Tag: online banking

Online identity verification has become a basic necessity for everyday life. Consumers today might expect to upload a picture of their driver's license or answer security questions before creating a new account. And it's crucial to them — 63% say it's extremely or very important for businesses to be able to recognize them online. While many organizations have a consumer recognition strategy, moving from strategy to action and then getting the desired result isn't easy. That's particularly true when you're working to create seamless experiences for customers while fighting increasingly sophisticated fraudsters. Why is online identity verification challenging? Identity verification in the physical world might be as simple as checking a government-issued ID card — and perhaps an additional form of identification (or two) when the stakes are higher. Verification becomes more complicated as you move into the digital realm, especially when you need to automate decisions. There are many specific challenges to overcome, but some of the main ones fall into four categories. Finding the right friction: In an ideal world, every legitimate user will flow through your verification checks with ease. In reality, you may need to introduce some roadblocks to comply with know your customer (KYC) rules and prevent fraud. Finding the friction-right balance can be tricky. Accessing and using data: Using expanded data sources, such as behavior and device info, can improve outcomes without adding friction. But simply having more data isn’t the goal. You need to be able to organize, process and use the data in a compliant manner to quickly and accurately verify identities. Fighting fraud: You’re up against formidable foes who consistently test your systems for weaknesses and share the results with other fraudsters. You have to be able to spot first-party fraud, identity thieves and synthetic identities. Securing the data: Accessing and storing customer data is vital for a successful identity verification system, but it’s your responsibility to securely protect customers’ data. It also may be a legal requirement, and you need to be mindful of all the applicable regulations. These aren't fixed challenges that you can overcome in a single hurdle. Consumer preferences, fraud tactics and regulations are continually evolving, and your identity verification platform needs to keep up. Potential benefits throughout the customer lifecycle Companies that want to create, manage and continuously identify consumers are starting to take an enterprise-wide approach that relies on creating a single-customer view. The idea is to have a single identity that you can expand as you learn more about a person’s preferences and behavior. Otherwise, business units can wind up with fragmented views that lead to jumbled messaging, errors and missed opportunities. While it can be difficult to implement well, the single-view approach can also be powerful in action: Targeting and onboarding: Marketing, acquisition and onboarding aren’t necessarily handled by the same teams, but a smooth process can create a lasting good impression. There are also recent developments that can provide pre-fill capabilities with their identification verification solutions, which can create a nearly friction-free onboarding process. Prevent fraud: The single-view approach also lets you leverage cross-device and real-time data to detect and prevent fraud, and determine the right-size verification method. Using identity graphs to verify identities in real-time can also help you detect fraud, including account takeovers and first-party fraud. Customer experience: Consistently identifying customers can improve their experience — particularly when different departments can easily access and update the same identification material. In turn, this can lead to brand loyalty and the potential to upsell and cross-sell customers. The need for accurate verification is growing as people spend more time living and shopping online. Only 16% of consumers are confident businesses can consistently recognize them online, which also means there’s an opportunity to surprise and delight the skeptics. What do consumers want? Most people want to be recognized as they move throughout their digital lives. But data breaches and identity theft continuously make headlines, and people aren't ignorant of the dangers of sharing their personal information. In fact, consumers ranked identity theft (80%) as their top online security concern, a sizable +20% jump from the previous year. Finding the right balance of privacy, security and due diligence is important for earning customers' trust. However, the best approach to online identity verification may depend on who your customers are and how they interact with your products and services. Finding a great online identity verification partner Knowing how important online identity verification can be for the success of your business, you need to be sure that the digital identity solutions providers you partner with can meet your current and future needs. A good fit can: Give you access to multidimensional data: You can use online and offline data to support your digital identity verification systems. Some vendors can also help you use internal data,deterministic dataand outputs from probabilistic models to improve your results. Scale to meet future challenges: Many businesses are exploring how to use machine learning and artificial intelligencefor identity resolution and verification. These can be especially powerful when combined with robust data sources and may become more important as additional data sources come online. Protect your business: Identity verification solutions need to help you comply with the regulatory requirements and detect fraud with low false-positive rates to protect your business. First and foremost, you want to work with a partner who knows thatidentity is personal. Your customers are more than data points, and putting their needs and wants first will ultimately help you earn their trust and business. Learn more about Experian’s customer-centric identity verification solutions. Learn more

