The following post is provided by Experian™, a MeridianLink® partner.
This new year prioritize fraud detection and the consumer experience with digital risk signals.
In today’s digital age, the tug-of-war between fraud prevention and user experience is as intense as ever. Consumers expect businesses to keep them safe but also want a seamless, positive experience. This seeming contradiction leaves many financial institutions at a loss, but as Mark Twain said, “The secret of getting ahead is getting started.”
Successful companies start by applying a series of simple steps to better verify identities and assess fraud risk when opening accounts. These initial steps focus on identity verification, fraud risk assessment via analytics, and step-up authentication tactics such as one-time passcodes. Once established, companies can then look at expanding the breadth and depth of identity verification and fraud risk ‘signals’ used to increase or decrease the confidence you have in a digital application.
Here’s a brief look at how digital risk signals can positively impact your consumers and your business.
Using a digital risk score provides real-time and frictionless insight into the potential threat, or lack thereof, for a particular device being used to complete an online application. When combined with more traditional identity verification and fraud detection checks associated with name, social security number, address, phone, and date of birth, the ability to detect more fraud and approve more good applications can increase by double-digit percentages at both ends of the spectrum. Simply put, adding device intelligence to application screening processes can detect more fraud before losses are incurred and approve more good applications for consumers who have little patience for online inconvenience or friction. Experian’s 2023 Identity and Fraud Report – Experian Insights indicates that 51% of U.S. consumers considered ceasing account opening during the process due to friction and a less-than-positive experience.
Device risk assessment and scoring take into account various attributes or signals gleaned from the accessing device be it mobile, laptop, or desktop. These signals include information about software versions, device configurations, malware indicators, time and language settings, IP address, and geolocation. These attributes can tell us a lot about the device and whether it makes sense in the context of the transaction—and fraudsters must do a lot of work to manipulate them. A digital risk score considers these elements and distills them down to an actionable score for use in isolation or in combination with other traditional identity verification and fraud risk scores.
Confidence in the validity and low-risk use of a device used in account opening can provide added validation to approve that application without imposing friction that can turn a potentially great customer into a frustrated consumer taking their business elsewhere. Conversely, knowing that an accessing device is a high risk can justify imposing additional friction and checks prior to approval or, when warranted, declination.
In this digital age, our identities are not only defined by our personal information but also by the devices we use to engage online. Best practice identity verification and fraud risk assessment require intelligence gathering in both categories, and Experian makes it easy to incorporate with our integration with MeridianLink.
To learn more about how Experian can help you build out your fraud strategy visit: Enterprise Fraud Management Solutions & Services | Experian