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Authorised Push Payment fraud is growing, and as regulators begin to take action around the world to try to tackle it, we look at what financial institutions need to focus on now. APP fraud and social engineering scams In recent years, there has been a significant surge in reported instances of Authorized Push Payment Fraud (APP). These crimes, also known as financial scams, wire fraud scams, or social engineering scams in different parts of the world, refer to a type of fraud where criminals trick victims into authorising a payment to an account controlled by the fraud perpetrator for what the victim believes to be genuine goods or services in return for their money. Because the transactions made by the victim are usually done using a real-time payment scheme, they are often irrevocable. Once the fraudster receives the funds, they are quickly transferred through a series of mule accounts and withdrawn, often abroad. Because APP fraud often involves social engineering, it employs some of the oldest tricks in the criminal's book. These scams include tactics such as applying pressure on victims to make quick decisions, or enticing them with too-good-to-be-true schemes and tempting opportunities to make a fortune. Unfortunately, these tricks are also some of the most successful ones, and criminals have used them to their advantage more than ever in recent times. On top of that, with the widespread adoption of real-time payments, victims have the ability to transfer funds quickly and easily, making it much easier for criminals to take advantage of the process. APP Fraud and social engineering scams - cases and losses across the globe: View map Impact of AI on APP fraud Recent advancements in generative artificial intelligence (Gen AI) have accelerated the process used by fraudsters in APP fraud. Criminals use apps like Chat GPT and Bard to create more persuasive messages, or bot functionality offered by Large Language Models (LLMs) to engage their victims into romance scams and the more sophisticated pig butchering scams. Other examples include the use of face swapping apps or audio and video deepfakes that help fraudsters impersonate someone known to their victims, or create a fictitious personality that they believe to be a real person. Additionally, deepfake videos of celebrities have also been commonly used to trick victims into making an authorised transaction and lose substantial amounts of money. Unfortunately, while some of these hoaxes were really difficult to pull off a few years ago, the widespread availability of easy-to-use Gen AI technology tools has resulted in an increased number of attacks. A lot of these scams can be traced back to social media, where the initial communication between the victim and criminal takes place. According to UK Finance, 78% of APP fraud started online during the second half of 2022, and this figure was similar for the first half of 2023 at 77%. Fraudsters also use social media to research their victims which makes these attacks highly personalised due to the availability of data about potential targets. Accessible information often includes facts related to family members, things of personal significance like hobbies or spending habits, information about favourite holiday destinations, political views, or random facts like favourite foods and drink. On top of that, criminals use social media to gather photos and videos of potential targets or their family members that can later be leveraged to generate convincing deepfake content that includes audio, video, or images. These things combined contribute to a new, highly personalised approach to scams than has never been seen before. What regulators are saying around the globe APP fraud mitigation is a complex task that requires collaboration by multiple entities. The UK is by far the most advanced jurisdiction in terms of measures taken to tackle these types of fraud to help protect consumers. Some of the most important legislative changes that the UK’s Payment Systems Regulator (PSR) has proposed or introduced so far include: Mandatory reimbursement of APP scams victims: A world first mandatory reimbursement model will be introduced in 2024 to replace the previous voluntary reimbursement code which has been operational since 2019. 50/50 liability split: All payment firms will be incentivised to take action, with both sending and receiving firms splitting the costs of reimbursement 50:50. Publication of APP scams performance data: The inaugural report was released in October, showing for the first time how well banks and other payment firms performed in tackling APP scams and how they treated those who fell victim. Enhanced information sharing: Improved intelligence-sharing between PSPs so they can improve scam prevention in real time is expected to be implemented in early 2024. Because many of the scams start on social media or in fake advertisements, banks in the UK have made calls for the large tech firms (for example, Google, Facebook) and telcos to be included in the scam reimbursement process. As a first step to offer more protection for customers, in December 2022, the UK Parliament introduced a new Online Safety Bill that intends to make social media companies more responsible for their users’ safety by removing illegal content from their platforms. In November 2023, a world-first agreement to tackle online fraud was reached between the UK government and some of the leading tech companies - Amazon, eBay, Facebook, Google, Instagram, LinkedIn, Match Group, Microsoft, Snapchat, TikTok, X (Twitter) and YouTube. The intended outcome is for people across the UK to be protected from online scams, fake adverts and romance fraud thanks to an increased security measures that include better verification procedures and removal of any fraudulent content from these platforms. Outside of the UK, approaches to protect customers from APP fraud and social engineering scams are present in a few other jurisdictions. In the Netherlands, banks reimburse victims of bank impersonation scams when these are reported to the police and the victim has not been ‘grossly negligent.’ In the US, some banks provide voluntary reimbursement in cases of bank impersonation scams. As of June 2023, payment app Zelle, owned by seven US banks, has started refunding victims of impersonation scams, thus addressing earlier calls for action related to reported scams on the platform. In the EU, with the newly proposed Payment Services Directive (PSD3), issuers will also be liable when a fraudster impersonates a bank’s employee to make the user authenticate the payment (subject to filling in a police report and the payer not acting with gross negligence). In October 2023, the Monetary Authority of Singapore (MAS) proposed a new Shared Responsibility Framework that assigns financial institutions and telcos relevant duties to mitigate phishing scams and calls for payouts to be made to affected scam victims where these duties are breached. While this new proposal only includes unauthorised payments, it is unique because it is the first such official proposal that includes telcos in the reimbursement process. Earlier this year, the National Anti-Scam Centre in Australia, announced the start of an investment scam fusion cell to combat investment scams. The fusion cell includes representatives from banks, telcos, and digital platforms in a coordinated effort to identify methods for disrupting investment scams to minimise scam losses. To add to that, in November 2023, Australian banks announced the introduction of confirmation-of-payee system that is expected to help reduce scams by ensuring customers can confirm they are transferring money to the person they intend to, similarly to what has been done in the UK a few years ago. Finally, over the past few months, more jurisdictions such as Australia, Brazil, the EU and Hong Kong, have announced either proposals or the roll out of fraud data sharing schemes between banks and financial institutions. While not all of these schemes are directly tied to social engineering scams, they could be seen as a first step to tackle scams together with other types of fraud. While many jurisdictions beyond the UK are still in the early stages of the legislative process to protect consumers from scams, there is an expectation that regulatory changes that prove to be successful in the UK could be adopted elsewhere. This should help introduce better tracking of the problem, to stimulate collaboration between financial insitutions, and add visibility of financial instituitions efforts to prevent these types of fraud. As more countries introduce new regulations and more financial institutions start monitoring their systems for scams occurrences, the industry should be able to achieve greater success in protecting consumers and mitigating APP fraud and social engineering scams. How financial institutions can prevent APP fraud Changing regulations have initiated the first liability shifts towards financial institutions when it comes to APP fraud, making fraud prevention measures a greater area of concern for many leaders in the industry. Now the responsibility is spreading across both the sending and receiving payment provider, they also need to improve monitoring for incoming payments. What’s more, as these types of fraud are a global phenomenon, financial institutions from multiple jurisdictions might consider taking greater fraud prevention steps early on (before regulators impose any mandatory rules) to keep their customers safe and their reputation high. Here are five ways businesses can keep customers safe, while retaining brand reputation: Advanced analytics – advanced data analytics capabilities to create a 360° of individuals and their behaviour across all connected current accounts. This supports more sophisticated and effective fraud risk analysis that goes beyond a single transaction. Combining it with a view of fraudulent behaviours beyond the payment institution's premises by adding the ability to ingest data from multiple sources and develop models at scale allows businesses to monitor new fraud patterns and evolving threats. Behavioural biometrics – used to provide insights on indicators such as active mobile phone calls, session length, segmented typing, hesitation, and displacement to detect if the sender is receiving instructions over the phone or if they show unusual behaviour during the time of the transaction. Transaction monitoring and anomaly detection – required to monitor sudden spikes in transaction activity that are unusual for the sender of the funds as well as mule account activity on the receiving bank’s end. Fraud data sharing capabilities – sharing of fraud data across multiple organisations can help identify and stop risky transactions early, in addition to mitigation of mule activity and fraudulent new accounts opening. Monitoring of newly opened accounts – used to detect fake accounts or newly opened mule accounts. By leveraging a combination of these capabilities, financial institutions will be better prepared to cope with new regulations and support their customers in APP fraud. Identity & Fraud Report 2023 US Identity & Fraud Report 2023 UK Defeating Fraud Report 2023 EMEA & APAC

What are lenders prioritising when it comes to Gen AI? We take a look at five transformative use cases in lending, and organisational priorities for integrating Gen AI into customer lifecycle processes. Although Generative Artificial Intelligence (Gen AI) only launched publicly in the form of Chat GPT last November, adoption has been widespread and rapid. Even in typically risk-adverse industries like financial services, our research shows that there is widespread recognition that Gen AI could deliver a range of benefits across business functions. We identified five areas of focus for lenders based on our research. In a study conducted by Forrester Consulting on behalf of Experian, we surveyed 660 and interviewed 60 decision makers for technology purchases that support the credit lifecycle at their financial services organisation. The study included businesses across North America, UK and Ireland, and Brazil. The qualitative research showed that lenders are already using a type of Gen AI, Large Language Models (LLMs), in their operations, with a focus on testing across areas such as customer service and internal processes before deploying to credit operations. We look at the potential use cases, and how businesses are using Gen AI now. 1. Personalised customer experience Customers today expect a personalised lending experience that is tailored to their unique needs and preferences. GenAI can leverage customer data to generate personalised loan offers, recommendations, and repayment plans. This helps lenders improve customer satisfaction and loyalty, leading to increased customer retention and revenue growth. This is an area that is front of mind for the companies in our research – nearly half of businesses surveyed are planning to implement or expand technology capabilities to either upsell or retain customers in the next 12 months. Furthermore, 50% of companies believe that offering more tailored underwriting and pricing is a top priority in their credit operations, followed by 44% who also aim to increase personalisation in marketing, products, and services to their customers. According to the research, some organisations have formed alliances with technology providers like OpenAI and Microsoft to investigate and further explore the use of LLMs. These partnerships involve analysing customer data to identify opportunities for cross-selling. 