Tag: Identity & Fraud

Public and private organizations worldwide are embarking on ambitious digital identity initiatives, from the tiny country of Estonia to efforts that encompass much of Africa and India. At the core, the broad goal is often the same: Use blockchain or equivalent technology to provide individuals with a unique digital identifier. That digital identity then enables seamless, secure access to services—governmental, financial, or otherwise. However, as you delve into the details of each program, there remain more differences than similarities. Organizations may have different drivers for pursuing digital identities and varied approaches. And in these early days of digital identity development, there’s not yet a single plan for aligning initiatives across the public and private sector or even within the financial services industry. So how do organizations evaluate where to invest and when to act, when efforts are progressing and changing in real-time? The impetus now is to understand the fundamentals of digital identity programs and then evaluate what your organization stands to gain—or potentially lose. Get that sorted, and you’ll be ready to make smart digital identity decisions at the right time for your company and customers. The fundamentals of blockchain Much of the digital identity conversation centers around the notion of blockchain-based digital identity programs and their benefits to consumers or citizens. Broadly, these programs enable individuals to have a digital identity profile, which is tied to a basket of attributes and stored on a blockchain. Those attributes are verified when the identity is established. Consumers then use their digital ID, for example, to access their financial applications. And organizations can verify the person via their digital identity token. Such programs provide privacy for consumers; they also promise to accelerate and secure all sorts of processes from applying for loans to paying taxes. That’s because, with a digital identity, consumers don’t need to re-submit documents or provide personal information to various businesses and entities. Instead, they can allow institutions to access their digital identity for proof of who they are. The potential for such programs is already exciting, and we’ve likely just scratched the surface of what’s possible. Still, most of the discussions leave out a critical component. That is: how will programs establish a digital identity in the first place? As financial institutions assess the digital identity landscape, digging into how programs ensure that the right information makes it into the system is paramount. As the saying goes, it’s garbage in, garbage out. Regardless of how innovative the technology is, a consumer’s digital identity is only as ​trustworthy as the information that created it. The digital identity trade-offs The security of digital identities is very compelling—especially as cybercriminals become increasingly sophisticated. Businesses can easily authenticate customers, and consumers have more control over their information, which is an issue of growing importance. A recently released Experian study shows that consumers are most concerned about protecting their financial data over other types of information. As privacy and security assurances become part of the financial service value proposition, digital identity programs will likely be a differentiator for companies. That said, doubling down on digital identity can initially seem at odds with another dual technology priority: Taking advantage of data to provide hyper-personalized financial products and services. By tokenizing identity information, organizations may need to forgo some of the data that enables that personal, customized approach. In the long run, I believe companies will find creative ways to balance privacy with personalization needs. For instance, customers may rely on digital identities to navigate their financial networks and then opt to provide additional information about themselves in return for better, more personalized service. Financial institutions will need to weigh some similar factors when leveraging digital identity programs to improve customer experience. Digital identity programs promise to remove the friction caused by customer recognition and authentication. Again, the organization may give up some data collection to enable that seamless experience. But in the long run, companies will likely find that the related improvements and revenue opportunities gained more than makeup for any sacrificed information. ​At the same time, against a backdrop of an increasing number of stolen identity records, the idea that a digital identity program can help reduce the excessive proliferation of sensitive personal data is a significant benefit. The road ahead Financial institutions should prepare for the pending digital identity journey—even if they haven’t yet embarked. There are still multiple issues that the industry, consumers, and regulators will have to settle. For instance, there’s the question of adoption and how long it will take for businesses and consumers to use digital identity programs regularly. As we’ve discussed before, consumer trust ​and availability will remain a considerable component in driving that adoption. What’s more, we’ll likely see regulations follow digital identity efforts as specific initiatives gain steam and popularity. The rules may accelerate adoption or, conversely, increase the investment expense on behalf of financial service firms. For these reasons, financial institutions need to be involved early and voice their concerns often to ensure that regulations serve consumers without adversely affecting the business. In the meantime, businesses should remain aware that digital identity is a fragmented market, which may ultimately settle into an “ecosystem of ecosystems” across programs. It will be critical for enterprises to plan accordingly if they want to become early adopters. Or, at the very least, companies with a more moderate strategy should wait until a leading program emerges before making a significant investment. Digital identities represent a dramatic shift in how consumers navigate their online world and how companies continue to meet their online expectations and needs. Keep these developments on your radar, and you’ll be prepared to make smart digital identity decisions and investments. Related stories: Infographic: Global Identity & Fraud Trends, February 2020 The impact of Covid-19 on Consumers and Businesses, July 2020 The impact of Covid-19 on Consumers and Businesses, Oct 2020

