Balancing fraud prevention with customer experience20 February 2017
As seen in February's edition of CCR - page 32
By Melanie Cameron, Senior Technical Sales Manager, Callcredit Information Group
As fraudsters become ever more sophisticated in their attempts to obtain finance from lenders, it is becoming more and more difficult for organisations to identify potential fraud early in the application process whilst still providing a smooth customer journey.
Internal fraud teams tread a fine line within their organisations, often trying to highlight the highest risk applications whilst not being seen as the “sales prevention” team. The process is further complicated for many motor finance providers by their remote relationship with the customer and the dealer interaction with them. This in itself can pose the additional threat of dealer fraud or incomplete and incorrect applications being submitted.
The latest technology in fraud prevention provides many effective methods of approaching these challenges. By using sophisticated techniques such as document verification, biometric assessment and device recognition, the process can be made more customer friendly. The challenge for many motor finance providers is how does a fraud team utilise all of these additional data sources without significantly increasing the number of referred applications they are processing?
The key for lenders to maintaining a seamless customer journey must lie in the ability to develop a layered fraud prevention strategy. Here, the lowest risk applications are identified quickly and accepted with minimal checks performed, and the higher risk applications are processed through an additional range of fraud checks which can highlight anomalies or inconsistencies.
To give an example of such a process, a motor finance provider could choose to use the information provided as standard at point of application to carry out the first layer of assessment by performing an automated identity check and carrying out various checks on the driving license provided to verify its authenticity. This document verification process could include facial recognition, which takes a real time video or selfie of the applicants face to compare to the document. Although this type of check is typically used in an online relationship with the customer, it could also assist motor finance providers in ensuring that they are seeing the true applicant’s identity documents and not those manufactured or adjusted in some way by a fraudulent dealer.
Once this initial layer of identity and fraud prevention checks has been performed, the lender should have sufficient information to identify those lowest risk customers and pass them through the application process with minimal manual intervention required. If anomalies are found at this stage, then further checks can be carried out to verify they are who they say they are through solutions such as knowledge based authentication questioning or verification of the fraud risk relating to the device, bank, card, phone number or email details provided.
As fraud increases on a global scale, it is clear that finance providers must keep one step ahead of the game when identifying fraudulent applications. A layered strategy will help to ensure that the fraud is prevented before it becomes a significant cost to the business and that genuine customers have a great experience and are approved quickly.