Tag: fraud
Experian is recognized as a leading security solution provider for fraud and identity solutions in order to protect customers and financial institutions
It’s been a wild ride for the financial services industry over the past eight years. After the mortgage meltdown, the Great Recession and a stagnant economy … well, one could say the country had seen better days. Did you watch The Big Short last winter? It all came crumbling down. And then President Barack Obama entered the scene. Change was needed. More oversight introduced. Suddenly, we had the Affordable Care Act, the Dodd-Frank Wall Street Reform Act and the creation of the Consumer Financial Protection Bureau (CFPB). Taxes were raised on the country’s highest earners for the first time since the late-1990s. In essence, the pendulum swung hard and fast to a new era of tightened and rigorous regulation. Fast forward to present day and we find ourselves on the cusp of transitioning to new leadership for the country. A new president, new cabinet, new leaders in Congress. What will it all mean for financial services regulations? It’s helpful to initially take a look back at the key regulations that have been introduced over the past eight years. Mortgage Reform: Long gone are the days of obtaining a quick mortgage. New rules have required loan originators to verify and document the consumer’s income and assets, including employment status (if relied upon), existing debt obligations, mortgage-related obligations, alimony and child support. The CFPB has also expanded foreclosure protections for struggling borrowers and homeowners. Maintaining the health of the mortgage industry is important for the entire country, and updated rules have enhanced the safety and transparency of the mortgage market. Home values have largely recovered from the darkest days, but some question whether the underwriting criteria have become too strict. Combatting Fraud: The latest cyber-attack trends and threats come fast and furious. Thus, regulators are largely addressing the challenge by expecting banks to adhere to world-class standards from organizations such as the National Institute of Standards and Technology (NIST). The Federal Trade Commission (FTC) and the National Credit Union Administration (NCUA) implemented the Red Flags Rule in November 2008. It requires institutions to establish policies and procedures to identify and recognize red flags — i.e., patterns, practices or specific activities that indicate the possible existence of identity theft — that occur during account-opening activities, existing account maintenance and new activity on an account that has been inactive for two or more years. Loss Forecasting: The Dodd-Frank Act Requires the Federal Reserve to conduct an annual stress test of bank holding companies (BHCs), savings and loan holding companies, state member banks, and nonbank financial institutions. In October 2012, the Fed Board adopted the Comprehensive Capital Analysis and Review (CCAR) rules. This requires banks with assets of $50 billion or more to submit to an annual review centered on a supervisory stress test to gauge capital adequacy. In January 2016, Dodd-Frank Act Stress Testing (DFAST) was introduced, requiring bank holding companies with assets of $10 billion or more to conduct separate annual stress tests known as “company-run tests” using economic scenarios. Every year regulators expect to see continued improvement in stress-testing models and capital-planning approaches as they raise the bar on what constitutes an acceptable practice. CFPB: No longer the new kids on the block, the CFPB has transitioned to an entity that has its tentacles into every aspect of consumer financial products. Mortgage lending was one of their first pursuits, but they have since dug into “ability-to-pay underwriting” and servicing standards for auto loans, credit cards and add-on products sold through third-party vendors. Now they are looking into will likely be the next “bubble,” – student lending – and educating themselves about online marketplace lending. Data Quality: Expectations related to data quality, risk analytics, and regulatory reporting have risen dramatically since the financial downturn. Inaccuracy in data is costly and harmful, slows down the industry, and creates frustration. In short, it’s bad for consumers and the industry. It’s no secret that financial institutions rely on the accuracy of credit data to make the most informed decisions about the creditworthiness of their customers. With intense scrutiny in this area, many financial institutions have created robust teams to handle and manage requirements and implement sound policies surrounding data accuracy. --- This is merely a sliver of the multiple regulations introduced and strengthened over the past eight years. Is there a belief that the regulatory pendulum might take a swing to other side with new leadership? Unlikely. The agenda for 2017 largely centers on the need to improve debt collections practices, enhance access to credit for struggling Americans, and the need for ongoing monitoring of the fintech space. Only time will tell, but one thing is certain. Anyone involved in financial services needs to keep a watchful eye on the ever-evolving world of regulation and Washington.
