short. Social profiling, which uncovers hidden risks through contextual signals and network analysis, is becoming essential for detecting threats that traditional verification methods miss.

Fraud often precedes serious offenses like money laundering or sanctions evasion, carrying both financial and regulatory consequences. That makes early detection during onboarding a critical defense.

Facctum’s KYB platform supports this shift toward more dynamic, intelligence-driven onboarding. Its system automates business verification and risk profiling, helping firms reduce manual reviews, improve compliance, and accelerate onboarding.

By consolidating real-time data from government sources, corporate registries, and commercial databases like Companies House, Facctum enables firms to maintain current, audit-ready profiles, without excessive customer outreach. Event-driven alerts allow teams to respond to emerging risks as they arise. With flexible workflows and scalable architecture, onboarding can now be aligned with real-time risk.

Ready to strengthen your KYB controls and stay ahead of fraud? Contact Facctum.