Fraud & Identity Management

If you’ve seen an uptick in photos of friends and celebrities looking older with wrinkles on your social media feeds, you’re not alone. A new free photo editor has taken the internet by a storm, featuring an AI-powered image-altering application that allows users to see their “future self.” All you have to do is upload a single photo (or few) from your camera roll to be enhanced. While this may seem like harmless fun, the app is now making headlines over increased privacy concerns about what occurs behind the scenes once users submit their selfies. Red flags were raised when multiple alleged negative implications were connected to the app – including the app’s ownership and the potential risk that the app downloaded a user’s entire photo album onto their database. In fact, the privacy concerns also prompted Democratic Party officials to implore federal agencies, including the FBI, “to look into the potential national security and privacy risks the phone app poses to the United States.” Since then, the app’s creators have addressed these concerns, stating most of the photo processing occurs in the cloud and most photos are deleted within 48 hours. Additionally, the only photos uploaded are ones that have been personally submitted by the user. Regardless, a database of user-submitted photos could be seen as a goldmine to fraudsters. In a time where personal and biometric data (including facial recognition) are some of the key ways to validate security, it’s important for consumers to be aware of how and where they’re sharing their data, whether it’s for an age-progression photo app, or their financial accounts. Consumers, businesses, financial institutions – everyone – should exhibit caution and take measures to ensure personal information remains secure and is not being used for nefarious reasons. While consumers may be aware that businesses are collecting data, companies should take steps to form digital trust with transparency. This could be achieved by: Educating consumers on how their data is being used Effectively communicating privacy policies and service terms more concisely Helping consumers feel in control of their information To learn more about research that indicates a shift to advanced authentication methods (including biometrics), fraud trends and how to combat them, download our e-book. Download Now

Friend or foe? Sophisticated criminals put a great deal of effort into creating convincing, verifiable personas (AKA synthetic identities). Once the fictional customer has embedded itself in your business, everything from the acquisition of financial instruments to healthcare benefits, utility services, and tax filings and refunds become vulnerable to synthetic identity fraud. Information attached to synthetic IDs can run several levels deep and be so complete that it includes public record data, credit information, documentary evidence and social media profiles that may even contain photo sets and historical details intended to deceive—all complicating your efforts to identify these fake customers before you do business with them. See real-world examples of how synthetic identity fraud is souring various markets – from auto and healthcare to financial services and public sector – in our tip sheet, Four common synthetic scenarios. Stopping synthetic ID fraud — at the door and thereafter. There are efforts underway in the market to collectively improve your ability to identify, shut down and prevent synthetic identities from entering your portfolio. This overall trend is great news for the future, but there are also near-term solutions you can apply to protect your business starting now. While it’s important to identify synthetic identities when they knock on your door, it’s just as important to conduct regular portfolio checkups to prevent negative impacts to your collections efforts. Every circumstance has its own unique parameters, but the overarching steps necessary to mitigate fraud from synthetic IDs remain the same: Identify current and near-term exposure using targeted segmentation analysis. Apply technology that alerts you when identity data doesn’t add up. Differentiate fraudulent identities from those simply based on bad data. Review front- and back-end screening procedures until they satisfy best practices. Achieve a “single view of the customer” for all account holders across access channels—online, mobile, call center and face-to-face. The right tools for the job. In addition to the steps mentioned above, stopping these fake customers from entering and then stealing from your organization isn’t easy—but with the right tools and strategies, it is possible. Here are a few of our top recommendations: Forensics Isolate and segment identities based on signals received during early account pathing, from both individuals and their device. For example, even sophisticated fraud networks can’t mimic natural per-device user interaction because these organizations work with hundreds or thousands of synthetic identities using just a few devices. It’s highly unlikely that multiple geographically separate account holders would share the same physical device. High-risk fraud scores Not all synthetic identity fraud manifests the same way. Using sophisticated logic and unique combinations of data, a high-risk fraud score looks at a consumer’s credit behavior and credit relationships over time to uncover previously undetectable risk. These scores are especially successful in detecting identities that are products of synthetic identity farms. And by targeting a specific data set and relationships, you can maintain a frictionless customer experience and reduce false positives. Analytics Use a solution that develops models of bad applicant behavior, then compares and scores your portfolio against these models. There isn’t a single rule for detecting fraudulent identities, but you can develop an informed set of rules and targeted models with the right service partner. Cross-referencing models designed to isolate high-risk identity theft cases, first-party or true-name fraud schemes, and synthetic identities can be accomplished in a decisioning strategy or via a custom model that incorporates the aggregate scores and attributes holistically. Synthetic identity detection rules These specialized rules consist of numerous conditions that evaluate a broad selection of consumer behaviors. When they occur in specific combinations, these behaviors indicate synthetic identity fraud. This broad-based approach provides a comprehensive evaluation of an identity to more effectively determine if it’s fabricated. It also helps reduce the incidence of inaccurately associating a real identity with a fictitious one, providing a better customer experience. Work streams Address synthetic identities confidently by applying analytics to work streams throughout the customer life cycle: Credit risk assessment Know Your Customer/Customer Identification Program checks Risk-based identity proofing and authentication Existing account management Manual reviews, investigations and charge-offs/collections activities Learn more about these tools and others that can help you mitigate synthetic identities in our white paper, Synthetic identities: getting real with customers. If your organization is like most, detecting SIDs hasn't been your top priority. So, there's no time to waste in preventing them from entering your portfolio. Criminals are highly motivated to innovate their approaches as rapidly as possible, and it’s important to implement a solution that addresses the continued rise of synthetic IDs from multiple engagement points. With the right set of analytics and decisioning tools, you can reduce exposure to fraud and losses stemming from synthetic identity attacks from the beginning and across the customer life cycle. We can help you detect and mitigate these fake customers before they become delinquent. Learn more