2. Enhancing models with new data sources With new data sources emerging all the time, Gen AI is one of the technologies that will most likely accelerate the opportunity for businesses to incorporate them into models. Lenders could include sources such as social network data into their models by using LLMs. This unstructured data, including customer emotions and behaviours on social networks, would be treated as an additional variable in the models. According to the research social media data and psychometric data is already used across financial services, to varying degrees. It showed that 35% of retail companies use social media data, while 29% of FinTechs use psychometric data. Auto finance companies sit at lower end of the adoption scale, with only 12% using social media data and 15% psychometric data. 3. Operational efficiencies Gen AI can help bring operational efficiencies to customerjourneys across the entire lifecycle, offering lenders theability to automate and streamline various processes,resulting in improved productivity, cost savings, andenhanced customer experiences. One of the top challenges for businesses surveyed isimproving customer journeys during onboarding, and thiswas particularly significant for credit unions / buildingsocieties (53%). 4. Detecting and preventing fraud Gen AI can play a crucial role in fraud detection by analysing patterns and anomalies in vast datasets. By leveraging machine learning techniques, Gen AI models can proactively identify potentially fraudulent activities and mitigate risks. The ability to detect fraud in real-time improves the overall security of lending operations and helps protect lenders and borrowers from financial losses. Detecting and preventing fraud is a constant challenge for lenders. 51% of retailers and 47% of credit unions/ building societies surveyed said that reducing fraud losses is a key challenge for them. 5. Customer service Driven by advances in the machine learning and AI space, the world of customer service has benefited hugely from the adoption of virtual assistants and chatbots in recent years. This looks to continue, with businesses saying that LLMs are being tested for customer service purposes, allowing lenders to identify customer issues and automate actions. What's next for lenders? The research found that lenders are utilising various machine learning techniques like regression, decision trees, neural networks, and random forest, along with LLMs. Businesses are in the early stages of exploring how they can use LLMs in credit risk models, but it will undoubtedly involve a blend of existing and new capabilities. As with any emerging technology, it’s important to look at potential risk. The research indicated that organisations see challenges and concerns when it comes to the use of LLMs in their models. It is crucial to ensure the models are trusted, validated, and properly understood to avoid reliance on outsourced solutions and maintain control and visibility over the models’ functions. The ability to explain decisions in Gen AI to avoid bias can be difficult, and businesses will be watching the regulators to understand how best to proceed. There is no doubt, however, that Gen AI will optimise the credit customer lifecycle, creating vast opportunities for lenders. Download PDF More on Gen AI

With heightened consumer demand for an improved customer experience online, and the increasing threat of fraud, how can organizations ensure secure and efficient customer onboarding in today's digital landscape? Onboarding the highest number of customers while maintaining compliance and security Digital account opening is in demand. Businesses are competing to create the most effective onboarding experience, while managing the need to draw on multiple sources during account opening. The onboarding stage of the customer lifecycle plays a pivotal role in establishing trust between the customer and the business. Friction during the digital account opening process can lead to customer dropouts, resulting in lower growth for organizations. Moreover, the ever-present threat of fraud necessitates organizations to be vigilant and enhance customer journey with an added layer of verification and protection. Liminal, a leading market intelligence firm specializing in digital identity, cybersecurity, and fintech markets, recently recognized Experian as a market leader for compliance and fraud prevention capabilities and execution in its Liminal Link Index on Account Opening in Financial Services. Download report The report highlights that solution providers in financial services are focused on delivering high levels of assurance while maintaining regulatory compliance and minimizing user friction. Access to real-time verification data, risk analytics and decision-making strategies make it possible for clients to verify identities, detect and prevent fraud, and ensure regulatory compliance. Experian’s identity verification and fraud prevention solutions, including CrossCore® and Precise ID®, received the highest Link Score out of the 32 companies highlighted in the report. It found that Experian was recognized by 94% of buyers and 89% identified Experian as a market leader. “We’re thrilled to be named the top market leader in compliance and fraud prevention capabilities and execution by Liminal’s Link Index Report. We’re continually innovating to deliver the most effective identity verification and fraud prevention solutions to our clients so they can grow their business, mitigate risk and provide a seamless customer experience.”Kathleen Peters, Chief Innovation Officer for Experian’s Decision Analytics business in North America The report offers valuable insights into the market overview, demands, challenges, purchasing criteria, vendor landscape, landscape analysis, and buyer opportunities. Access full report

As economic uncertainty continues to loom, the threat of fraud continues to grow and is becoming more sophisticated. It’s only going to get worse. Due to intensifying inflationary pressures, prices and costs have been increasing which has led to financial hardship impacting individuals and businesses. This provides an opportunity and motive for bad actors to figure out new ways to commit fraud. Federal Trade Commission data shows that consumers reported losing nearly $8.8 billion to fraud in 2022, an increase of more than 30 percent over the previous year. PwC’s Global Economic Crime and Fraud Survey 2022 shows 51% of surveyed organisations say they experienced fraud in the past two years, the highest level in their 20 years of research. Additional investments in fraud prevention technology are a priority for businesses to combat these evolving threats, according to Experian's Sept. 2022 Global Insights report, which states that 94% of businesses report it as the top priority. Since fraud is becoming more sophisticated, part of the challenge that businesses face is to constantly evaluate multiple solutions so that they can continuously improve their fraud detection and prevention capabilities. Investments that can deliver the highest ROI are the solutions that are integrated and orchestrated in a comprehensive fraud reduction intelligence platform. This gives businesses the flexibility to manage evolving strategies and mitigate threats with real-time decisioning. Experian’s CrossCore is an integrated digital identity and fraud risk platform. It offers global solutions to help protect businesses from fraud and maintain compliance with regulatory requirements, using real-time risk analytics and decision-making strategies. The platform aggregates various fraud and identity verification sources to consolidate risk and trust decisions for Experian clients throughout the consumer journey.   Experian’s CrossCore has been recognized as an Overall Leader, Innovation Leader, Product Leader, and Market Leader in KuppingerCole’s Fraud Reduction Intelligence Platform Leadership Compass 2023. This recognition highlights Experian's comprehensive approach to combating fraud. It validates that CrossCore offers best-in-class capabilities by augmenting Experian’s industry-leading identity and fraud offerings with a highly curated ecosystem of partners which enables further optionality for our clients based on their specific needs.  Read the report CrossCore's Capabilities