The Covid-19 crisis has been a bit like existing inside a shaken snow globe—it disrupted everything, and a lot remains up in the air. However, amidst the uncertainty of the pandemic, one thing has become evident: Cultivating customer trust is more critical than ever. Trust naturally generates loyalty. This is especially true during and after a crisis. For example, Experian's latest global research from July 2020 shows 52% of customers who felt that businesses treated them fairly during the pandemic plan to give those companies more of their business. That fairness bred trust and that trust will undoubtedly lead to more business. As consumers continue to increase their digital transactions, companies need to work hard to enhance customer trust. Improved identity authentication and recognition, for example, will play a key role. As everything begins to settle, those that succeed will find their business on far more steady ground. Does trust even matter? It's a good question—and the answer may be evolving in real-time. Consider that in 2019, Experian's global identity & fraud study showed that digital adoption did not indicate consumer trust of the business. "Consumers still adopt digital channels despite being highly skeptical of the businesses," the study noted. Social media provides an excellent example. Overall, most consumers distrust many of the popular social media platforms, yet they continue to use them regularly. Interestingly, widespread adoption is linked more to convenience than trust. However, this comes with a real caveat: Customers are less concerned about trust when the product is more frivolous. For instance, not trusting a media outlet or social media platform is very different from not trusting a financial institution. Also, a lack of adoption doesn't always mean that customers don't trust the business. In the financial service and payments realm, low adoption may simply reflect that customers use the platforms less regularly. Now, as consumers increase their reliance on online services, maintaining trust will be paramount. For instance, since Coronavirus began, consumers have increased their use and awareness of mobile wallets by 8%, and their use of retail payment apps by 6%. Balancing the convenience that people have needed with the necessary trust will go a long way towards keeping usage high once the crisis subsides. A virtuous cycle Within any digital experience, several components inform customer trust. You want to ensure accurate customer recognition, as well as transparency with your authentication. Robust fraud protection and positive digital experiences also play essential roles. These form the Cycle of Trust, a virtuous circle that ultimately encourages customers to share more information with your company and pursue more transactions. Our 2019 study reveals the importance of each part of this cycle, and we see it playing out now. For example, 90% of consumers are willing to participate in a more thorough identity verification process early on to have easier account access in the future. The ability to routinely and accurately recognize your customers helps build their trust in your technology and products. Also, 76% of customers have more confidence in companies that use biometrics over passwords to protect their information. That means that you can use advanced authentication strategies to enhance trust even more. Transparency also comes into play. Letting people know how you're using their information and whom you're sharing it with makes them more apt to trust your organization—and continue to share their data. The future of trust This cycle represents the goal. In practice, though, there are still quite a few challenges that prevent organizations from getting that wheel spinning. For instance, many have separated the risk assessment processes of verifying customers at signup, logging in, and transacting, so there's no seamless experience. Instead, customers navigate different solutions to onboard, authenticate their identity, and complete transactions. A company may recognize a customer at one point in the process, but not all the way through. What's more, organizations often still place the onus on the consumer for how they represent themselves in the digital world. Authentication processes require them to remember passwords or retrieve codes from their phone. But as noted, the pandemic has opened an opportunity for dramatic improvement. Consumers are at a rare moment in which they're open to change—and they're even looking for it. For example, since the beginning of the pandemic, 60% of customers say they have higher expectations for online experiences. More than half of customers are also more willing to provide organizations they trust with personal information and financial data. Finally, 44% of customers note that since Covid, they are more trusting of companies that demonstrate security. So how can you increase trust while also meeting evolving customer expectations? Organizations that pave the way will likely assume more responsibility for recognizing and authenticating customers. This starts with becoming more creative in using the data they already have access to recognize and authenticate customers. Extending this passive and continuous recognition across channels will also be necessary. Doing so connects the disparate processes and creates a more seamless digital experience. Such initiatives also remove the identity burden from the customer and kickstart that virtuous cycle. No one anticipated the Covid-19 crisis. But it's opened up the chance to create fairer, more trusting, more transparent digital experiences for everyone—and companies shouldn't pass that up. Related stories: Latest global research: The impact of Covid-19 on consumer behaviors and business strategies Better identifying your customers leads to greater trust Covid-19 as a Gateway to Fraud: Top 5 Global Fraud Trends to Watch Out for in 2020 Podcast: Securing online identity