  You can do everything you can to prepare for the unexpected. But similar to how any first-time parent feels… you might need some help. Call in the grandparents! Experian has extensive expertise and has been around for a long time in the industry, but unlike your traditional grandparents, Experian continuously innovates, researches trends, and validates best practices in fraud and identity verification. That’s why we explored two prominent fraud reports, Javelin’s 2019 Identity Fraud Study: Fraudsters Seek New Targets and Victims Bear the Brunt and Experian’s 2019 Global Identity and Fraud Report — Consumer trust: Building meaningful relationships online, to help you identify and respond to new trends surrounding fraud. What we found – and what you need to know – is there are trends, technology and tactics that can help and hinder your fraud-prevention efforts. Consider the many digital channels available today. A full 91 percent of consumers transacted online in 2018. This presents a great opportunity for businesses to serve and develop relationships with customers. It also presents a great opportunity for fraudsters as well – as almost half of consumers have experienced a fraudulent online event. Since the threat of fraud is not impacting customers’ willingness to transact online, businesses are held responsible for adapting and evolving to not only protect their customers, but to secure their bottom line. This becomes increasingly important as fraudsters continue to target and expose vulnerabilities across inexperienced lines of businesses. Or, how about passwords. Research has shown that both businesses and consumers have greater confidence in biometrics, but neither is ready to stop using passwords. The continued reliance on traditional authentication methods is a delicate balance between security, trust and convenience. Passwords provide both authentication and consumer confidence in the online experience. It also adds friction to the user experience – and sometimes aggravation when passwords are forgotten. Advanced methods, like physical and behavioral biometrics and device intelligence, are gaining user confidence by both businesses and consumers. But a completely frictionless authentication experience can leave consumers doubting the safeness of their transaction. As you respond and adapt to our ever-evolving world, we encourage you to build and strengthen a trusted relationship with your customers through transparency. Consumers know that businesses are collection data about them. When a business is transparent about the use of that data, digital trust and consumer confidence soars. Through a stronger relationship, customers are more willing to accept friction and need fewer signs of security. Learn more about these and other trends, technology and tactics that can help and hinder your authentication efforts in our new E-book, Upcoming fraud trends and how to combat them.

