The COVID-19 pandemic forced many businesses around the world to accelerate plans for digital transformation. At the same time, it amplified opportunities for criminals — as reflected by Internet fraud now being much more prevalent. So, how can we balance increased digitisation and cyber security? And how can we identify and catch fraudsters early while maintaining trust between money lenders and customers?
Anand Krishnaswamy, Vice President, Identity and Fraud, addressed these challenges at TransUnion’s recent 2020 Hong Kong Financial Services Summit. In his presentation — Managing Consumer Trust Through Digital Transformation — he examined common examples of Internet fraud and how to use data to enable early fraud detection, enhancing customer confidence when accessing accounts digitally.
Everyday, in-person activities, such as banking, business meetings, medical consultations, classes and shopping, have shifted to digital channels. And while consumers have become more accepting of this new normal, it’s been met with a rise in fraud cases. In Hong Kong, the digital fraud rate is relatively higher when compared to other developed markets. Identity theft remains a major contributor to overall fraud, reaching 53% in the second quarter of 2020. If left unchecked, this will bring loss and harm to both money lenders and customers.
To protect against identity theft, it’s imperative to take precautions at each step of an interaction. To do so, key multilayered dimensions must be verified, including identity, devices used, email, phone and IP address. This information should be collected and screened against publicly available and other digital information to verify identity.
A common sign of fraud is customer information being unexpectedly changed online. And while legitimate customers do need to alter their information, there are usually distinct differences between authentic updates and actions of fraudsters. A good consumer may use multiple devices, such as a smartphone, desktop, laptop or tablet, to access an account. It stands to reason these devices may eventually need to be replaced. IP address indicators may also change from time to time, when a good customer accesses their account at work or from home, or when they move or change jobs. Fraudster accounts may use a computer already recognised by the system, but then proceed to open a new account with a different name, address, IP address and email. In cases of user account theft, legitimate customer information may be used, but other high-risk digital indicators can differentiate between good consumers and fraudsters.
Authentication of devices is an important part of identifying fraud early on. Device risk can be determined by examining attributes related to the device, such as whether it’s been associated with previous fraud cases or shows anomalies in geolocation data, if it matches the customer’s usage history, and the velocity of transactions made on the account. Email, telephone number and IP addresses are also powerful indicators of device risk. You can check whether the registered email is valid or has any special characters, and if telephone numbers match with records. IP addresses can reveal the true user location or if the device is coming from a suspicious VPN or network.
To explore more on managing fraud trends, as well case studies from this session, click here to watch the on-demand recording and download the presentation materials. Contact your sales representatives or click here for password.
When verifying identity, countermeasures are necessary to protect against fraud, but if they’re too intrusive or complicated, you can diminish the customer experience. TransUnion’s TruValidate solution can help balance cybersecurity with a friction-right customer journey. Money lenders use TruValidate and TransUnion’s credit database on a single platform, single API to seamlessly verify account information, such as device, phone number, email, IP, and other fraud indicators. With a multilayered and adaptive fraud defence in place, the success rate of fraudsters can be greatly reduced.
To learn more about TruValidate, click here.
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