What is Account Takeover (ATO) and how does it happen?

Account Takeover (ATO) is a prevalent and dangerous form of digital fraud. In these attacks, criminals use stolen credentials to seize control of users’ bank, credit, email, or social media accounts.

The pattern is usually the same. An attacker obtains a username and password through phishing, social engineering, or a data breach, logs into the account, changes security settings, and then uses the compromised account to commit further fraud.

ATO attacks affect almost every industry that handles sensitive personal data, but the financial sector is among the hardest hit. Not because banks are neglecting security, but because attack techniques are evolving faster than traditional security models can keep up. Understanding why ATO poses unique dangers for banks is crucial to addressing this challenge.

Why is ATO especially dangerous for banks

In digital banking, ATO is not “just another fraud case.” It is a compound risk that combines direct financial losses, erosion of customer trust, regulatory exposure (NIS2, DORA), and long-term reputational damage.

According to data from the European Central Bank (ECB) and the European Banking Authority (EBA), payment fraud losses in the EU/EEA reached approximately €4.2 billion in 2024, a 17% year-over-year increase. Almost all credit transfer fraud and the vast majority of card fraud occur through remote channels – mobile and online banking – which rely entirely on digital authentication.

The role of SCA – and why it is not enough

PSD2 introduced Strong Customer Authentication (SCA) and successfully reduced certain types of fraud. However, attackers adapted quickly. Instead of targeting individual transactions, they shifted their focus to taking over entire accounts.

Today, ATO typically involves:

• credential theft
• changes to security settings
• bypassing MFA
• abuse of account recovery processes

Once attackers gain control of an account, they often have nearly the same level of access as the legitimate user – at which point traditional controls frequently fail. This is why examining the limitations of built-in mobile biometrics is the next important step.

Where built-in mobile biometrics fall short

To simplify login and improve user experience, many banks rely on built-in mobile biometrics such as Face ID or Android facial recognition. From a UX perspective, this makes sense – but from a security standpoint, it is not sufficient.

The core issues are that built-in biometrics are:

• designed to unlock devices, not protect financial transactions
• based on models that tolerate a certain level of fraud
• not linked to a verified user identity

Device biometrics only confirm that the person present matches what the device has previously stored. If an attacker takes over the device or replaces the biometric data, the bank has no insight into that change. Therefore, banks must consider how to prevent ATO attacks beyond device-based solutions.

How ATO is actually prevented in practice

Effective ATO prevention starts with reliable identity verification. This is where Identyum goes further, offering practical solutions that address the limitations discussed above.

Identyum combines:

• identity verification (ID document + KYC)
• biometric authentication
• continuous authentication across the entire customer journey

As a result, biometric resets or account takeovers cannot occur solely through device compromise. Every high-risk action remains tied to a verified user identity.

The Identyum ID Wallet, where users’ personal data is stored, is protected by ISO/IEC 30107-3 Level 1 and Level 2 biometric authentication, with proven resistance to spoofing. The system detects fake video feeds and reliably distinguishes real user presence from impersonation.

Protection does not stop after onboarding. It continues:

• at login
• during profile and security changes
• throughout account recovery flows

Why banks need real biometric security

ATO attacks are not caused by a lack of authentication, but by authentication that is not designed for today’s threat landscape and regulatory expectations. As digital fraud grows, AI-driven attacks accelerate, and regulatory scrutiny increases, banks need biometrics that are:

• identity-bound
• measurable and independently tested
• designed for financial risk

Identyum does not add another security step. Instead, it eliminates the risk of ATO in digital banking, providing a modern answer to persistent security challenges.

If you would like to learn more about account takeover risks and how Identyum can help protect your digital channels, contact our sales team at [email protected].