Day 2 at this year’s Vision conference was fueled with new technology and inspiration. The morning session opened with Robert Boxberger, Experian President, Decision Analytics, and also featured two live demos, one on Experian’s solution for the upcoming CECL compliance deadline and the second for mobile credit, including two use cases on instant issuance and lead generation, which has resulted in a 28% conversion rate of hot leads for one of Experian’s marquee clients. Keynote Speaker: Aimée Mullins "Get comfortable with the uncomfortable" was just one of the mantras shared on Tuesday morning by Aimée Mullins, an actor, Olympian, TEDTalk speaker, and one of the youngest honorees to be inducted into the National Women’s Hall of Fame, among many other accomplishments. “It is our uniqueness that’s our greatest asset that we can leverage for our greatest strength,” said Mullins during her keynote centered on achieving the “impossible.” As a bi-lateral amputee (or “double BK” also known as double below-the-knee amputee, as she referenced), Mullins had doctors and experts tell her and her parents what she would not be able to do. Instead, she encouraged Tuesday’s audience to never stop thinking like a child, to use their curiosity to find new ways where you want to go, and to practice curiosity like a sport to keep from getting comfortable, and therefore static. “It made my not knowing what I can do so much more powerful than an expert's presumption of what he thought I could do,” she said. Session Highlights – Day 2 Consumer Trust What engenders trust as consumers? And what does it take to build online trust? With 51% of new account fraud victims personally knowing the perpetrator and 3.4 billion total losses from fraudulent account openings (Javelin Feb 2019), there are five key components to building trust: digital adoption, transparency, fraud management, recognition and authentication. Today’s consumers want to use the digital channel, have both security and ease of access, be recognized, know how their personal information is being used, and engage and trust with biometrics. Artificial Intelligence – Chat Bots and Beyond According to Gartner, “'Conversational AI-first' will supersede ‘cloud-first,’ ‘mobile first’ as the most important high-level imperative for the next 10 years.” As evidenced by Google Duplex’s realistic conversations with humans, including the use of “uh” and “um,” conversational AI is positioned to redefine the next generation of human interface, aimed at achieving better customer satisfaction and elevate the customer relationship. Marketing Analytics The marketing analytics landscape is changing. Today’s marketing problems – including the always limited budget and need to produce greater ROI – require tactical strategies to target the right consumers. Enter Experian’s AscendTM marketing platform. Leveraging this tool, including its neural networks that were demonstrated Monday morning, helps gain new insights into consumer behavior. Fraud in the Digital Wild West A panel discussion featuring representatives from Merchant Risk Council, USAA and Alliance Data compared fighting fraud to herding cats. Challenges discussed included the ongoing struggle to find balance between limiting friction during the authentication process, while also protecting customers, as well as fraudsters’ tendencies to tap into victims’ emotions and curiosity (think phishing schemes). As one of the panelists offered as a piece of advice, “Fraudsters share best practices, so should we.” Visibility for the Invisibles People are more than the sum of their parts. The traditional credit score may show a consumer’s reputation, but layering trended and alternative data sets adds their character. Not only can trended data and alternative credit data – including leveraging education attributes – make invisible consumers visible, they can also reveal that a consumer with a presumably superlative credit score is actually a “credit zombie.” These data sets enable the opportunity to create first chances, drive second chances and re-evaluate risk, while also driving a strong growth strategy. CECL After reviewing the basics of CECL and the upcoming deadlines (ranging from Q1 2020 to Q1 2022), a review of CECL compliance challenges and potential product changes preceded a modeling techniques case study and a list of key impacts to businesses. Those impacts include: product profitability, loss forecasting methodology, data management and processes and capital ratios. Experian’s CECL forecasting solution leverages Experian’s extensive historical data and Ascend Analytical Sandbox. Using a best practice modeling pipeline to improve efficiency and reduce operational risks, the solution combines advanced machine learning, traditional model techniques and modeling experience to improve performance and reduce risk of overfitting. Keynote Speaker: Kobe Bryant Kobe Bryant closed out the day with stories from his highly-decorated 20-year career with the Los Angeles Lakers, some tips on trash talk and lessons in leadership. “I had to figure out how to be undeniable,” Bryant said, on competing for minutes at the start of his career. In addition to his basketball legacy, including wining five NBA championships, being named an NBA MVP, a two-time NBA Finals MVP and winning two Olympic gold medals, Bryant also launched the Kobe and Vanessa Bryant Family Foundation, hosts the Kobe Academy and has formed Kobe Inc. He’s a storyteller, an Oscar winner, and his name has become synonymous with standing for uncompromising excellence. How to be successful? “Make sure you have the right people on the team,” Bryant said. “Passionate. Borderline obsessive.” One of his key takeaways from his basketball career that translates to his leadership on and off the court happened when his pre-game and game time thinking shifted from internal to external. “You have to put yourself 2nd, 3rd, 4th…you have to put the team first,” Bryant said.   For more coverage, follow #ExperianVision on Twitter or check the Experian Insights LinkedIn page.  

Experian’s 38th annual Vision Conference kicks off on Sunday, May 5 in San Antonio, Texas. The sold-out thought leadership conference, is known for driving discussions on the industry’s hard-hitting topics as well as introducing the latest and greatest in technology, innovation and data science. “For 38 years, Experian’s Vision Conference has connected business leaders to new ideas and solutions through cutting edge data and insights. Our goal is to power opportunities for you to target new markets, grow existing customer bases, improve response rates, reduce fraud and increase profits by using our data, analytics and technology. The intimate setting of the conference allows for unique networking opportunities with the industry’s most sought-after thought leaders,” said Klaudette Christensen, Experian’s Chief Operations Officer. A few spotlight sessions include: Several sessions about machine learning and artificial intelligence, highlighting opportunities related to best practices, underwriting and fraud detection A deep dive into the modern mortgage, leveraging insights on home equity and how to leverage data and analytics to redefine the process as it’s known today Sessions on credit delinquency, collections and the Great Recession Marketing analytics and the latest releases from Experian’s Ascend Platform Sessions on advanced analytics and integrated decisioning as they relate to commercial and consumer insights The event, which runs through Tuesday evening, continues its tradition of featuring several noteworthy keynote speakers. On Monday, Gary D. Cohn, American business leader, philanthropist and former Director of the U.S. National Economic Council, will kick off the event. On Tuesday, Aimée Mullins will take the stage discussing what is “possible” by drawing from her experiences as a record-breaking Olympic athlete, model and actress. The closing keynote will feature five-time NBA Champion and two-time Olympic Gold Medalist, Kobe Bryant. The event will also include a Tech Showcase, featuring hands-on demos for attendees to experience. Stay tuned for additional highlights and insights on our social media platforms throughout the course of the conference. Follow Experian Insights on Twitter and LinkedIn and check out #ExperianVision.

