The digitalisation of the financial services sector makes it easier for fraudsters to access mortgages, personal loans, current accounts and retail loans. The Experian 2018 UK&I Fraud Report points to a whopping 32% rise in personal loan fraud, whilst current account fraud still accounts for 60% of all fraud. In the insurance sector, identity fraud skyrocketed a shocking 10250% between January and June 2017 compared to the same period in 2016.
Yet despite the rises in fraud, few companies are actually implementing new fraud prevention strategies or technologies.
We asked 500 organisations across the UK whether they had taken new measures to combat fraud in the past 12 months. An alarming 83.4% of financial services businesses said they hadn’t, despite 69.9% of respondents stating they had seen an increase in fraud over the past year.
So what is holding organisations back?
In a fiercely competitive market, businesses must do all they can to attract new customers. The challenge is how to minimise losses through fraud, whilst maximising gains through a fast onboarding process. Given the lifetime value of “good” customers, often the gains massively outweigh the losses. However, that can change if fraud results in reputational loss, damage to brand or AML fines for example.
The problem faced is how to recognise and stop first party identity fraud when criminals can get hold of data such as names, dates of births, and addresses through stolen mail, the dark web, hacking or exploiting information on social media. How can financial services companies be certain that people are who they say they are, especially when business is conducted over the internet and organisations no longer see their customers face to face?
GBG IDscan delivers a fast digital onboarding process for the “good” customers, whilst putting in place safeguards which work as part of a digital fraud prevention strategy. Checks include the recognition and classification of identification documents, validation of key information stored on the document and digital tamper checking. These checks can be completed digitally, in less than 5 seconds.
Customers can then choose to implement further measures, such as face matching with a selfie and liveness checking, to ensure that the person applying is the same person as in the identification document, and not a photograph.
As customers move through the journey, the GBG IDscan software explains step-by-step what’s happening and why. This has two advantages. First it reassures the “good” customers that the business cares about identity and fraud, and is therefore more likely to look after theirs. This has a positive impact on brand and reputation; the sense of a company at the cutting edge of fraud detection. Second, it deters those individuals who are seeking to commit fraud.
To find out how GBG IDscan can help your business meet the challenge of a great customer onboarding experience that can help minimise fraud, simply click here.