As we approach the one-year anniversary of the EMV liability shift, we have seen an increase in e-commerce fraud — to the tune of 15% higher than last year. Additional insights from Experian’s biannual analysis on e-commerce fraud include: 44% of e-commerce billing fraud came from Florida, California and New York* 52% of e-commerce shipping fraud came from Florida, New York and California* Miami, Fla., is the most dangerous city in the United States for e-commerce merchants* As fraudsters continue to perpetrate card-not-present fraud, ensure you are prepared. You’ll be thankful if fraudsters come calling. >> E-commerce Attack Rates
Historically, the introduction of EMV chip technology has resulted in a significant drop in card-present fraud, but a spike in card-not-present (CNP) fraud. CNP fraud accounts for 60% to 70% of all card fraud in many countries and is increasing. Merchants and card issuers in the United States likely will see a rise in CNP fraud as EMV migration occurs — although it may be more gradual as issuers and merchants upgrade to chip-based cards. As fraud continues to evolve, so too should your fraud-prevention strategies. Make a commitment to stay abreast of the latest fraud trends and implement sophisticated, cross-channel fraud-prevention strategies. >>Protecting Growth Ambitions Against Rising Fraud Threats
Did you know that identities can shift (for better or worse) in just 30 days? To succeed in today’s multichannel, mobile environment, businesses must have a broader, more dynamic identity management strategy that includes: Identity proofing: Point-in-time verification (e.g., account opening) Authentication: Ongoing verification (e.g., account login) Identity management: Continual monitoring throughout the Customer Life Cycle Minimize your identity fraud risk, increase customer engagement and provide a satisfying customer experience by shifting to a strategy focused on identity relationship management. >>The three pillars of identity relationship management
Experian has been selected as one of the leading players in the fraud detection and prevention space in Juniper Research’s Online Payment Fraud strategies report.
Fraudsters invited into bank branches The days of sending an invitation in the mail have for the most part gone by the wayside. Aside from special invitations for weddings and milestone anniversaries, electronic and email invitations have become the norm. However, one major party planner has refused to change practices — banks inviting fraudsters into their banking centers. As a fraud consultant I have the privilege of meeting many banking professionals, and I hear the same issues and struggles over and over again. It’s clear that the rapid increase of fraudulent account-opening applications are top of mind to many. What the executives making policy don’t realize is they’re facing fraud because they’re literally inviting the fraudsters into their branches. Think I’m exaggerating? Let me explain. I often encounter bank policymakers who explain their practice of directing a suspicious person into a banking center. Yes, many banks still direct applicants who cannot be properly verified over the phone or online into their banking center to show proof of identity. Directing or inviting criminals into your bank instead of trying to keep them out is an outdated, high-risk practice — what good can possibly come of it? The argument I typically hear from non-fraud banking professionals: “The bad guys know that if they come into the bank we will have them on film.” Other arguments include that the bad guys are not typically bold enough to actually come into the banking center or that their physical security guards monitor high-traffic banking centers. But often that is where bank policies and employee training ends. Based on my years of experience dealing with banks of all sizes, from the top three global card issuers to small regional banks, let me poke a few holes in the theory that it is a good deterrent to invite perpetrators into your banking center. Let’s role-play how my conversation goes: Me: “When an underwriter with limited fraud training making the decision to direct a suspicious applicant into a banking center, what is the policy criteria to do so?” Bank policymaker: (typical response) “What do you mean?” Me: “What high-risk authentication was used by the underwriter to make the decision to extend an invitation to a high-risk applicant to come into the banking center? If the applicant failed your high-risk authentication questions and you were not able to properly identify them, what authentication tools do the branch managers have that the underwriters do not?” Bank: “Nothing, but they can usually tell when someone is nervous or seems suspicious.” Me: “Then what training do they receive to identify suspicious behaviors?” (You guessed it …) Bank: “None.” (I then switch to the importance of customer experience.) Me: “How do you notify the banking center in advance that the suspicious applicant was invited to come in to provide additional verification?” Bank: “We do not have a policy to notify the banking center in advance.” Me: “What is considered acceptable documentation? And are banking center employees trained on how to review utility statements, state ID cards, drivers’ licenses or other accepted media?“ Bank: “We do not have a list of acceptable documentation that can be used for verification; it is up to the discretion of the banking center representative.” Me: “How do you ensure the physical safety of your employees and customers when you knowingly invite fraudsters and criminals into your banking center? How do you turn down or ask the suspicious person to leave because they do not have sufficient documentation to move forward with the original application for credit? If a suspicious person provides your employee with a possible stolen identification card, is that employee expected to keep it and notify police or return it to the applicant? Are employees expected to make a photocopy of the documentation provided?” The response that I usually receive is, “I am not really sure.” I hope by now you are seeing the risk of these types of outdated practices on suspicious credit applications. The fact is that technology has allowed criminals to make fairly convincing identification at a very low cost. If employees in banking centers are not equipped, properly trained, and well-documented procedures do not exist in your fraud program — perhaps it’s time to reconsider the practice or seek the advice of industry experts. I have spent two decades trying to keep bad guys out of banks, but I can’t help but wonder — why do some still send open invitations to criminals to come visit their bank? If you are not yet ready to stop this type of bad behavior, at the very least you must develop comprehensive end-to-end policies to properly handle such events. This fraud prevention tactic to invite perpetrators into banks was adopted long before the age of real-time decisions, robust fraud scores, big data, decision analytics, knowledge-based authentication, one-time passcodes, mobile banking and biometrics. The world we bank in has changed dramatically in the past five years; customers expect more and tolerate less. If a seamless customer experience and reducing account-opening and first-party fraud are part of your strategic plan, then it is time to consider Experian fraud solutions and consulting.
