Consumers opening a checking or demand deposit account with your financial institution are at the start of what hopefully becomes a significant service journey. Among typical account opening enrollment activities, you’ll usually present them with additional interaction opportunities including:
- Getting a debit card
- Applying for a credit card
- Providing loyalty and rewards program information
- Encouraging enrollment in online and mobile banking
- Describing P2P capabilities
- Identifying where ATMs can be accessed
- Supplying a contact center telephone number
That’s a lot of potential consumer touchpoints and direct contact, and it’s only the beginning: consumer loans, savings and investment accounts, and many other financial services may also be supported, each with add-on business possibilities.
But you’ll only be able to take advantage of the full opportunity to service your consumers if you can overcome the significant challenge of keeping them safe from fraud. The more of your products a customer uses, the greater the potential for a fraudster to gain access.
Fraudsters lurk around virtually every interaction and are determined to gain key details of an individual’s accounts to make card purchases, withdraw funds or access other accounts. To help maintain your institution’s reputation for service, you’ve got to defend your customers across all your channels so people can conduct their financial lives with confidence.
Account Takeover Fraud Is Increasing in Prevalence
Fraud — especially in the form of identity theft and losses from account takeovers — is a growing threat to consumers and financial institutions.
Approximately one-quarter of U.S. adults have recently fallen victim to identity theft, and account takeovers have resulted in consumers and financial institutions suffering an $11 billion loss.
The most frequent activities performed following account takeover were fraudulent credit card transactions, using a P2P service to move funds out of an account and changing contact information on an account such as phone number or address. And new fraud opportunities are constantly being created by the rapid increase of digital interactions and the influx of users interacting with merchants and financial institutions online.
But account takeover can be difficult to detect. Unlike card fraud where the accountholder might quickly notice suspicious purchases and charges, an account takeover attack can go undetected for an extended period – as criminals can change login and contact information – delaying the time it takes for the real accountholder to realize they’ve been compromised.
Battle Fraud by Creating a Full View of the Customer
98% of consumers interact with their bank or credit union at least once a month, whether in person, at an ATM, online, or via their smartphone, according to Raddon Research. The experience with those delivery touchpoints has a strong impact on a consumer’s willingness to remain at your institution. Leaving fraud inadequately addressed can result in unwanted customer attrition. However, for decades, financial institutions have adopted a siloed approach to tackling fraud activity.
The Issue at Hand:
Roughly a quarter of Americans have been a victim of identity theft — which has cost them and banks some $11 billion.
But detecting account takeover threats requires a comprehensive, layered approach, and many banks and credit unions haven’t connected real-time consumer data across their service channels. As fraud evolves, it’s imperative that your risk management strategies start using a broad and deep view across all your channels to paint a picture of what is normal, or unusual, for each of your customers.
Start by identifying authentication fraud. Using connected data, you can provide faster, more informed authentication recommendations, directly to your channels, before a transaction or interaction is even allowed. Your intent should be to accurately verify who is actually accessing accounts, making purchases, or speaking with your associates, in whatever channels are being used.
The most holistic way to do this is to create a 360-degree view of your customers by understanding their interactions with you. By connecting your consumer financial channels, touchpoints and data — debit and credit card transactions, online and mobile banking activity, ATM interactions, P2P transactions, rewards programs, contact center activity — through a single point, you can create an in-depth profile of an individual’s financial services behaviors and patterns.
Such cross-channel knowledge, combined with industry data, will improve decision-making by better equipping you to approve or deny an interaction as specific actions are placed into context. You’ll be able to more accurately identify unusual or suspicious activities and improve the customer experience.
Ask the Right Questions and Pay Attention to Details
No two financial consumers act the same. People do different things, in different places, in different ways.
Creating a complete view of each customer helps you determine what is “normal” behavior for that person. You’ll also need the capability to generate a score and recommendation for authentication based on the answers to questions such as:
- How many times did the user attempt to access a specific channel?
- Has the user accessed other channels?
- Is the same vector (e.g. email address) accessing multiple cards and accounts?
- Was the vector recently changed?
- What action was attempted/taken (PIN change, inquiry, phone number change, etc.)?
- Authentication result – did the user pass or fail?
- Have authentication failures been received? How many?
Your score for each customer’s interaction will help you make a decisioning recommendation, and deliver the decision to the appropriate channel. And as more of your channels are used, additional transaction data can be fed to the authorization engine to help distinguish a customer’s behaviors and detect potential fraud before it happens.
Why Banks Can’t Give Up and Give In
Living in a connected world, consumers expect their experiences to be the same across all channels, whether they are transacting digitally, at the ATM, working with a contact center associate or at a branch. Your systems need to connect in real-time to ensure a consistent experience — and that includes authentication across all channels.
Don’t surrender: Provide cross-channel payment solutions, and be positioned to leverage consolidated real-time data to deliver best-in-class fraud protection and frictionless consumer experiences.