To keep you informed, we’ve gathered the top global, August headlines covering the latest insights from our experts and recent hot topics. Email attack type: Account takeoverZDNet Japan covers ATO (account takeover) fraud and the variety of techniques used in this attack type to access user accounts and ultimately steal money or sensitive information. In today’s rapidly changing economy, businesses need to get consumer recognition rightDavid Britton, VP of Global Identity & Fraud, shares insights on the disparity between businesses' confidence in recognizing consumers and consumers' lower confidence in this capability by these businesses. EDBI invests in fraud protection fintech VestaThe Straits Times, Singapore, provides an overview of this investment, including details around the increase in online fraud losses recognized across the Asia Pacific (APAC). How banks can balance UX and security amid a pandemicThis Forbes article explores the impact of Covid-19 on consumers, including the critical need for banks to balance consumer protection and good user experience. Stay in the know with our latest insights:

In a recent interview by Irene Ang from Identity Engineering at Microsoft, our own Marika Vilen, SVP of Platform Commercialization, discusses the importance of identity verification solutions and how to seamlessly integrate those across the digital user journey. We are very excited to be working with Microsoft. Identity verification allows organizations to confirm the person they are dealing with online is who they say they are. In light of the ongoing global pandemic, we see an uptick in digital activity and therefore an increased need for organizations to better verify who they are interacting with online, all while minimizing customer friction. Marika Vilen, SVP of Platform Commercialization, Experian Since COVID-19 started, there has been a 20% increase overall in consumer online transaction activities, our recent proprietary research shows. Consumers cite security as the most important factor in their online experience, particularly in regards to managing their financial data. So, what does this digital shift mean for businesses? Identity verification is an important step to take in digital interactions, and some level of friction can invoke a sense of security, but too much for too many customers can have a negative impact on the bottom line. So, while benefits are evident for identity verification, the process must also factor in the impact on the consumer. By taking a holistic approach that integrates across all stages in a customer relationship, customer friction can be minimized – and customer satisfaction and security maximized. We are proud to be working with Microsoft, integrating solutions that provide rich identity data assets and help inform real-time decision making. Related articles: Are traditional online identification methods becoming obsolete?  Q&A: Biometrics as the catalyst for trust in a socially distanced world  Getting to grips with the shifting fraud landscape 

Chris Ryan, Senior Fraud Business Consultant, talks to Nick Zulovich at the Auto Remarketing podcast about the new ways we are seeing fraud surface as the global pandemic evolves. "The pattern of activity that we're seeing that has really attracted my interest is this notion of human farming. A human farm is a pool of paid labor who research information on potential fraud victims using data that's been stolen through data breaches and using information that people publish through social media and other outlets. The objective of a human farmer is to be able to assemble a detailed profile of a potential fraud victim so that the perpetrator can better impersonate them and navigate around potential security measures and other obstacles that would normally be in the way." Chris Ryan, Senior Fraud Business Consultant Why the opportunity for human farming? People are out of work so there's a recruitment opportunity for those in need of an income. There is a flood of people into the online space who might not ordinarily engage digitally. This demographic may not be tech-savvy and maybe more susceptible to fraud methods such as phishing. Resources that typically screen for fraud are suffering due to office closures. The combination of high tech fraud to find potential victims plus skilled human intelligence makes these methods highly effective. New trend amidst new circumstances - the rise of synthetic ID Remote transactions combined with the high-value nature of the auto industry makes it a very attractive prospect to fraudsters. Even though purchases are down, the fraudsters are still active. Synthetic identity fraud, in particular, continues to be attractive because the identities are not real and therefore not suffering from the same downturn as genuine profiles. Listen to the full podcast here. Related articles: Getting to grips with the shifting fraud landscape Infographic: Top Global Fraud Trends 2020 Covid-19 as a Gateway to Fraud: Top 5 Global Fraud Trends to Watch Out for in 2020

In the second part of the Juniper Research and Experian podcast series on online payment fraud, we talk to Nick Maynard from Juniper Research, and David Britton, Vice President of Industry Solutions at Experian, about maturity in artificial intelligence and virtual assistants, and their current ability to respond to current business challenges. "What we're seeing in the consumer space is that AI is powering these virtual assistants and typically Alexa, Siri, Google, are the three big examples. What that's doing is creating an additional channel, it's a new way for users to interact... it mirrors the digital transition and the mobile transition over a number of years."Nick Maynard, Juniper Research "If you consider where artificial intelligence and machine learning are coming together, this is not going to be a big bang launch into market. We're seeing a slow, incremental roll-out." "In the physical world, when we talk about risk and recognition of a consumer, the human to human interaction takes in a tremendous number of variables to ensure that the person you're engaging with is who they claim to be.... in the digital space, that was eliminated overnight, and cosnumers were using a device as a proxy to represent them to another system or set of devices, like bank servers and eCommerce web servers." David Britton, VP of Industry Solutions We also discuss key points around evolving regulatory frameworks, and how they are driving change in identity-based solutions. Listen to the full podcast episode here, and don't forget to listen to What’s new in online payment fraud Part 1: Implications for consumers and businesses if you haven't already.

The first of a two-part series on our Insights in Action podcast, Nick Maynard, Juniper Research, and David Britton, our VP of Industry Solutions for Global Decision Analytics, discuss the latest developments around online payment fraud, and what the implications look like for consumers and businesses. Following the publication of the latest report on online payment fraud from Juniper Research, this episode takes a closer look at how the mobile revolution has created both opportunities and risks when it comes to online payment. "We're seeing a massive digitalization of existing payment methods and retail, which is being driven for a number of reasons. Convenience is a massive driver, and mobile wallets in particular offer a very convenient solution for payments, and they're being used very widely around the world. Other drivers include the ongoing Coronavirus pandemic, which is having a role in driving the increased usage of the online channel."Nick Maynard, Juniper Research Topics covered in part 1 include: The online payment revolution has been led by mobile, with half of the world’s population estimated to use mobile wallets in the next four years. How this transformation is shaping the new online payment experience. ​ Covid-19 has pushed organizations to prioritize their digital transformation. We look at what the implications will be as a result of the rush to digital. With higher convenience, normally comes a higher risk of fraud – what we can expect to see as a part of this shift to mobile. ​ What businesses can do in the short term to mitigate those rising types of fraud, and what their key operational and strategic considerations should be for the future. ​ Listen to the full podcast here, and look out for what’s new in online payment fraud Part 2: How AI and evolving regulation are driving change

In this episode of Insights in Action, David Britton, Vice President of Global Identity & Fraud Solutions, discusses how the Covid-19 pandemic has prompted a massive shift to online for both consumers and businesses, and examines what implications have emerged across the online fraud landscape because of this. "As with any moment like Covid-19, fraudsters are very quick to pick up on possible areas of vulnerability that they can exploit in the market and in the ecosystem. And fraudsters always like to go where the weakest point is in the ecosystem or the weakest link in the chain. So fraudsters are absolutely taking advantage of this."David Britton Phishing is on the rise - fraudsters are impersonating key institutions and their communication channels to manipulate consumers Account takeover fraud - fraudsters are hiding in the traffic peak, posing as consumers using their credentials How businesses can counter the trend: Keeping online fraud at baySecuring our digital identitiesEnsuring a secure, transparent and meaningful treatment of data "The first thing to do is to ensure businesses are pulling together soft signals to define a better risk strategy and authentication strategy because then you can immediately identify if there's an anomolous actor that's trying to impersonate that 'known' good customer."David Britton Listen to this episode of the Insights in Action podcast

The opportunistic nature of hackers means that a global crisis can create the perfect breeding ground for fraudulent activity, meaning businesses and consumers need to be even more vigilant. View Infographic

There’s a digital payments revolution, and mobile is leading the charge. But at what cost does convenience come? Juniper Research’s latest online payment fraud report explores key issues around increased cybercrime and what that means for businesses looking to invest in fraud prevention. View infographic

Digital interactions between businesses and consumers are on the rise. The ability to authenticate and recognize customers provides a convenient and secure experience. However, the latest Global ID & Fraud Report shows a significant disparity in perception between businesses and consumers when it comes to recognition. View Infographic

The interesting thing about fraud is that it’s always changing. Fraudsters are getting smarter, and fraud threats are constantly evolving. Businesses need to be agile and prepared to quickly shift their fraud strategies to stay a step ahead of emerging fraud threats. Traditionally, it's been very difficult for businesses to keep up – every time they see a shift, new fraud signals must be employed, which means looking at new intelligence signals in order to counter that fraud and then moving through a process of procurement and qualification, and then implementation and integration, of fraud services in order to manage the change. With time of the essence, businesses can no longer wait months to react. They need to be able to react in real-time. Biggest threats for 2020 Covid-19 has accelerated online payment transactions, making way for massive cyber security and data fraud concerns among banks and retailers. The idea of doing more digital business, picking up customers digitally, providing a great digital experience is going to be more and more important as we move through the pandemic. Even businesses which traditionally see most of their customer traffic through bricks and mortar might start to see that shift. All of this means that there is more opportunity for fraudsters to be part of the process and to take advantage of that digital interaction. The risk of fraud is going to increase as more people go digital – In part because of sheer numbers, and in part because more of the people who are going online now maybe doing so for the first time. So companies and consumers alike are less prepared for that kind of interaction. Account opening is likely to drop because of Covid-19, but we should expect to see a sharp increase in account take over fraud. There are a lot of people who are being forced to go online now to transact. They may need to turn to ecommerce. They may need to look at online banking to move their banking online. But the point is, they may never have gone online to perform these tasks before. Many vendors have been rapidly rolling out new technology solutions to help banks and retailers manage this new online demand, which has potentially exacerbated digital fragmentation, privacy concerns, and governance expectations. The importance of continuous risking and self-service The speed at which fraudsters adapt to new technology and behavior has always been a problem, but now that we are seeing sudden and unpredictable change, reacting at speed with new fraud strategies has never been more important for businesses. Typically, businesses need to move through validation, contract and then integration in order to do this – making for a long and tedious (not to mention expensive) process. The new release of CrossCore will pre-qualify fraud and intelligence services so that they are pre-integrated meaning that businesses can choose how they want their transactions to be processed, which fraud and identity services they want to use, and they can do so through simple self-service. There is also a feedback loop where reports are generated on how much fraud was detected. Businesses can access their feedback loop almost in real-time and see if their fraud strategies are working or not, and then adjust things as they go. Customer experience when all of your customers are online The ability to passively and strongly identify a customer is a difficult balance to strike when the goal is not to inconvenience the user. And now that most consumers are running their lives online, they demand not only a secure experience, but a convenient one too. To achieve this, a lot of signals about that person are collected. These range from device characteristics and who it is registered with, to behavior on the device and whether these signals match up to the same person. In order to process this data, the signal streams that come in must be considered and then almost in real-time, fraud analytics allow a decision to be made on whether the interaction is with a genuine person or a fraudster. To be able to reduce friction while passively and strongly identifying a person, advanced analytics becomes integral. More about how our latest upgrades can help your business