Experian’s annual global fraud report reveals trends that can help organizations mitigate fraud and improve the customer experience: Apply the right-sized fraud solutions to reduce unnecessary customer disruption Ensure you have a universal consumer view Select fraud solutions that are future-proof As fraudsters evolve, losses are climbing and the status quo is no longer effective. Organizations should be as forward-looking in fighting fraud as they are in business operations and marketing. >> Global Business Trends: Protecting Growth Ambitions Against Rising Fraud Threats
In an attempt to stay ahead of fraud, systems have become more complex, more expensive and even more difficult to manage, leading to more friction for customers. How extensive is this impact? 30% of online customers are interrupted to catch one fraudulent attempt One in 10 new applicants may be an imposter using breached data $40 billion of legitimate customer sales are declined annually Businesses must continue their efforts to protect all parties’ interests if they are to thrive in this new world of rapid technological growth. >> Infographic: Global fraud trends
We are excited to announce that Experian Fraud and Identity Solutions is presenting at FinovateFall 2016! Finovate conferences showcase cutting-edge banking and financial technology in a unique demo-only format. Held twice a year, the conferences bring together the leaders from top financial institutions, fintech companies, investors from around the globe, and fintech media to share and promote the most innovative financial technology solutions. \"Experian’s Fraud and Identity Solutions is a leader in customer-centric identity and fraud solutions, providing fraud management solutions to some of the world’s largest brands in financial services, insurance, and retail,\" said Adam Fingersh, general manager and senior vice president of Fraud and Identity Solutions in North America. \"We will introduce our Fraud and Identity Solutions and promote our newly released CrossCore platform. CrossCore puts more control in the hands of fraud teams to adapt and deploy strategies that keep up with the pace of fraud while reducing burdens on IT and data science teams.\" Fingersh and John Sarreal, senior director of Fraud and Identity product management at Experian, are presenting the 7-minute demo focusing on the key CrossCore capabilities, and how CrossCore manages fraud and identity services through its flexible API; open, plug-and-play platform; and powerful workflow and strategy design capabilities. In Forrester’s 2016 “Vendor Landscape: Mobile Fraud Management”, Experian Fraud and Identity Solutions was cited as having the most capabilities and one of the highest estimated revenues in total fraud management in the market, between $200 million and $250 million. Join us for the event on September 8-9 in New York. Experian also has an exclusive 20% off discount code (Experian20FF16) to get even more savings! For more information on the event or to view videos of previous demos, please visit finovate.com.
New industry report highlights the convergence of business growth and fraud prevention strategies Experian has published its first annual global fraud report covering the convergence of growth strategies and fraud prevention. The report, Global Business Trends: Protecting Growth Ambitions Against Rising Fraud Threats, is designed as a guide for senior executives and fraud prevention professionals, offering new insights on how the alignment of strategies for business growth and fraud prevention can help a business grow revenues while managing risks in an increasingly virtual world. The report identifies five trends that businesses should assess and take action on to mitigate fraud and improve the customer experience in today\'s fast-paced, consumer-centric environment: Applying right-sized fraud solutions to reduce unnecessary customer disruption: It\'s time to move on from a one-size-fits-all approach that creates more customer friction than necessary. Instead, companies should apply fraud solutions that reflect the value and level of confidence needed for each transaction. This means right-sizing your fraud solutions to align with true fraud rates and commercial strategy. Having a universal view of the consumer is the core of modern fraud mitigation and marketing: Achieving a universal profile of consumer behavior — beyond the traditional 360-degree view — requires access to a combination of identity data, device intelligence, online behavior, biometrics, historical transactions and more, for consumer interactions not only with you, but across other businesses and industries as well. Companies that translate this knowledge and use it to identify consumers can distinguish a fraudster from a real customer more easily, building trust along the way. Expanding your view through a blended ecosystem: In addition to using your own first-party data sources, companies need to participate in a blended ecosystem, working across businesses and even industries. Fraudsters have access to more data than ever before, including data traditionally used to verify identities, and they use that data to create an entire digital profile. Therefore, you can no longer get to the digital interaction data you need by managing the process in a siloed manner. Achieving an expansive view of the universal consumer requires multiple data sources working together. Achieving agility and scale using service-based models: Today, more and more companies are choosing subscription-based systems rather than building in-house or implementing on-premise solutions. Continuous upgrades and the access to new risk logic that come with subscription models provide more agility and faster response to emerging threats, no matter how fast your volume grows or what products, channels or geographies you pursue. Future-proofing fraud solution choices: Companies need access to a wide variety of traditional and emerging