In a changing economy, banks of all sizes are more budget conscious, leading many to pull back on their marketing spend for new customer acquisition. But by making strategic marketing moves now, banks can uncover new opportunities and drive profitable, long-term growth. So, how can you find, engage, and win over high-value customers? Know who’s in the market for credit To build an effective bank customer acquisition strategy, you’ll want to be proactive with your campaign planning. Let’s say you’ve already defined your customer profile and have insights into their interests, lifestyles, and demographics. With predictive metrics and advanced tools like trended data and propensity-to-open models, you can further refine your segmentation strategies by identifying individuals who are likely to be in the market for your product. This way, you can reach consumers at the right time and personalize offers to achieve higher open rates. Embrace the digital era With today’s consumers increasing their banking activities online, leveraging digital channels in your bank customer acquisition strategy is imperative. In addition to connecting with consumers through direct mail, consider reaching out to them through email, social media, or your mobile banking applications. This will not only help increase the visibility of the offer, but also allow consumers to receive and respond faster. Another way to enhance your banking strategies for growth while meeting consumer expectations for digital is by making it easier and more convenient for consumers to onboard. With an automated and data-driven credit decisioning solution, you can streamline steps that are traditionally manual and time-consuming, such as data collection and identity verification. By providing seamless customer acquisition in banking, you can accelerate your decision-making and increase the likelihood of conversion. Make the most of your marketing spend While customer acquisition in banking should remain a high priority, we understand that driving growth on a tight marketing budget can be challenging. That’s why we created a tip sheet outlining ways for banks and other lenders to enhance their customer acquisition processes while effectively managing costs. Some of the tips include: Going beyond conventional scoring methods. By leveraging an advanced customer acquisition solution, you can gain a holistic view of your prospective customers to enhance predictive performance and identify hidden growth opportunities. Focusing on high-potential customers. Pinpointing consumers who are actively seeking credit enables you to focus your offers and resources on those who are likely to respond, resulting in a greater return on marketing investment. Amplifying your credit offers. Re-presenting preapproved credit offers through the digital channels that consumers most frequent enables you to expand your campaign reach, increase response rates, and reduce direct mailing costs. View the tip sheet to learn how you can make the most of your marketing budget to acquire new customers and drive long-term growth. Access tip sheet

With an abundance of loan options in today’s market, retaining customers can be challenging for banks and credit unions, especially small or regional institutions. And as more consumers look for personalization and digital tools in their banking experience, the likelihood of switching to institutions that can meet these demands is increasing.1 According to a recent Experian survey, 78% of consumers have conducted personal banking activities online in the last three months. However, 58% of consumers don’t feel that businesses completely meet their expectations for a digital online experience. To remain competitive in today's market, organizations must enhance their prescreen efforts by accelerating their digital transformation. Prescreen in today's economic environment While establishing a strong digital strategy is crucial to meeting the demands of today’s consumers, economic conditions are continuing to change, causing many financial institutions to either tighten their marketing budgets or hold off on their prescreen efforts completely. Fortunately, lenders can still drive growth during a changing economy without having to make huge cuts to their marketing budgets. How? The answer lies in digital prescreen. Case study: Uncover hidden growth opportunities Wanting to grow their business and existing relationships, Clear Mountain Bank looked for a solution that could help them engage customers with money-saving product offers while delivering a best-in-class digital banking experience. Leveraging Digital Prescreen with Micronotes, the bank was able to identify and present dollarized savings to customers who held higher-priced loans with other lenders. What’s more, the bank extended these offers through personalized conversations within their online and mobile banking platforms, resulting in improved digital engagement and increased customer satisfaction. By delivering competitive prescreen offers digitally, Clear Mountain Bank generated more than $1 million in incremental loans and provided customers with an average of $1,615 in cost savings within the first two months of deployment. “Digital Prescreen with Micronotes supplied the infrastructure to create higher-quality, personalized offers, as well as the delivery and reporting. They made prescreen marketing a reality for us.” – Robert Flockvich, Director of Community Outreach and Retail Lending at Clear Mountain Bank To learn more about how you can grow your portfolio and customer relationships, read the full case study or visit us. Download the case study Visit us 1The Keys to Solving Banking’s Customer Loyalty & Retention Problems, The Financial Brand, 2022.

Experian’s newest Global Insights Report found that consumers are online 25% more today than they were just a year ago, highlighting the importance of the digital customer experience. To acquire customers and retain their loyalty, businesses need to focus on improving the online experience, preventing fraud, and managing credit risk.   This September, Experian surveyed 3,000 consumers and 900 businesses across all industries to explore business priorities and recent changes in consumer activities.   Many businesses and consumers are reportedly feeling more economically stable now than they were a year ago. As consumers resume spending the digital customer experience becomes even more paramount – requiring businesses to invest in scalable software solutions that will accurately assess credit risk and meet ever-changing needs and priorities.   Our research found that:   42% of consumers have increased concern for the safety of banking and shopping transactions Business adoption of advanced analytics has increased over last year, and adoption of artificial intelligence is up from 69% to 74% Consumers are more likely to share their personal data if it improves their experience, with 56% willing to share their contact information The top three consumer priorities continue to be security, privacy and convenience   Download the report to get all the latest insights into consumer desires and business behaviors as we move further through the digital evolution. Download the report

Over the last year and a half, strong trends emerged in how businesses and consumers interact online - specifically when validating identities and preventing fraud. We initially explored these trends at a global level, and now we've explored U.S.-specific insights into online security, the customer experience, and digital activities and operations. Download the North America findings report to learn more about business and consumer fraud and identity trends impacting the way we live, work, and interact. Review your fraud strategy

Previously, we discussed the risks of account takeover and how a Defense in Depth strategy can protect your business. Before implementation it’s important to understand the financial benefits of the strategy. There are a few key steps to assessing and quantifying the value of Defense in Depth. Transaction risk assessment: This requires taking inventory of all possible transactions. Session-level risk analysis: With the transactions categorized by risk level, the next step is to review session history based on the highest risk activity within the session. Quantify the cost of a challenge: There are multiple costs associated with challenging a user using step-up authentication. Consider both direct and indirect costs – failure rate, contact center operational cost, and attrition rate following failed challenges (consider lifetime value of account) Quantify the expected challenge rate: This can be done by comparing the Defense in Depth approach to a traditional approach. Below is a calculator that will help determine the cost of the reduced challenges associated with a Defense in Depth strategy versus a traditional strategy. initIframe('5f039d2e4c508b1b0aafa4bd'); In addition to the quantitative benefits, it is important to consider some of the qualitative benefits of this approach: Challenging at moments that matter: Customers appreciate and expect protection in online banking, especially when moving money externally or updating contact information. This is a great way to achieve both convenience and security. Improved fraud management: By staging the risk decision at the transaction level, the business can balance the type of challenge with the transaction risk. There are incremental cost considerations to include in the business case as well. For instance, there is an increase in transaction calls for a risk assessment at the medium/high risk transactions – about 10% in the example above. Generally, the increased transaction cost is more than offset by the reduction in cost of challenges alone. A Defense in Depth strategy can help businesses manage fraud risk and prevent account takeover in online banking without sacrificing user experience. If you are interested in assistance with building your business case and understanding the strategies to implement a successful Defense in Depth strategy, contact us today. Contact us 1Identity Fraud in the Digital Age, Javelin Strategy & Research, September 2020

Preventing account takeover (ATO) fraud is paramount in today’s increasingly digital world. In this two-part series, we’ll explore the benefits and considerations of a Defense in Depth strategy for stopping ATO. The challenges with preventing account takeover Historically, managing fraud and identity risk in online banking has been a trade-off between customer experience and the effectiveness of fraud controls. The basic control structure relies on a lock on the front door of online banking front door—login—as the primary authentication control to defend against ATO. Within this structure, there are two choices. The first is tightening the lock, which equals a higher rate of step-up authentication challenges and lower fraud losses. The second is loosening the lock, which results in a lower challenge rate and higher fraud loses. Businesses can layer in more controls to reduce the false positives, but that only allows marginal efficiency increases and usually represents a significant expense in both time and budget to add in new controls. Now is the perfect time for businesses reassess their online banking authentication strategy for a multitude of reasons: ATO is on the rise: According to Javelin Strategy & Research, ATO increased 72% in 2019.1 Users’ identities and credentials are at more risk than ever before: Spear phishing and data breaches are now a fact of life leading to reduced effectiveness of traditional authentication controls. Online banking enrollments are on the rise: According to BioCatch, in the months following initial shelter-in-place orders across the country, banks have seen a massive spike in first time online banking access. Users expect security in online banking: Half of consumers continue to cite security as the most important factor in their online experience. Businesses who reassess the control structure for their online banking will increase the effectiveness of their tools and reduce the number of customers challenged at the same time – giving them Defense in Depth. What is Defense in Depth? Defense in Depth refers to a strategy in which a series of defense mechanisms are layered in order to protect data and information. The basic assumptions underlying the value of a Defense in Depth strategy are: Different types of transactions within online banking have different levels of inherent risk (e.g., external money movement is considerably higher risk compared to viewing recent credit card transactions) At login, the overall transaction risk associated with the session risk is unknown The risk associated with online banking is concentrated in relatively small populations – the vast majority of digital transactions are low risk This is the Pareto principle at play – i.e., about 80% of online banking risk is concentrated within about 20% of sessions. Experian research shows that risk is even more concentrated – closer to >90% of the risk is concentrated in <10% of transactions. This is relatively intuitive, as the most common activities within online banking consist of users checking their balance or reviewing recent transactions. It is much less common for customers to engage in higher risk transaction. The challenge is that businesses cannot know the session risk at the time of challenge, thus their efficiency is destined to be sub-optimal. The benefits of Defense in Depth A Defense in Depth strategy can really change the economics of an online banking security program. Adopting a strategy that continuously assesses the overall session risk as a user navigates through their session allows more efficient risk decisions at moments that matter most to the user. With that increased efficiency, businesses are better set up to prevent fraud without frustrating legitimate users. Defense in Depth allows businesses to intelligently layer security protocols to protect against vulnerability – helping to prevent theft and reputational losses and minimize end-user frustration. In addition to these benefits, a continuous risk-based approach can have lower overall operational costs than a traditional security approach. The second part of this series will explore the cost considerations associated with the Defense in Depth strategy explored above. In the meantime, feel free to reach out to discuss options. Contact us 1Identity Fraud in the Digital Age, Javelin Strategy & Research, September 2020