For most businesses, building the best online experience for consumers requires a balance between security and convenience. But the challenge has always been finding a happy medium between the two – offering enough security that won’t get in the way of convenience and vice versa. In the past, it was always believed that one would always come at the expense of the other. But technology and innovation is changing how businesses approach security and is allowing them to give the maximum potential of both. Consumers want security AND convenience Consumers consider security and convenience as the foundation of their online experience. Findings from our 2019 Global Identity and Fraud Report revealed approximately 74 percent of consumers ranked security as the most important part of their online experience, followed by convenience. In other words, they expect businesses to provide them with both. We see this with how consumers are typically using the same security information each time they open a new digital account – out of convenience. But if one account is compromised, the consumer becomes vulnerable to possible fraudulent activity. With today’s technology, businesses can give consumers an easier and more secure way to access their digital accounts. Creating the optimal online experience More security usually meant creating more passwords, answering more security questions, completing CAPTCHA tests, etc. While consumers are willing to work through these friction-inducing methods to complete a transaction or access an account, it’s not always the most convenient process. Advanced data and technology has opened doors for new authentication methods, such as physical and behavioral biometrics, digital tokenization, device intelligence and machine learning, to maximize the potential for businesses to provide the best online experience possible. In fact, consumers have expressed greater confidence in businesses that implement these advanced security methods. Rates of consumer confidence in passwords was only 44 percent, compared to a 74 percent rate of consumer confidence in physical biometrics. Consumers are willing to embrace the latest security technology because it provides the security and convenience they want from businesses. While traditional forms of security were sufficient, advanced authentication methods have proven to be more reliable forms of security that consumers trust and can improve their online experience. The optimal online experience is a balance between security and convenience. Innovative technologies and data are helping businesses protect people’s identities and provide consumers with an improved online experience.  

Be warned. I’m a Philadelphia sports fan, and even after 13 months, I still relish in the only Super Bowl victory I’ve ever known as a fan. Having spent more than two decades in fraud prevention, I find that Super Bowl LII is coalescing in my mind with fraud prevention and lessons in defense more and more. Let me explain: It’s fourth-down-and-goal from the one-yard line. With less than a minute on the clock in the first half, the Eagles lead, 15 to 12. The easy option is to kick the field goal, take the three points and come back with a six-point advantage. Instead of sending out the kicking squad, the Eagles offense stays on the field to go for a touchdown. Broadcaster Cris Collingsworth memorably says, “Are they really going to go for this? You have to take the three!” On the other side are the New England Patriots, winners of two of the last three Super Bowls. Love them or hate them, the Patriots under coach Bill Belichick are more likely than any team in league history to prevent the Eagles from scoring at this moment. After the offense sets up, quarterback Nick Foles walks away from his position in the backfield to shout instructions to his offensive line. The Patriots are licking their chops. The play starts, and the ball is snapped — not to Foles as everyone expects, but to running back Corey Clement. Clement takes two steps to his left and tosses the ball the tight end Trey Burton, who’s running in the opposite direction. Meanwhile, Foles pauses as if he’s not part of the play, then trots lazily toward the end zone. Burton lobs a pass over pursuing defenders into Foles’ outstretched hands. This is the “Philly Special” — touchdown! Let me break this down: A third-string rookie running back takes the snap, makes a perfect toss — on the run — to an undrafted tight end. The tight end, who hasn’t thrown a pass in a game since college, then throws a touchdown pass to a backup quarterback who hasn’t caught a ball in any athletic event since he played basketball in high school. A play that has never been run by the Eagles, led by a coach who was criticized as the worst in pro football just a year before, is perfectly executed under the biggest spotlight against the most dominant team in NFL history. So what does this have to do with fraud? There’s currently an outbreak of breach-fueled credential stuffing. In the past couple of months, billions of usernames and passwords stolen in various high-profile data breaches have been compiled and made available to criminals in data sets described as “Collections 1 through 5.” Criminals acquire credentials in large numbers and attack websites by attempting to login with each set — effectively “stuffing” the server with login requests. Based on consumer propensity to reuse login credentials, the criminals succeed and get access to a customer account between 1 in 1,000 and 1 in 50 attempts. Using readily available tools, basic information like IP address and browser version are easy enough to alter/conceal making the attack harder to detect. Credential stuffing is like the Philly Special: Credential stuffing doesn’t require a group of elite all-stars. Like the Eagles’ players with relatively little experience executing their roles in the Philly Special, criminals with some computer skills, some initiative and the guts to try credential stuffing can score. The best-prepared defense isn’t always enough. The Patriots surely did their homework. They set up their defense to stop what they expected the Eagles to do based on extensive research. They knew the threats posed by every Eagle on the field. They knew what the Eagles’ coaches had done in similar circumstances throughout their careers. The defense wasn’t guessing. They were as prepared as they could have been. It’s the second point that worries me when I think of credential stuffing. Consumers reuse online credentials with alarming frequency, so a stolen set of credentials is likely to work across multiple organizations, possibly even yours. On top of that, traditional device recognition like cookies can’t identify and stop today’s sophisticated fraudsters. The best-prepared organizations feel great about their ability to stop the threats they’re aware of. Once they’ve seen a scheme, they make investments, improve their defenses, and position their players to recognize a risk and stop it. Sometimes past expertise won’t stop the play you can’t see coming.  

