Experian’s Fraud and Identity Solutions team recently conducted a webinar entitled: “A risk-based approach to finding opportunity in today’s market: New approaches to fraud, compliance, and operational efficiency in an evolving economy.” I specifically discussed the current business drivers and fraud trends we, as a consumer and commercial authentication services provider, hear most often from our existing and potential clients. I was encouraged to have the following forces validated by our audience, and I thought they’d be worth sharing with you via this forum. In what I believe to be rank order with most influencing first:
- Customer experience is king. The addressable market for most of our clients is effectively an ever more limited pool of viable consumers. From the consumer’s perspective it’s a ‘buyer’s market’. ‘Good’ consumers know they are ‘good’ and those 750 scorers don’t tolerate poor customer service.
- Risk seeking credit policies may be making a comeback. Many of our clients are starting to heal from the past few years, and are ready to get back on the bike. However, this does open the door more widely for application fraud activity and risk.
- New products and associated solicitations and access channels translate to higher risk as fraud prevention and fraud detection processes may be less robust in the early launch stages and certainly less time-tested.
- Human & IT resources are still in short supply. As these new channels open and fraud risk increases, necessary fraud prevention and authentication oriented resources are still overly constrained and often significantly lagging in proportionality behind the recovery-minded marketing minds.
- Regulatory pressures continue to equate to higher operational costs, in the form of fraud referral rates, in process engineering and human intervention and activities, not to mention the opportunity costs associated with denial of service to those ‘good’ consumers I just mentioned.
- So, hosted services and solutions are where it’s at these days. Our clients want their vendors, including us at Experian, to save their IT resources, deliver quicker to market services, such as fraud models, knowledge based authentication, and other authentication tools, and provide collective capabilities that would otherwise be years away if left to the mercy of their internal development queues.
- All products and processes are under review, as you might imagine. Cost control is no longer a back-burner policy and focus. ROI is the key metric these days, and likely above any other. Our clients demand flexible tools that can be deployed in multiple process points and across multiple business units. Blanket policies (including fraud prevention and authentication) are no longer good enough. Our clients’ tailored products, access channels, and market segmentations require the same level of unique design in the products we deliver.