technologies and information sources to fill in knowledge gaps and blind spots where fraudsters try to hide. The ability to modify strategies quickly and catch fraud faster while improving the customer experience is a critical aspect of fraud prevention moving forward. Bringing together these key trends, the report provides business leaders with the insight they need to fight fraud using the same consumer-focused approach currently being used to attract new customers and grow revenue. \"There is a persistent mindset that fraud loss is just the cost of doing business,\" said Steve Platt, global EVP, Fraud and Identity, Experian. \"But as fraudsters evolve, those losses are climbing, and the status quo is no longer effective or acceptable. We all need to be as forward-looking in fighting fraud as we are in business operations and marketing, and a real understanding of consumers is critical for success. We\'re talking about the convergence of business growth and fraud prevention, and we\'re pleased to provide the first report in the marketplace covering this topic.\" Download the full report here. The report also features an interactive Fraud Prevention Benchmark tool that companies can use to explore how these trends impact their business and how the performance of their approach measures up against industry practices. The report is relevant to functions spanning the enterprise, including C-suite executives such as chief marketing officers (CMOs), chief risk officers (CROs) and chief data officers (CDOs). The report focuses on business processes where fraud infiltrates, including new account opening, account access, money movement transactions, and emerging trends combating fraud, such as advanced fraud analytics. In each area, the report details how multiple business functions can apply responses to create business growth. Steve Platt added: \"We hear from our clients that they are most successful when CMOs along with CDOs and CROs all work together to understand the customer and develop fraud management solutions that create a better overall experience.\" Experian was recently cited in Forrester\'s 2016 Vendor Landscape: Mobile Fraud Management Solutions1 report and listed as having nine out of a possible 10 capabilities needed to combat mobile fraud. Experian was also identified as one of three leading players in the fraud detection and prevention space in a new study from Juniper Research.2 Experian applied best practices to create a global report on providing fraud management solutions that allow companies to maximize profitability while providing secure, hassle-free customer interactions. Learn more about Experian’s Fraud and Identity business. 1Vendor Landscape: Mobile Fraud Management Solutions, Forrester Research, Inc., June 2016. 2Online Payment Fraud: Key Vertical Strategies & Management 2016–2020, Juniper Research, June 2016.
Many fraud and compliance teams are struggling to keep pace with new business dynamics. Here are several of the many mobile device trends affecting business today: 35% year-over-year growth in mobile commerce from 2014-2015 Value of mobile payment transactions is forecasted to reach more than $27 billion in 2016 45% of smartphone owners use a mobile device to make a purchase every month This rapid growth only reinforces the need for aggressive fraud prevention strategies and the adoption of new technologies to prepare for the latest emerging cybersecurity threats. >> Forrester\'s 2016 Vendor Landscape: Mobile Fraud Management Solutions Report
Is the speed of fraud threatening your business? Like many other fraud and compliance teams, your teams may be struggling to keep up with new business dynamics. The following trends are changing the way consumers do business with you: 35 percent year-over-year growth in mobile commerce More than $27 billion forecasted value of mobile payment transactions in 2016 45 percent of smartphone owners using a mobile device to make a purchase every month More than 1 billion mobile phone owners will use their devices for banking purposes by the end of 2015 In an attempt to stay ahead of fraud, systems have become more complex, more expensive and even more difficult to manage, leading to more friction for your customers. How extensive is this impact? 30 percent of online customers are interrupted to catch one fraudulent attempt One in 10 new applicants may be an imposter using breached data $40 billion of legitimate customer sales are declined annually because of tight rules, processes, etc. This rapid growth only reinforces the need for aggressive fraud prevention strategies and adoption of new technologies to prepare for the latest emerging cybersecurity threats. Businesses must continue their efforts to protect all parties’ interests. Fraudsters have what they need to be flexible and quick. So why shouldn’t businesses? Introducing CrossCore™, the first smart plug-and-play platform for fraud and identity services. CrossCore uses a single access point to integrate technology from different providers to address different dangers. When all your fraud and identity solutions work together through a single application program interface, you reduce friction and false positives — meaning more growth for your business. View our recent infographic on global fraud trends
Every day, millions of new things get connected online, such as toasters, heart monitors and cars. Many of these things have weak security controls that create vulnerabilities in critical private networks. As more products get connected, the casual mindset about the security risks inherent in the Internet of Things must begin to change. Here are 12 tips to help safeguard your systems from the Internet of Things. >> Securing the Internet of Things
Experian cited in Mobile Fraud Management Solutions report from Forrester as having the most capabilities and one of the highest estimated revenues in total fraud management
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