Although half of businesses globally report an increase in fraud management over the past 12 months, many still experience fraud losses and attacks. To help address these challenges, Experian held its first-ever Fintech Fraud & Identity Meetup on February 5 in San Francisco, Calif. The half-day event was aimed at offering insights on the main business drivers of fraud, market trends, challenges and technology advancements that impact identity management and fraud risk strategy operations. “We understand the digital landscape is changing – inevitably, with technology enhancements come increased fraud risk for businesses operating in the online space,” said Jon Bailey, Experian’s Vice President of Fintech. “Our focus today is on fraud and identity, and providing our fintech customers with the tools and insights needed to grow and thrive.” The meetup was attended by number of large fintech companies with services spanning across a broad spectrum of fintech offerings. To kick off the event, Tony Hadley, Experian’s Senior Vice President of Government & Regulatory Affairs, provided an update on the latest regulatory news and trends impacting data and the fintech space. Next followed a fraud and identity expert panel, which engaged seasoned professionals in an in-depth discussion around two main themes 1) fraud trends and risk mitigation; and 2) customer experience, convenience, and trust. Expert panelists included: David Britton, Experian’s Vice President of Industry Solutions; Travis Jarae, One World Identity’s Founder & CEO; George Kurtyka, Joust’s Co-Founder & COO; and Filip Verley, Airbnb’s Product Manager. “The pace of fraud is so fast, by the time companies implement solutions, the shelf-life may already be old,” Britton said. “That is the crux – how to stay ahead. The goal is to future-proof your fraud strategy and capabilities.” At the close of the expert panel, Kathleen Peters, Experian’s Senior Vice President Head of Fraud and Identity, demoed Experian’s CrossCore™ solution – the first smart, open, plug-and-play platform for fraud and identity services. Peters began by stating, “Fraud is constant. Over 60% of businesses report an increase in fraud-related losses over the past year, with the US leading the greatest level of concern. The best way to mitigate risk is to create a layered approach; that’s why Experian invented CrossCore.” With the sophistication of fraudsters, it’s no surprise that many businesses are not confident with the effectiveness of their fraud strategy. Learn more about how you can stay one step ahead of fraudsters and position yourself for success in the ever-changing fraud landscape; download Experian’s 2019 Global Identity and Fraud Report here. For an inside look at Experian’s Fintech Fraud & Identity Meetup, watch our video below.

How can fintech companies ensure they’re one step ahead of fraudsters? Kathleen Peters discusses how fintechs can prepare for success in fraud prevention.