Latest Global Insights Report: How supporting consumers in a time of uncertainty can help businesses adapt and grow A changing economic landscape needs a new approach The new digital consumer is here to stay and they expect businesses to support them with the products and services they need to navigate the rising cost of living, in a secure digital world personalised to them. Find out how: Our latest research reveals how economic uncertainty is evolving the experiences and expectations of digital consumers. From increasing the demand for credit options and financial inclusion, to deepening the need for trust, security and being seen. Read the report to find out how businesses can benefit from responding to changing consumer needs - including the additional tools and resources consumers and businesses may need to maintain financial health: What do digital consumers want? The global economy is under pressure with inflation raising prices across the world. In response, consumer behaviour is shifting, as people tackle the increased cost of living, and the prospect of an economic downturn. Digital consumers are continuing to manage their lives online and are expecting businesses to take the lead on improving the digital environment. A quality online experience is paramount, or consumers will move on. 1 in 4 businesses lost more than 10% of their customers in 2021, due to “suboptimal” digital experiences. A range of payment options including BNPL As prices rise, consumers are expecting to spend more online and are looking for varied credit options to help manage their finances. The demand for buy-now-pay-later (BNPL) options is also growing, with more consumers using BNPL to buy household staples. Consumers look favourably on companies that offer BNPL, but companies will have to find the right balance between supporting customers and managing credit risk. 32% of BNPL purchases were for groceries, up from 27% in March. Financial inclusion Economic uncertainty is accelerating the need for greater financial inclusion. Businesses need to find more creditworthy consumers and support them with responsible and sustainable products and services. 1 in 3 businesses is in the process of rolling out financial inclusion initiatives Security and trust As consumer need increases, so does fraud, including cost of living scams. Security is now a top priority for consumers around the world, alongside privacy, convenience and personalisation. 50% of consumers say they’re concerned about their online transactions. However, trust in emerging customer recognition tools is increasing, with consumers’ top three including physical biometrics, PIN codes and behavioural biometrics. Personalisation Consumers who trust businesses are more willing to share their data, enabling companies to create more personalised experiences, which in turn, improves consumer trust. 46% of consumers say that personalisation (receiving offers that fit their needs) is the most important aspect of their online experience. Read our report to discover the challenges and opportunities facing consumers and businesses and the tools, resources and strategies that can help your company get ahead. The survey results represent 6,000 consumers and 2,000 businesses across 20 countries, including Australia, Brazil, Chile, China, Columbia, Denmark, Germany, India, Indonesia, Ireland, Italy, Malaysia, Netherlands, Norway, Peru, Singapore, South Africa, Spain, UK, and US.   Read our report

Latest Global Insights Report: How supporting consumers in a time of uncertainty can help businesses adapt and grow A changing economic landscape needs a new approach The new digital consumer is here to stay and they expect businesses to support them with the products and services they need to navigate the rising cost of living, in a secure digital world personalised to them. Find out how: Our latest research reveals how economic uncertainty is evolving the experiences and expectations of digital consumers. From increasing the demand for credit options and financial inclusion, to deepening the need for trust, security and being seen. Read the report to find out how businesses can benefit from responding to changing consumer needs - including the additional tools and resources consumers and businesses may need to maintain financial health. What do digital consumers want? The global economy is under pressure with inflation raising prices across the world. In response, consumer behaviour is shifting, as people tackle the increased cost of living, and the prospect of an economic downturn. Digital consumers are continuing to manage their lives online and are expecting businesses to take the lead on improving the digital environment. A quality online experience is paramount, or consumers will move on. 1 in 4 businesses lost more than 10% of their customers in 2021, due to “suboptimal” digital experiences. A range of payment options including BNPL As prices rise, consumers are expecting to spend more online and are looking for varied credit options to help manage their finances. The demand for buy-now-pay-later (BNPL) options is also growing, with more consumers using BNPL to buy household staples. Consumers look favorably on companies that offer BNPL, but companies will have to find the right balance between supporting customers and managing credit risk. 32% of BNPL purchases were for groceries, up from 27% in March. Financial inclusion Economic uncertainty is accelerating the need for greater financial inclusion. Businesses need to find more creditworthy consumers and support them with responsible and sustainable products and services. 1 in 3 businesses is in the process of rolling out financial inclusion initiatives Security and trust As consumer need increases, so does fraud, including cost of living scams. Security is now a top priority for consumers around the world, alongside privacy, convenience and personalisation. 50% of consumers say they’re concerned about their online transactions. However, trust in emerging customer recognition tools is increasing, with consumers’ top three including physical biometrics, PIN codes and behavioural biometrics. Personalisation Consumers who trust businesses are more willing to share their data, enabling companies to create more personalised experiences, which in turn, improves consumer trust. 46% of consumers say that personalisation (receiving offers that fit their needs) is the most important aspect of their online experience.   Read our report to discover the challenges and opportunities facing consumers and businesses and the tools, resources and strategies that can help your company get ahead. The survey results represent 6,000 consumers and 2,000 businesses across 20 countries, including Australia, Brazil, Chile, China, Columbia, Denmark, Germany, India, Indonesia, Ireland, Italy, Malaysia, Netherlands, Norway, Peru, Singapore, South Africa, Spain, UK, and US.   Download Report

