By: Kari Michel As consumers and businesses continue to experience financial hardship, the likelihood of continued bankruptcy filings is fairly strong. Data from the Administrative Office of the U.S. Courts show there were 1,222,589 filings through September, versus 1,100,035 in the first nine months of 2009. According to American Bankruptcy Institute executive director Samuel J. Gerdano, "As the economy looks to climb out of the recent recession, businesses and consumers continue to file for bankruptcy to regain their financial footing. With unemployment hovering near 10% and access to credit remaining tight, total filings in 2010 will likely exceed 1.6 million." Given the bankruptcy trends, what can lenders do to protect themselves from acquiring consumers that are at risk for filing for bankruptcy? Bankruptcy scores are available, such as Bankruptcy PLUS, and are developed to accurately identify characteristics specific to a consumer filing for bankruptcy. Bankruptcy scores are typically used in conjunction with risk scores to set effective acquisition strategies. _________________ Source:  http://www.collectionscreditrisk.com/news/bankruptcy-filings-up-3003998-1.html  

By: Staci Baker As we approach the end of the year, and the beginning of holiday spending, consumers are looking at their budgets to determine what level of spending they can do this holiday season, or if they will need additional credit for those much wanted gifts. With that in mind, it is a great time for lenders to evaluate their portfolios to determine which consumers are the best credit risks. According to the National Retail Federation, consumer spending will be up 2.1% for the 2010 holiday season. Although still at pre-recession levels, consumer confidence is starting to re-bound.  But, with an increase in consumer confidence, how will lenders meet the demand for credit, and determine the credit worthiness of potential applicants? Since the beginning of the recession there has been a demand for tools that will assist lenders in managing credit risk. One such tool is the tri-bureau VantageScore, a scoring model that is highly accurate, offers greater predictiveness, and is able to score more people. Scoring models allow lenders to predict the likelihood a consumer will default on a loan. Determining who is a qualified candidate through scoring models is only part of the equation. Each lender needs to determine what level of risk to take, and what is the cost of the credit per applicant. By assessing credit risk, having a good plan in place and knowing who the target customer is, lenders will be more prepared for the holiday season. ___________________ National Retail Federation, http://www.nrf.com/modules.php?name=News&op=viewlive&sp_id=1016

As E-Government customer demand and opportunity increases, so too will regulatory requirements and associated guidance become more standardized and uniformly adopted.  Regardless of credentialing techniques and ongoing access management, all enrollment processes must continue to be founded in accurate and, most importantly, predictive risk-based authentication. Such authentication tools must be able to evolve as new technologies and data assets become available, as compliance requirements and guidance become more defined, and as specific fraud threats align with various access channels and unique customer segments. A risk-based fraud detection system allows institutions to make customer relationship and transactional decisions based not on a handful of rules or conditions in isolation, but on a holistic view of a customer’s identity and predicted likelihood of associated identity theft.  To implement efficient and appropriate risk-based authentication procedures, the incorporation of comprehensive and broadly categorized data assets must be combined with targeted analytics and consistent decisioning policies to achieve a measurably effective balance between fraud detection and positive identity proofing results. The inherent value of a risk-based approach to authentication lies in the ability to strike such a balance not only in a current environment, but as that environment shifts as do its underlying forces. The National Institute of Standards and Technology, in special publication 800-63, defines electronic authentication (E-authentication) as “the process of establishing confidence in user identities electronically presented to an information system”. Since, as stated in publication 800-63, “individuals are enrolled and undergo an identity proofing process in which their identity is bound to an authentication secret, called a token”, it is imperative that identity proofing is founded in an approach that generates confidence in the authentication process. Experian believes that a risk-based approach that can separate valid from invalid identities using a combination of data and proven quantitative techniques is best. As “individuals are remotely authenticated to systems and applications over an open network, using a token in an authentication protocol”, enrollment processes that drive ultimate provision of tokens must be implemented with an eye towards identity risk, and not simply a series of checks against one or more third party data assets. If the “keys to the kingdom” are housed in the ongoing use of tokens provided by Credentials Service Providers (CRA) and binding credentials to that token, trusted Registration Authorities (RA) must employ highly predictive identity proofing techniques designed to segment true, low-risk identities from identities that may have been manipulated, fabricated, or in true-form are subject to fraudulent use, abuse or victimization. Many compliance-oriented authentication requirements (ex. USA PATRIOT Act, FACTA Red Flags Rule) and resultant processes hinge upon identity element (ex. name, address, Social Security number, phone number) validation and verification checks. Without minimizing the importance of performing such checks, the purpose of a more risk-based approach to authentication is to leverage other data sources and quantitative techniques to further assess the probability of fraudulent behavior.

By: Kari Michel As consumers and businesses continue to experience financial hardship, the likelihood of continued bankruptcy filings is fairly strong. Data from the Administrative Office of the U.S. Courts show there were 1,222,589 filings through September, versus 1,100,035 in the first nine months of 2009. According to American Bankruptcy Institute executive director Samuel J. Gerdano, "As the economy looks to climb out of the recent recession, businesses and consumers continue to file for bankruptcy to regain their financial footing. With unemployment hovering near 10% and access to credit remaining tight, total filings in 2010 will likely exceed 1.6 million." Given the bankruptcy trends, what can lenders do to protect themselves from acquiring consumers that are at risk for filing for bankruptcy? Bankruptcy scores are available, such as Bankruptcy PLUS, and are developed to accurately identify characteristics specific to a consumer filing for bankruptcy. Bankruptcy scores are typically used in conjunction with risk scores to set effective acquisition strategies. _________________ Source:  http://www.collectionscreditrisk.com/news/bankruptcy-filings-up-3003998-1.html  

By: Staci Baker As we approach the end of the year, and the beginning of holiday spending, consumers are looking at their budgets to determine what level of spending they can do this holiday season, or if they will need additional credit for those much wanted gifts. With that in mind, it is a great time for lenders to evaluate their portfolios to determine which consumers are the best credit risks. According to the National Retail Federation, consumer spending will be up 2.1% for the 2010 holiday season. Although still at pre-recession levels, consumer confidence is starting to re-bound.  But, with an increase in consumer confidence, how will lenders meet the demand for credit, and determine the credit worthiness of potential applicants? Since the beginning of the recession there has been a demand for tools that will assist lenders in managing credit risk. One such tool is the tri-bureau VantageScore, a scoring model that is highly accurate, offers greater predictiveness, and is able to score more people. Scoring models allow lenders to predict the likelihood a consumer will default on a loan. Determining who is a qualified candidate through scoring models is only part of the equation. Each lender needs to determine what level of risk to take, and what is the cost of the credit per applicant. By assessing credit risk, having a good plan in place and knowing who the target customer is, lenders will be more prepared for the holiday season. ___________________ National Retail Federation, http://www.nrf.com/modules.php?name=News&op=viewlive&sp_id=1016

As E-Government customer demand and opportunity increases, so too will regulatory requirements and associated guidance become more standardized and uniformly adopted.  Regardless of credentialing techniques and ongoing access management, all enrollment processes must continue to be founded in accurate and, most importantly, predictive risk-based authentication. Such authentication tools must be able to evolve as new technologies and data assets become available, as compliance requirements and guidance become more defined, and as specific fraud threats align with various access channels and unique customer segments. A risk-based fraud detection system allows institutions to make customer relationship and transactional decisions based not on a handful of rules or conditions in isolation, but on a holistic view of a customer’s identity and predicted likelihood of associated identity theft.  To implement efficient and appropriate risk-based authentication procedures, the incorporation of comprehensive and broadly categorized data assets must be combined with targeted analytics and consistent decisioning policies to achieve a measurably effective balance between fraud detection and positive identity proofing results. The inherent value of a risk-based approach to authentication lies in the ability to strike such a balance not only in a current environment, but as that environment shifts as do its underlying forces. The National Institute of Standards and Technology, in special publication 800-63, defines electronic authentication (E-authentication) as “the process of establishing confidence in user identities electronically presented to an information system”. Since, as stated in publication 800-63, “individuals are enrolled and undergo an identity proofing process in which their identity is bound to an authentication secret, called a token”, it is imperative that identity proofing is founded in an approach that generates confidence in the authentication process. Experian believes that a risk-based approach that can separate valid from invalid identities using a combination of data and proven quantitative techniques is best. As “individuals are remotely authenticated to systems and applications over an open network, using a token in an authentication protocol”, enrollment processes that drive ultimate provision of tokens must be implemented with an eye towards identity risk, and not simply a series of checks against one or more third party data assets. If the “keys to the kingdom” are housed in the ongoing use of tokens provided by Credentials Service Providers (CRA) and binding credentials to that token, trusted Registration Authorities (RA) must employ highly predictive identity proofing techniques designed to segment true, low-risk identities from identities that may have been manipulated, fabricated, or in true-form are subject to fraudulent use, abuse or victimization. Many compliance-oriented authentication requirements (ex. USA PATRIOT Act, FACTA Red Flags Rule) and resultant processes hinge upon identity element (ex. name, address, Social Security number, phone number) validation and verification checks. Without minimizing the importance of performing such checks, the purpose of a more risk-based approach to authentication is to leverage other data sources and quantitative techniques to further assess the probability of fraudulent behavior.