2019 is here — with new technology, new regulations and new opportunities on the docket. What does that mean for the financial services space? Here are the five trends you should keep your eye on and how these affect your credit universe.   1. Credit access is at an all-time high With 121 million Americans categorized as credit-challenged (subprime scores and a thin or nonexistent credit file) and 45 million considered credit-invisible (no credit history), the credit access many consumers take for granted has appeared elusive to others. Until now. The recent launch of Experian BoostTM empowers consumers to improve their credit instantly using payment history from their utility and phone bills, giving them more control over their credit scores and making them more visible to lenders and financial institutions. This means more opportunities for more people. Coupled with alternative credit data, which includes alternative financial services data, rental payments, and full-file public records, lenders and financial institutions can see a whole new universe. In 2019, inclusion is key when it comes to universe expansion goals. Both alternative credit and consumer-permissioned data will continue to be an important part of the conversation.   2. Machine learning for the masses The financial services industry has long been notorious for being founded on arguably antiquated systems and steeped in compliance and regulations. But the industry’s recent speed of disruption, including drastic changes fueled by technology and innovation, may suggest a changing of the guard. Digital transformation is an industry hot topic, but defining what that is — and navigating legacy systems — can be challenging. Successfully integrating innovation is the convergence at the center of the Venn diagram of strategy, technology and operations. The key, according to Deloitte, is getting “a better handle on data to extract the greatest value from technology investments.” How do you get the most value? Risk managers need big data, machine learning and artificial intelligence strategies to deliver market insights and risk evaluation. Between the difficulty of leveraging data sets and significant investment in time and money, it’s impossible for many to justify. To combat this challenge, the availability and access to an analytical sandbox (which contains depersonalized consumer data and comparative industry intel) is crucial to better serve clients and act on opportunities in lenders’ credit universe and beyond. “Making information analysis easily accessible also creates distinct competitive advantages,” said Vijay Mehta, Chief Innovation Officer for Experian’s Consumer Information Services, in a recent article for BAI Banking Strategies. “Identifying shifts in markets, changes in regulations or unexpected demand allows for quick course corrections. Tightening the analytic life cycle permits organizations to reach new markets and quickly respond to competitor moves.” This year is about meaningful metrics for action, not just data visualization.   3. How to fit into the digital-first ecosystem With so many things available on demand, the need for instant gratification continues to skyrocket. It’s no secret that the financial services industry needs to compete for attention across consumers’ multiple screens and hours of screen time. What’s in the queue for 2019? Personalization, digitalization and monetization. Consumers’ top banking priorities include customized solutions, omnichannel experience improvement and enhancing the mobile channel (as in, can we “Amazonize” everything?). Financial services leaders’ priorities include some of the same things, such as enhancing the mobile channel and delivering options to customize consumer solutions (BAI Banking Strategies). From geolocation targeting to microinteractions in the user experience journey to leveraging new strategies and consumer data to send personalized credit offers, there’s no shortage of need for consumer hyper-relevance. 33 percent of consumers who abandon business relationships do so because personalization is lacking, according to Accenture data for The Financial Brand. This expectation spans all channels, emphasizing the need for a seamless experience across all devices.   4. Keeping fraudsters out Many IT professionals regard biometric authentication as the most secure authentication method currently available. We see this technology on our personal devices, and many companies have implemented it as well. Biometric hacking is among the predicted threats for 2019, according to Experian’s Data Breach Industry Forecast, released last month. “Sensors can be manipulated and spoofed or deteriorate with too much use. ... Expect hackers to take advantage of not only the flaws found in biometric authentication hardware and devices, but also the collection and storage of data,” according to the report.   5. Regulatory changes and continued trends  Under the Trump Administration, the regulatory front has been relatively quiet. But according to the Wall Street Journal, as Democrats gain control of the House of Representatives, lawmakers may be setting their sights on the financial services industry — specifically on legislation in response to the credit data breach in 2017. The Democratic Party leadership has indicated that the House Financial Services Committee will be focused on protecting consumers and investors, preserving sector stability, and encouraging responsible innovation in financial technology, according to Deloitte. In other news, the focus on improving accuracy in data reporting, transparency for consumers in credit scoring and other automated decisions can be expected to continue. Consumer compliance, and specifically the fair and responsible treatment of consumers, will remain a top priority.   For all your needs in 2019 and beyond, Experian has you covered. Learn more

It’s the holiday season — time for jingle bells, lighting candles, shopping sprees and credit card fraud. But we’re prepared. Our risk analyst team constantly monitors our FraudNet solution performance to identify anomalies our clients experience as millions of transactions occur this month. At its core, FraudNet analyzes incoming events to determine the risk level and to allow legitimate events to process without causing frustrating friction for legitimate customers. That ensures our clients can recognize good customers across digital devices and channels while reducing fraud attacks and the need for internal manual reviews. But what happens when things don’t go as planned? Here’s a recent example. One of our banking clients noticed an abnormally high investigation queue after a routine risk engine tuning. Our risk analyst team looked further into the attacks to determine the cause and assess whether it was a tuning issue or a true fraud attack. After an initial analysis, the team learned that the events shared many of the same characteristics: Came from the same geo location that has been seen in previous attacks on clients Showed suspicious device and browser characteristics that were recognized by Experian’s device identification technology Identified suspicious patterns that have been observed in other recent attacks on banks The conclusion was that it wasn’t a mistake. FraudNet had correctly identified these transactions as suspicious. Experian® then worked with our client and recommended a strategy to ensure this attack was appropriately managed. This example highlights the power of device identification technology as a mechanism to detect emerging fraud threats, as well as link analysis tools and the expertise of a highly trained fraud analyst to uncover suspicious events that might otherwise go unnoticed. In addition to proprietary device intelligence capabilities, our clients take advantage of a suite of capabilities that can further enhance a seamless authentication experience for legitimate customers while increasing fraud detection for bad actors. Using advanced analytics, we can detect patterns and anomalies that may indicate a fraudulent identity is being used. Additionally, through our CrossCore® platform businesses can leverage advanced innovation, such as physical and behavioral biometrics (facial recognition, how a person holds a phone, mouse movements, data entry style), email verification (email tenure, reported fraud on email identities), document verification (autofill, liveliness detection) and digital behavior risk indicators (transaction behavior, transaction velocity), to further advance their existing risk mitigation strategies and efficacy.   With expanding partnerships and capabilities offered via Experian’s CrossCore platform, in conjunction with consultative industry expertise, businesses can be more confident during the authentication process to ensure a superb, frictionless customer experience without compromising security.

As our society becomes ever more dependent on everything mobile, criminals are continually searching for and exploiting weaknesses in the digital ecosystem, causing significant harm to consumers, businesses and the economy.  In fact, according to our 2018 Global Fraud & Identity Report, 72 percent of business executives are more concerned than ever about the impact of fraud. Yet, despite the awareness and concern, 54 percent of businesses are only “somewhat confident” in their ability to detect fraud. That needs to change, and it needs to change right away.  Our industry has thrived by providing products and services that root out bad transactions and detect fraud with minimal consumer friction. We continue to innovate new ways to authenticate consumers, apply new cloud technologies, machine learning, self-service portals and biometrics. Yet, the fraud issue still exists. It hasn’t gone away. How do we provide effective means to prevent fraud without inconveniencing everyone in the process? That’s the conundrum. Unfortunately, a silver bullet doesn’t exist. As much as we would like to build a system that can detect all fraud, eliminate all consumer friction, we can’t. We’re not there yet. As long as money has changed hands, as long as there are opportunities to steal, criminals will find the weak points – the soft spots.  That said, we are making significant progress. Advances in technology and innovation help us bring new solutions to market more quickly, with more predictive power than ever, and the ability to help clients to turn  these services on in days and weeks. So, what is Experian doing? We’ve been in the business of fraud detection and identity verification for more than 30 years. We’ve seen fraud patterns evolve over time, and our product portfolio evolves in lock-step to counter the newest fraud vectors. Synthetic identity fraud, loan stacking, counterfeit, identity theft; the specific fraud attacks may change but our solution stack counters each of those threats. We are on a continuous innovation path, and we need to be. Our consumer and small business databases are unmatched in the industry for quality and coverage, and that is an invaluable asset in the fight against fraud. It used to be that knowing something about a person was the same as authenticating that same person. That’s just not the case today. But, just because I may not be the only person who knows where I live, doesn’t mean that identity information is obsolete. It is incredibly valuable, just in different ways today. And that’s where our scientists come into their own, providing complex predictive solutions that utilize a plethora of data and insight to create the ultimate in predictive performance. We go beyond traditional fraud detection methods, such as knowledge-based authentication, to offer a custom mix of passive and active authentication solutions that improve security and the customer experience. You want the latest deep learning techniques? We have them. You want custom models scored in milliseconds alongside your existing data requests. We can do that. You want a mix of cloud deployment, dedicated hosted services and on-premise? We can do that too. We have more than 20 partners across the globe, creating the most comprehensive identity management network anywhere. We also have teams of experts across the world with the know how to combine Experian and partner expertise to craft a bespoke solution that is unrivaled in detection performance. The results speak for themselves: Experian analyzes more than a billion credit applications per year for fraud and identity, and we’ve helped our clients save more than $2 billion in annual fraud losses globally. CrossCore™, our fraud prevention and identity management platform, leverages the full breadth of Experian data as well as the data assets of our partners. We execute machine learning models on every decision to help improve the accuracy and speed with which decisions are made. We’ve seen CrossCore machine learning result in a more than 40 percent improvement in fraud detection compared to rules-based systems. Our certified partner community for CrossCore includes only the most reputable leaders in the fraud industry. We also understand the need to expand our data to cover those who may not be credit active. We have the largest and most unique sets of alternative credit data among the credit bureaus, that includes our Clarity Services and RentBureau divisions. This rich data helps our clients verify an individual’s identity, even if they have a thin credit file. The data also helps us determine a credit applicant’s ability to pay, so that consumers are empowered to pursue the opportunities that are right for them. And in the background, our models are constantly checking for signs of fraud, so that consumers and clients feel protected. Fraud prevention and identity management are built upon a foundation of trust, innovation and keeping the consumer at the heart of every decision. This is where I’m proud to say that Experian stands apart. We realize that criminals will continue to look for new ways to commit fraud, and we are continually striving to stay one step ahead of them. Through our unparalleled scale of data, partnerships and commitment to innovation, we will help businesses become more confident in their ability to recognize good people and transactions, provide great experiences, and protect against fraud.

Synthetic identities come from accounts held not by actual individuals, but by fabricated identities created to perpetrate fraud. It often starts with stealing a child’s Social Security number (SSN) and then blending fictitious and factual data, such as a name, a mailing address and a telephone number. What’s interesting is the increase in consumer awareness about synthetic identities. Previously, synthetic identity was a lender concern, often showing itself in delinquent accounts since the individual was fabricated. Consumers are becoming aware of synthetic ID fraud because of who the victims are — children. Based on findings from a recent Experian survey, the average age of child victims is only 12 years old. Children are attractive victims since fraud that uses their personal identifying information can go for years before being detected. I recently was interviewed by Forbes about the increase of synthetic identities being used to open auto loans and how your child’s SSN could be used to get a phony auto loan. The article provides a good overview of this growing concern for parents and lenders. A recent Javelin study found that more than 1 million children were victims of fraud. Most upsetting is that children are often betrayed by people close to them -- while only 7 percent of adults are victimized by someone they know, 60 percent of victims under 18 know the fraudster. Unfortunately, when families are in a tight spot financially they often resort to using their child’s SSN to create a clean credit record. Fraud is an issue we all must deal with — lenders, consumers and even minors — and the best course of action is to protect ourselves and our organizations.

Federal legislation makes verifying an individual’s identity by scanning identity documents during onboarding legal in all 50 states Originally posted on Mitek blog The Making Online Banking Initiation Legal and Easy (MOBILE) Act officially became law on May 24, 2018, authorizing a national standard for banks to scan and retain information from driver’s licenses and identity cards as part of a customer online onboarding process, via smartphone or website. This bill, which was proposed in 2017 with bipartisan support, allows financial institutions to fully deploy mobile technology that can make digital account openings across all states seamless and cost efficient. The MOBILE Act also stipulates that the digital image would be destroyed after account opening to further ensure customer data security. As an additional security measure, section 213 of the act mandates an update to the system to confirm matches of names to social security numbers. “The additional security this process could add for online account origination was a key selling point with the Equifax data breach fresh on everyone’s minds,” Scott Sargent, of counsel in the law firm Baker Donelson’s financial service practice, recently commented on AmericanBanker.com. Read the full article here. Though digital banking and an online onboarding process has already been a best practice for financial institutions in recent years, the MOBILE Act officially overrules any potential state legislation that, up to this point, has not recognized digital images of identity documents as valid. The MOBILE Act states: “This bill authorizes a financial institution to record personal information from a scan, copy, or image of an individual’s driver’s license or personal identification card and store the information electronically when an individual initiates an online request to open an account or obtain a financial product. The financial institution may use the information for the purpose of verifying the authenticity of the driver’s license or identification card, verifying the identity of the individual, or complying with legal requirements.” Why adopt online banking? The recently passed MOBILE Act is a boon for both financial institutions and end users. The legislation: Enables and encourages financial institutions to meet their digital transformation goals Makes the process safe with digital ID verification capabilities and other security measures Reduces time, manual Know Your Customer (KYC) duties and costs to financial institutions for onboarding new customers Provides the convenient, on-demand experience that customers want and expect The facts: 61% of people use their mobile phone to carry out banking activity.1 77% of Americans have smartphones.2 50 million consumers who are unbanked or underbanked use smartphones.3 The MOBILE Act doesn’t require any regulatory implementation. Banks can access this real-time electronic process directly or through vendors. Read all you need to know about the MOBILE Act here. Find out more about a better way to manage fraud and identity services.   References 1Mobile Ecosystem Forum, MEF Mobile Money Report (https://mobileecosystemforum.com/mobile-money-report/), Feb. 5, 2018. 2Pew Research Center, Mobile Fact Sheet (http://www.pewinternet.org/fact-sheet/mobile/), Jan. 30, 2017. 3The Federal Reserve System, Consumers and Mobile Financial Services 2015 (https://www.federalreserve.gov/econresdata/consumers-and-mobile-financial-services-report-201503.pdf), March 2015.

Customer Identification Program (CIP) solution through CrossCore® Every day, I work closely with clients to reduce the negative side effects of fraud prevention. I hear the need for lower false-positive rates; maximum fraud detection in populations; and simple, streamlined verification processes. Lately, more conversations have turned toward ID verification needs for Customer Information Program (CIP) administration. As it turns out, barriers to growth, high customer friction and high costs dominate the CIP landscape. While the marketplace struggles to manage the impact of fraud prevention, CIP routinely disrupts more than 10 percent of new customer acquisitions. Internally at Experian, we talk about this as the biggest ID problem our customers aren’t solving. Think about this: The fight for business in the CIP space quickly turned to price, and price was defined by unit cost. But what’s the real cost? One of the dominant CIP solutions uses a series of hyperlinks to connect identity data. Every click is a new charge. Their website invites users to dig into the data — manually. Users keep digging, and they keep paying. And the challenges don’t stop there. Consider the data sources used for these solutions. The winners of the price fight built CIP solutions around credit bureau header data. What does that do for growth? If the identity wasn’t sufficiently verified when a credit report was pulled, does it make sense to go back to the same data source? Keep digging. Cha-ching, cha-ching. Right about now, you might be feeling like there’s some sleight of hand going on. The true cost of CIP administration is much more than a single unit price. It’s many units, manual effort, recycled data and frustrated customers — and it impacts far more clients than fraud prevention. CIP needs have moved far beyond the demand for a low-cost solution. We’re thrilled to be leading the move toward more robust data and decision capabilities to CIP through CrossCore®. With its open architecture and flexible decision structure, our CrossCore platform enables access to a diverse and robust set of data sources to meet these needs. CrossCore unites Experian data, client data and a growing list of available partner data to deliver an intelligent and cost-conscious approach to managing fraud and identity challenges. The next step will unify CIP administration, fraud analytics and a range of verification treatment options together on the CrossCore platform as well. Spoiler alert. We’ve already taken that step.