Our latest Global Identity and Fraud Report reveals that fraud has been of high concern for consumers over the past year. In fact, more than half of consumers report that they are worried about online transactions, and 40% say that their concern has increased over this period. Data breaches, well-publicised scams, and direct first-hand experience with fraud have all contributed to these higher levels of concern. Our study shows that 77% of consumers had increased concern after experiencing online fraud, with more than half of consumers surveyed having had a close encounter with fraud: 58% of consumers say they have been a victim of online fraud, know someone who has been a victim, or both 57% of consumers say they have been a victim of identity theft, know someone who has been a victim, or both 53% of consumers say they have been a victim of account takeover, know someone who has been a victim, or both As a consequence, it makes sense that consumers rank security and privacy above convenience and personalisation when evaluating their online experience and expect businesses to take the necessary security steps to protect them online. We look at the main factors that play a role in the high levels of fraud concern among consumers and what businesses should do to address challenges in their fraud strategies. Three contributing factors to increased fraud concern among consumers Identity fraud has increased  Our research also unveils that identity theft has overtaken credit card theft as consumers’ biggest security worry across all age groups. Furthermore, a recent report from the UK showed that recorded cases of identity fraud have grown by 22% over the past year. Fraud prevention and security professionals have been trying to educate consumers for a long time on this topic. Stealing identity data and using it in multiple fraud schemes can be significantly more harmful than criminals having access to someone's credit card numbers, where transactions can be traced quickly and revoked or charged back. While many factors contributed to an increase in concern about identity theft, the most impactful over the past two years were the numerous cases of unemployment and benefits fraud. Multiple countries reported cases where criminals applied for loans in the name of genuine consumers or through synthetic identities, created by combining real stolen information with fake data. The cost of these scams is yet to be discovered, and it could take years to see their full effect, with fraud losses well into the billions (if not trillions) of dollars worldwide. Criminals can access stolen data and fraud tutorials beyond the dark web To commit many types of fraud, criminals need Personal Identifiable Information (PII) that is stolen through techniques such as hacking attacks, credential harvesting, credential stuffing, phishing, or other types of social engineering. For years the knowledge of how to do that, along with the stolen data available after a successful attack, was available mainly on cybercriminal forums accessed through the dark web. However, over the past year, it has become easier than ever to obtain not only PII data but also valuable information on how to bypass some of the security and fraud features in place for a certain institution. Criminals no longer need to go to the dark web to do that - it's available on platforms like Telegram, just a few clicks away, where other fraudsters are selling tutorials (often called 'Sauce') on how to commit fraud, as well as PII data (called 'Fullz') to achieve it. As a result, the entry level for those that want to commit fraud has been set lower than ever before - both in terms of skillset and accessibility. Phishing and scams are at all-time high Another contributing factor to the increase in consumer concern is the number of scams resulting in authorised push payment fraud, which totalled £583.2 million in the UK alone during 2021. Criminals continue to seek out consumer vulnerabilities and use a variety of tactics to apply pressure on their victims and convince them to transfer money out of their bank accounts. This could take many forms - from various types of impersonation scams, romance scams, and investment (fraud) opportunities, to scams related to utility bills and easy loan offers among other types. This wouldn't be possible without numerous phishing/smishing/vishing attempts and the amount of data available through data breaches. One other factor that helps criminals is the direct access to potential victims given by social media and the sheer volume of personal information available in the public domain. These types of scams sometimes get high publicity (and rightly so) which can also contribute to the increased level of concern among the public while also applying additional pressure on financial institutions to improve their fraud screening and transaction monitoring capabilities to protect consumers. How businesses can improve fraud screening capabilities and increase consumer trust To restore consumer trust, businesses need to look for ways to improve their capabilities both at account opening and login to prevent criminals from gaining easy access to their services. There are multiple ways to do that, from introducing online identity document verification or phone-centric identity verification capabilities at the account opening stage, to adding behavioural biometrics, device intelligence, or fraud data sharing capabilities during different stages of the customer journey. By introducing some of these capabilities businesses also can improve the digital customer journey for genuine consumers and increase trust. Online identity document verification and phone-centric identity verification solutions both offer pre-fill capabilities. These tools can streamline registration processes and thus contribute greatly to a positive consumer outlook of the company that offers them. While behavioural biometrics, device intelligence, and fraud data sharing tools are invisible to both fraudsters and genuine consumers creating a more frictionless experience. Businesses should look carefully at the fraud they are experiencing along with fraud trends shared by similar businesses. This should help inform whether to introduce new capabilities as part of the existing strategy. It's common that companies might need a mix of capabilities to mitigate fraud issues, with additional support from machine learning models to blend them into one cohesive output while limiting the number of false positives and building consumer trust. Stay in the know with our latest research and insights:

It's hard to imagine an individual customer volunteering to remember multiple online passwords for various online accounts. Yet, for most of internet history, passwords have served as the backbone of online security and recognition—and given fraudsters easier access to our personal and financial data. Fortunately, our recent report reveals that consumers and businesses are evolving how they think about online recognition and authentication. Passwords are no longer consumers' preferred method of online security. For the second year, they didn't even make the top three list of what consumers consider the safest recognition methods. Instead, consumers are increasingly open to a variety of recognition tools, from physical and behavioral biometrics to one-time passcodes. By providing recognition choices, companies can improve the customer experience, decrease fraud, and ultimately build even more brand trust. Consumers are moving beyond passwords, but what should come next? Around the world, consumer fraud concern is rising in tandem with fraud activity. More than half of consumers report that they're worried about fraudulent online transactions, and 40% say that their concern has grown over the past year. That's likely because online fraud has become a far too common experience. For instance, 58% of consumers say that they've been a victim of fraud or know someone who has been a victim, and 83% of consumers say online security is their top priority. The awareness has made consumers more interested—and more confident in—emerging online recognition tools. It seems that many are not only tired of passwords but also understand how easily passwords can be compromised. Those surveyed ranked physical biometrics, pin codes delivered to a mobile device, and behavioral biometrics as the safest recognition methods. Notably, consumer confidence in each of the top three methods has increased significantly since 2021. This confidence in advanced recognition tools spans generations. For instance, 90% of Baby Boomers rank physical biometrics as the most secure, and 82% of Gen Xers and 75% of Gen Z say the same. Meanwhile, 81% of Millennials say behavioral biometrics are the most secure. These survey results suggest that most consumers are aware of fraud risk and willing to explore technologies that make their online transactions safer. Why recognition choice leads to better business outcomes Amidst this environment of change, financial service companies have the opportunity to introduce advanced recognition methods. Consumers are showing their willingness to move beyond passwords. But which recognition method should financial service companies choose? Which one will win out over the others? There's no one right answer. Consumers rank physical biometrics, pin codes, and behavioral biometrics as their top three preferences; however, there is no runaway leader in the group. Which method consumers prefer depends on what they're prioritizing. For instance, consumers who want convenience prefer physical biometrics, while people who value security tend to like two-factor authentication. The ambiguity around preferences allows businesses to introduce choice to their customers. Companies can offer visible methods that give customers access to the newer recognition tools they're beginning to prefer. Meanwhile, continuing to layer invisible methods that strengthen the overall security profile and enhance the customer experience. A menu of recognition options speaks to customer sentiments toward emerging technologies and may engender more trust and loyalty to a brand. For example, our 2022 research shows that 59% of consumers say that use of artificial intelligence increases their trust in a company. The key is being transparent about the choiceson offer and the role they play in protecting customer accounts and data. For example, explaining that the data underpinning specific authentication methods never leaves the device can go a long way with customers who may have misguided assumptions or reservations about specific recognition tools. The orchestration imperative Implementing choice can help customers improve the perception—and reality—of their online security. But leveraging multiple recognition options can also help organizations to better fight fraud. Multiple options enhance understanding of the customer and enables data analysis that can more easily identify outliers. The numerous data points strengthen recognition efforts, which further reinforces trust. It's a virtuous cycle that improves the customer experience and benefits the business. However, implementing multiple recognition methods can be a costly endeavor. Whether using outside vendors or developing and maintaining tools in-house, businesses should be layering recognition tools in the most efficient (and affordable) way. This is where orchestration tools really help. Creating secure environments for customers and businesses will continue to be complicated. Fraudsters are only getting more creative, and mitigating their impact requires a complex web of solutions that stymies them at various points. By starting with an orchestration engine, businesses can launch and manage multiple recognition methods more elegantly, using each tool correctly and at the right point in the customer journey. This strategic approach creates a single point of access to fraud and identity solutions, giving a 360-degree view of customer identity and reducing friction across the customer lifecycle. The days of passwords as the primary recognition tool are waning. Today's consumers understand the benefit of advanced recognition methods and will use them to increase their security, convenience and privacy. Offer customers choices, and businesses can meet these evolving expectations and decrease fraud risk along the way. Stay in the know with our latest research and insights:

Online fraud has increased at unprecedented levels over the past two and half years, with numerous reports coming from all corners of the world to confirm that. From benefits and unemployment fraud to authorised push payment fraud, and more advanced scams such as synthetic identity fraud and deepfake fraud, cybercrime has been on the rise. Understandably, the increase in criminal activity has had a significant impact on financial services businesses, and it is little wonder that this has been reflected in our recent study: • 48% of businesses reported that fraud is a high concern, and 90% reported fraud as a mid-to-high concern • 70% of businesses said their concern about fraud has increased since last year • 80% of businesses said that fraud is often or always discussed within their organisations High levels of fraud have also raised consumer concern, and their expectations of the protection businesses should offer them. Nearly three-quarters of consumers said that they expect businesses to take the necessary security steps to protect them online. However, only 23% of respondents were very confident that companies were taking steps to secure them online. Businesses need to take additional steps to meet consumer demand, while also protecting their reputation and revenue streams. Businesses are investing in fraud prevention, so why isn’t it working? As a result of the rise in fraud during the pandemic, there has been an increase in spending related to fraud prevention tools and technology, with 89% of businesses surveyed in our latest research indicating that investment in fraud detection software is important to them. However, there is a risk that institutions could take a siloed approach, and funds could be spent on point solutions that solve one or two problems without adding the needed flexibility to fight multiple attack patterns. This gives fraudsters the opportunity to exploit these gaps. Orchestration and automation drive fraudsters away Criminals constantly evolve. They are not new to technology and have multiple attack patterns that they can rely on. They also share information between themselves at a higher rate and pace when compared with financial institutions, banks, and merchants. Fraudsters can learn how to bypass one or two features in an organisation’s fraud prevention strategy if they recognise weak spots or a vulnerability that they can take advantage of. However, when multiple fraud prevention tools and capabilities work harmoniously against them, the chances are higher that they will eventually be blocked or forced to move to a weaker place where they can exploit another system. Synchronizing multiple solutions together is the key to excellent fraud orchestration Fraud orchestration platforms give businesses the chance to layer multiple solutions together. However, taking a layered approach is not only about piling multiple point solutions but also about synchronizing them to achieve the best output possible. Every solution looks at different signals and has its own way of scoring the events, which is why they need to be governed into a workflow to achieve the desired results. This means that institutions can control and optimize the order in which various solutions or capabilities are called, as the output of one solution could result in a different check for a subsequent one or even the need to trigger another solution altogether. It also gives companies the ability to preserve their user journeys while answering different risks presented to them. Some businesses are seeking to build trust with customers but want to stay invisible to remove friction from their digital customer experience. This is where capabilities such as device intelligence, behavioural biometrics, or fraud data sharing could be added as an additional layer in the fraud prevention strategy. Those additional solutions may only be called 30 per cent of the time when there is a real need for an additional check. Excellent orchestration means that organisations can rely on multiple solutions while only calling the services they need, exactly when they need them. Building trust through a secure but convenient customer experience. Machine Learning should be the final layer to rule them all The results from our research revealed the top initiatives that businesses are leveraging to improve the digital customer journey with the top two being: • Improving customer decisioning with AI • New AI models to improve decisioning While our April 2022 Global Insight Report showed that consumers are becoming more comfortable with AI, with 59% saying they trust organisations that use AI. Fraud orchestration platforms allow companies to deploy unified decisioning by leveraging machine learning (ML) on top of multiple fraud prevention tools. This means they can rely on one cohesive output instead of looking at separate, sometimes contradictory results across various platforms and making subjective decisions. ML can also offer explainability by pointing out the attributes that contributed the most to a particular suggestion or decision. These could be attributes coming from a few different tools instead of one. This also means that operational teams, like fraud investigators, have a single view of activity, resulting in operational efficiency - removing the need to log in to different tools and look at multiple screens, views, and scores, while also enabling faster decisions. Stay in the know with our latest research and insights:

Did you miss these June business headlines? We’ve compiled the top global news stories that you need to stay in-the-know on the latest hot topics and insights from our experts. Protecting customer accounts: The defining domain of digital CISOs CIO reports on data from Experian's latest Global ID & Fraud Report to look at why expanding challenges and responsibilities around customer and employee data protection and user experience means that the right authentication solution is critical. Experian says 25% of consumers were victims of online fraud in Asia Pacific Fintech News looks at Experian's latest Global ID & Fraud Report, citing that a quarter of consumers across Asia Pacific (APAC) have been victims of online fraud, but across all markets surveyed in the region, many remain unconcerned about fraud and identity theft amidst today’s growing fraud risk due to digitisation. Experian India launches PowerCurve Strategy Management, cloud-based decisioning solution The Business Information Industry Association reports that Experian India has launched a new PowerCurve Strategy Management solution, a powerful decisioning solution delivered as software-as-a-service via cloud. Digital wallets win over Brazilian consumers; Interview with Caio Rocha, gives Serasa expert opinion Serasa's Caio Rocha talks to Jovem Pan News in an exclusive interview discussing Experian's recent Global ID & Fraud Report, highlighting that 9 out of 10 Brazilians consider digital wallets safe. Stay in the know with our latest research and insights:

Experian’s latest research shows that the crisis of the past few years has yielded a new, savvier digital consumer. With the rapid move to online services amidst the pandemic, consumers worldwide adapted—and quickly. Fifty-three per cent of consumers say they have increased their online spending and transactions within the past three months, and 50% plan to increase it even more over the next few months. As online activity has surged, so too have consumer expectations for friction-free, secure transactions. More than 80% of consumers say a positive online experience makes them think more highly of the brand. And if businesses don't meet those expectations? Well, switching providers is only becoming easier . For financial service providers, the evolution of consumer behaviour presents both an opportunity and a challenge. It's never been more critical to ensure that digital experiences are convenient and frictionless. However, soon that will be the expectation and not the draw for new customers. Instead, finding unique ways to compete will be what separates the good from the great. Convenience versus risk In our latest survey, consumers ranked security, convenience, and ease of recognition as the top contributors to a positive online experience. All of these are vital components to providing a frictionless transaction. However, seamlessly logging in to a financial app, applying for credit, or managing a balance isn't yet the standard for every provider. Many traditional banks continue to play catch-up with digital upstarts, but consumers are becoming less tolerant of barriers to accessing services and products, with 23% saying that businesses aren’t meeting their expectations for digital experiences. This provides businesses with the opportunity to attract and retain new customers, especially those tired of manual account onboarding processes. For instance, leveraging emerging recognition tools adds to the convenience factor, limiting the time customers spend inputting data and streamlining the entire experience. But even as they continue to prioritise frictionless processes, businesses should be wary of sacrificing security or increasing their own risk. In our survey, 73% of consumers said that the onus is on businesses to protect them online. While they don't want security efforts that slow down their transactions, they expect the level of security to remain high nonetheless. On the business side, we've also seen providers creating friction-free options for lending—for example, in the Buy Now, Pay Later (BNPL) space—that enable consumers to access credit nearly immediately. But even with the convenience, there is still a need to manage affordability and ensure that these customers aren't introducing additional risk to credit models. Differentiate to retain customers: The growing role of rewards With all the innovation underway, a friction-free experience will become the standard. And it may already be so among digital-first businesses. This begs the question: If a secure, convenient experience is the norm for consumers, then how can businesses differentiate themselves? The next competitive differentiator will be how businesses reward customers for their loyalty. It's no longer enough to provide new customers with low-interest or no-interest credit on small purchases. Forward-looking financial services providers are getting far more creative with their rewards. For instance, businesses offering BNPL are enabling their customers to accumulate loyalty points for using the service with multiple retailers. Customers can then put those points to use as discounts on merchandise from the places they already love to shop. Data sharing and analytics play a significant role in this approach, allowing businesses to understand their customers' behaviours and personalise offers and rewards. Notably, our survey reveals that 83% of consumers say their awareness of how companies use their personal data for security, convenience, and personalisation has increased. Today's consumers are as digital as ever, and there's no going back. While friction-free may have been the differentiator before, it's rapidly becoming the standard. Going forward, financial services providers will need to find a new way to compete for savvy consumers who expect—and demand—secure, frictionless online experiences. Stay in the know with our latest research and insights:

The evolving expectations and experience of the new digital consumer The expectations of consumers are changing rapidly. People of all ages and incomes are online, seeking the right products and services to manage their financial lives digitally in a secure, speedy, and frictionless environment. A look inside: Our latest research reveals the rise of a new digitally savvy consumer—one who is increasingly aware of new payment methods, advanced recognition tools, and the use of AI, and has higher expectations of their digital experience. Read the report to find out what businesses can do to harness the digital opportunity: 1. Leveraging the AI advantage 2. Incorporating embedded finance 3. Introducing new, more secure technologies 4. Educating consumers about how you use their data 5. Exploring solutions that aggregate emerging technologies Online spending is continuing its upward trend, with 53% of consumers surveyed saying they have increased online spending and transactions in the past three months, and 50% predicting that their spending will increase in the next three months. Enabling this shift is the extent to which businesses can provide a quality digital experience. 81% of consumers said that a positive online experience, which includes interactions with multiple digital touchpoints makes them think more highly of a brand. Consumers simply do not tolerate poor-quality online experiences and will take their loyalty to businesses that can meet their expectations. Speed and security are a driving force for consumers in the payments space, which is reflected in rapid rise in mobile wallet payments. Rivalling traditional payment methods, 62% of consumers say they’ve used a mobile wallet in the last six months. Consumers are embracing these new habits across the board, with 18% saying they have used BNPL in the past six months, and 71% seeing it as secure. With the rise and increasing awareness of new payment methods like BNPL, consumers who have lacked access to traditional banking, lending and credit cards now have additional financial options, giving businesses the opportunity to prioritise financial inclusion. The rise of new and increased online activity has resulted in increased concerns about online security, with 42% of consumers more concerned than they were 12 months ago. With this awareness comes opportunity for businesses to leverage new recognition approaches. Biometrics seems to resonate with consumers, with 81% reporting that they feel most secure when encountering physical biometrics. Trust and security are becoming interdependent, with consumers expecting strong security measures from businesses. 73% of consumers say that the onus is on businesses to protect them online, and 45% identify the belief that businesses have strong security measures in place as the top reason to trust an online transaction. As consumers become ever-more educated and aware of the digital world, they want businesses to communicate with them about why they are using personal data. 63% of consumers are willing to share their data and see it as beneficial to them if they see security and convenience in return. We surveyed 6,000 consumers and 2,000 businesses from 20 countries worldwide as part of our ongoing efforts to learn more about how, why, and where consumers interact with businesses online. Read the full report Stay in the know with our latest research and insights: