Banking

Fraud is evolving faster than ever, driven by digitalization, real-time payments and increasingly sophisticated scams. For Warren Jones and his team at Santander Bank, staying ahead requires more than tools. It requires the right partner. The partnership with Santander Bank began nearly a decade ago, during a period of rapid change in the fraud and banking landscape. Since then, the relationship has grown into a long-term collaboration focused on continuous improvement and innovation. Experian products helped Santander address one of its most pressing operational challenges: a high-volume manual review queue for new account applications. While the vast majority of alerts in the queue were fraudulent and ultimately declined, a small percentage represented legitimate customers whose account openings were delayed. This created inefficiencies for staff and a poor first impression of genuine applicants. We worked alongside Santander to tackle this challenge head-on, transforming how applications were reviewed, how fraud was detected and how legitimate customers were approved. In addition to fraud prevention, implementing Experian's Ascend PlatformTM, with its intuitive user experience and robust data environment, has unlocked additional value across the organization. The platform supports multiple use cases, enabling collaboration between fraud and marketing teams to align strategies based on actionable insights. Learn more about our Ascend Platform

For many banks, first-party fraud has become a silent drain on profitability. On paper, it often looks like classic credit risk: an account books, goes delinquent, and ultimately charges off. But a growing share of those early charge-offs is driven by something else entirely: customers who never intended to pay you back. That distinction matters. When first-party fraud is misclassified as credit risk, banks risk overstating credit loss, understating fraud exposure, and missing opportunities to intervene earlier.  In our recent Consumer Banker Association (CBA) partner webinar, “Fraud or Financial Distress? How to Differentiate Fraud and Credit Risk Early,” Experian shared new data and analytics to help fraud, risk and collections leaders see this problem more clearly. This post summarizes key themes from the webinar and points you to the full report and on-demand webinar for deeper insight. Why first-party fraud is a growing issue for banks  Banks are seeing rising early losses, especially in digital channels. But those losses do not always behave like traditional credit deterioration. Several trends are contributing:  More accounts opened and funded digitally  Increased use of synthetic or manipulated identities  Economic pressure on consumers and small businesses  More sophisticated misuse of legitimate credentials  When these patterns are lumped into credit risk, banks can experience:  Inflation of credit loss estimates and reserves  Underinvestment in fraud controls and analytics  Blurred visibility into what is truly driving performance   Treating first-party fraud as a distinct problem is the first step toward solving it.  First-payment default: a clearer view of intent  Traditional credit models are designed to answer, “Can this customer pay?” and “How likely are they to roll into delinquency over time?” They are not designed to answer, “Did this customer ever intend to pay?” To help banks get closer to that question, Experian uses first-payment default (FPD) as a key indicator. At a high level, FPD focuses on accounts that become seriously delinquent early in their lifecycle and do not meaningfully recover.  The principle is straightforward:  A legitimate borrower under stress is more likely to miss payments later, with periods of cure and relapse.  A first-party fraudster is more likely to default quickly and never get back on track.  By focusing on FPD patterns, banks can start to separate cases that look like genuine financial distress from those that are more consistent with deceptive intent.  The full report explains how FPD is defined, how it varies by product, and how it can be used to sharpen bank fraud and credit strategies. Beyond FPD: building a richer fraud signal  FPD alone is not enough to classify first-party fraud. In practice, leading banks are layering FPD with behavioral, application and identity indicators to build a more reliable picture. At a conceptual level, these indicators can include:  Early delinquency and straight-roll behavior  Utilization and credit mix that do not align with stated profile  Unusual income, employment, or application characteristics High-risk channels, devices, or locations at application Patterns of disputes or behaviors that suggest abuse  The power comes from how these signals interact, not from any one data point. The report and webinar walk through how these indicators can be combined into fraud analytics and how they perform across key banking products.  Why it matters across fraud, credit and collections Getting first-party fraud right is not just about fraud loss. It impacts multiple parts of the bank. Fraud strategy Well-defined quantification of first-party fraud helps fraud leaders make the case for investments in identity verification, device intelligence, and other early lifecycle controls, especially in digital account opening and digital lending. Credit risk and capital planning When fraud and credit losses are blended, credit models and reserves can be distorted. Separating first-party fraud provides risk teams a cleaner view of true credit performance and supports better capital planning.  Collections and customer treatment Customers in genuine financial distress need different treatment paths than those who never intended to pay. Better segmentation supports more appropriate outreach, hardship programs, and collections strategies, while reserving firmer actions for abuse.  Executive and board reporting Leadership teams increasingly want to understand what portion of loss is being driven by fraud versus credit. Credible data improves discussions around risk appetite and return on capital.  What leading banks are doing differently  In our work with financial institutions, several common practices have emerged among banks that are getting ahead of first-party fraud: 1. Defining first-party fraud explicitly They establish clear definitions and tracking for first-party fraud across key products instead of leaving it buried in credit loss categories.  2. Embedding FPD segmentation into analytics They use FPD-based views in their monitoring and reporting, particularly in the first 6–12 months on book, to better understand early loss behavior.  3. Unifying fraud and credit decisioning Rather than separate strategies that may conflict, they adopt a more unified decisioning framework that considers both fraud and credit risk when approving accounts, setting limits and managing exposure.  4. Leveraging identity and device data They bring in noncredit data — identity risk, device intelligence, application behavior — to complement traditional credit information and strengthen models.  5. Benchmarking performance against peers They use external benchmarks for first-party fraud loss rates and incident sizes to calibrate their risk posture and investment decisions.  The post is meant as a high-level overview. The real value for your teams will be in the detailed benchmarks, charts and examples in the full report and the discussion in the webinar.  If your teams are asking whether rising early losses are driven by fraud or financial distress, this is the moment to look deeper at first-party fraud.  Download the report: “First-party fraud: The most common culprit”  Explore detailed benchmarks for first-party fraud across banking products, see how first-payment default and other indicators are defined and applied, and review examples you can bring into your own internal discussions.  Download the report Watch the on-demand CBA webinar: “Fraud or Financial Distress? How to Differentiate Fraud and Credit Risk Early”  Hear Experian experts walk through real bank scenarios, FPD analytics and practical steps for integrating first-party fraud intelligence into your fraud, credit, and collections strategies.  Watch the webinar First-party fraud is likely already embedded in your early credit losses. With the right analytics and definitions, banks can uncover the true drivers, reduce hidden fraud exposure, and better support customers facing genuine financial hardship.

Since 1996, The Internal Revenue Service (IRS) has issued more than 27 million individual taxpayer identification numbers (ITINs) –⁠ a 9-digit number used by individuals who are required to file or report taxes in the United States but are not eligible to obtain a Social Security number (SSN). Across the country, ITIN holders are actively contributing to their communities and the U.S. financial system. They pay bills, build businesses, contribute billions in taxes and manage their finances responsibly. Yet despite their clear engagement, many remain underrepresented within traditional lending models.  Lenders have a meaningful opportunity to bridge the gap between intention and impact. By rethinking how ITIN consumers are evaluated and supported, financial institutions can: Reduce barriers that have historically held capable borrowers back Build products that reflect real borrower needs Foster trust and strengthen community relationships Drive sustainable, responsible growth Our latest white paper takes a more holistic look at ITIN consumers, highlighting their credit behaviors, performance patterns and long-term growth potential. The findings reveal a population that is not only financially engaged, but also demonstrating signs of ongoing stability and mobility. A few takeaways include: ITIN holders maintain a lower debt-to-income ratio than SSN consumers. ITIN holders exhibit fewer derogatory accounts (180–⁠400 days past due). After 12 months, 76.9% of ITIN holders remained current on trades, a rate 15% higher than SSN consumers. With deeper insight into this segment, lenders can make more informed, inclusive decisions. Read the full white paper to uncover the trends and opportunities shaping the future of ITIN lending. Download white paper

Growth, risk and the rise of "hidden" business accounts As inflation remains elevated and early signs of labor market cooling emerge, the credit card landscape is entering its next phase. Over the past few weeks, policy actions and discussions around potential interest-rate caps have driven increased uncertainty across the credit card industry and broader global markets. Lenders face a careful balancing act: capturing growth opportunities while maintaining disciplined risk oversight. Our second annual State of Credit Cards Report explores the macroeconomic forces influencing the market, key shifts in originations and delinquency trends, and lender mix. New this year, the report also digs into an often‑overlooked segment: business accounts hidden inside consumer credit card portfolios. Additionally, the report offers actionable strategies to help lenders segment risk and drive disciplined growth more effectively. Key insights include: 30+ DPD delinquency rates remained above pre-pandemic levels in 2025, underscoring the need for disciplined asset‑quality monitoring. Fintechs continue to gain ground, posting a 71% YOY increase in account originations.  Business accounts masked in the consumer credit card universe represent roughly 14% of balances and are more than 50% larger than the business card universe — a material segment with distinct risk and profitability dynamics that many lenders are not explicitly managing today. The report also outlines practical strategies to: Identify and segment business behavior within consumer portfolios. Align underwriting and account management with actual usage patterns. Capture targeted growth while protecting long‑term portfolio performance. Ready to dive deeper? Download the full 2026 State of Credit Cards Report to uncover insights that can help your organization manage risk more precisely and grow with confidence. Download report

Learn how customer engagement in banking is key to building loyalty and earning long-term trust. Read more!

Improving customer retention is a sensible business practice, and it's an essential banking growth strategy for long-term success.

Here’s a snippet from our open banking webinar’s Q&A session with Ashley Knight, Senior Vice President of Product Management.

Open Banking use cases are extensive and will continue to expand as access to permissioned data becomes more common. Learn more.

As part of banks’ anti-money laundering (AML) programs, KYC in banking can help stop corruption, money laundering and terrorist financing. Creating and maintaining KYC programs is also important for regulatory compliance, reputation management and fraud prevention.  The three components of KYC in banking programs Banks can largely determine how to set up their KYC and AML programs within the applicable regulatory guidelines. In the United States, KYC needs to happen when banks initially onboard a new customer. But it’s not a one-and-done event—ongoing customer and transaction monitoring is also important.  1. Customer Identification Program (CIP) Creating a robust Customer Identification Program (CIP) is an essential part of KYC. At a minimum, a bank’s CIP requires it to collect the following information from new customers: Name Date of birth Address Identification number, such as a Social Security number (SSN) or Employer Identification Number (EIN) Banks' CIPs also have to use risk-based procedures to verify customers’ identities and form a reasonable belief that they know the customer's true identity.1 This might involve comparing the information from the application to the customer’s government-issued ID, other identifying documents and authoritative data sources, such as credit bureau databases. Additionally, the bank's CIP will govern how the bank:  Retains the customer’s identifying information Compares customer to government lists  Provides customers with adequate notices Banks can create CIPs that meet all the requirements in various ways, and many use third-party solutions to quickly collect data, detect forged or falsified documents and verify the provided information.  2. Customer due diligence (CDD)  CIP and CDD overlap, but the CIP primarily verifies a customer’s identity while customer due diligence (CDD) helps banks understand the risk that each customer poses. To do this, banks try to understand what various types of customers do, what those customers’ normal banking activity looks like, and in contrast, what could be unusual or suspicious activity.  Financial institutions can use risk ratings and scores to evaluate customers and then use simplified, standard or enhanced due diligence (EDD) processes based on the results. For example, customers who might pose a greater risk of laundering money or financing terrorism may need to undergo additional screenings and clarify the source of their funds. 3. Ongoing monitoring Ongoing or continuous monitoring of customers’ identities and transactions is also important for staying compliant with AML regulations and stopping fraud.  The monitoring can help banks spot a significant change in the identity of the customer, beneficial owner or account, which may require a new KYC check. Unusual transactions can also be a sign of money laundering or fraud, and they may require the bank to file a suspicious activity report (SAR). Why is KYC important in banking? Understanding and implementing KYC in banking processes can be important for several reasons:  Regulatory compliance: Although the specific laws and rules can vary by country or region, many banks are required to have AML procedures, including KYC. The fines for violating AML regulations can be in the hundreds of millions— a few banks have been fined over $1 billion for lax AML enforcement and sanctions breaching. Reputation management: In some cases, enforcement actions and fines were headline news. Banks that don’t have robust KYC procedures in place risk losing their customers' trust and respect.  Fraud prevention: In addition to the regulatory requirements, KYC policies and systems can also work alongside fraud management solutions for banks. Identity verification at onboarding can help banks identify synthetic identities attempting to open money mule accounts or take out loans. Ongoing monitoring can also be important for identifying long-term fraud schemes and large fraud rings.  KYC in a digital-first world Modernizing KYC in banking is a key part of financial institutions’ digital transformation efforts. Part of that journey is updating the systems and tools in place to meet the expectations of customers and regulators. Experian’s 2025 U.S. Identity and Fraud Report shows four in 10 consumers considered abandoning a new account setup midway through the process – rising to 50% among high-income earners – highlighting growing expectations for seamless digital experiences. The survey wasn’t specific to financial services, but friction could be a problem for banks wanting to attract new account holders. Just as access to additional data sources and machine learning help automate underwriting, financial institutions can use technological advances to add an appropriate amount of friction based on various risk signals. Some of these can be run in the background, such as an electronic Consent Based Social Security Number Verification (eCBSV) check to verify the customer’s name, SSN and date of birth match the Social Security Administration’s records. Others may require more customer involvement, such as taking a selfie that’s then compared to the image on their photo ID — Experian CrossCore® Doc Capture enables this type of verification.  Experian is a leader in identity and data management  Our identity verification solutions use proprietary and third-party data to help banks manage their KYC procedures, including identity verification and Customer Identification Programs (CIP). As a global leader in identity management and fraud prevention, we combine advanced analytics, rich data assets, and innovative technology to deliver secure, seamless identity experiences. Our comprehensive identity ecosystem enables organizations to confidently verify, authenticate and manage customer identities across the lifecycle—reducing fraud risk, improving compliance and enhancing the customer experience.By bundling identity verification with fraud assessment, banks can stop fraudsters while quickly resolving identity discrepancies. The automated processes also allow you to offer a low-friction identity verification experience and use step-up authentications as needed.  Explore identity solutions

Digital transformation in banking reshapes processes, boosts innovation, and delivers personalized experiences to modern financial consumers.

To drive competitive growth and customer retention, banks must find innovative ways to elevate the banking customer experience.