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Recent technological advancements are ushering in a new era of innovation for businesses and consumers but can also help perpetuate fraud. Today we released our annual Future of Fraud Forecast, highlighting five fraud threats that businesses and consumers should be wary of this year, which include: Generative AI accelerates DIY fraud: The explosive popularity of generative AI has brought many benefits, but it’s also made fraud more accessible. Experian predicts fraudsters will use generative AI to accelerate “do-it-yourself” fraud with a wide range of deepfake content, such as emails, voice and video as well as code creation to set up scam websites and perpetuate online attacks. Fraudsters may also use generative AI to socially engineer “proof of life” schemes. Using stolen identities, fraudsters will leverage generative AI to create fake identities on social media. They can then interact online with these new profiles that look like a real consumer. This could dramatically increase the number of fraud attacks. To safeguard customers, companies will likely have to utilize multilayered fraud prevention solutions that “fight AI with AI.” Branches are cool again: Although there’s been a substantial migration to digital lending experiences, many consumers are heading in-person to bank branches to open new accounts or get financial advice. Consumers are doing this as they want to feel safer and think they’re avoiding online security risks by being in-person. When it comes to verifying identities at the branch, there can be human error or oversight that can happen in-person. According to an Experian report, 85% of consumers report physical biometrics as the most trusted and secure authentication method they’ve recently encountered, but the measure is only currently used by 32% of businesses to detect and protect against fraud. Experian forecasts that lenders will introduce more digital identity verification steps, such as physical biometrics, at branches for in-person account openings to protect legitimate customers and mitigate losses. Retailers hit with empty returns: With a rise in online shopping, fraudsters have found creative ways to scam some retailers and small businesses. The customer says they’re returning their purchased item but when the business receives the box, it’s empty. The customer then says they returned the product and it must have gotten lost in the mail. Experian predicts that more criminals will use this method to keep merchandise in 2024, leaving businesses with lost goods and revenue. Synthetic identity fraud will surge: During the pandemic, many fraudsters created synthetic identities but then quickly found easier methods to steal funds through various aid programs. Though they may have been dormant, these synthetic identities now have a few years of history. Experian predicts this will make it easier to elude detection — leading to fraudsters using those dormant accounts to “bust out” and steal funds over the next year. Businesses will need to collaborate more closely than ever with their fraud-prevention partners to review their current portfolios for synthetic identity accounts. Fraudsters expand into cause-related and investment deception: From fake GoFundMe campaigns, social media giveaways, investment opportunities and text fraud, fraudsters are employing new methods that strike an emotional response from consumers with cause-related asks or too-good-to-be-real offers to gain access to consumers’ vital, personal information. Experian predicts that these deceptive cause-related methods will surge in 2024 and beyond. To avoid becoming victims, consumers will have to be extremely cautious and confirm these opportunities, charities or texts are from the intended party before interacting with them. To mitigate fraud in 2024, businesses need to work with a trusted partner to implement a multilayered approach to identity verification and fraud prevention. Experian offers a full suite of automated tools that harness data and analytics to detect and prevent fraud. Learn more about Experian’s fraud prevention offerings here and register for our webinar for a deeper dive into these five fraud predictions and other emerging fraud trends.
We often say creating a better tomorrow isn’t just a slogan, it’s our goal. From our talent recruiting to our products and services, we want to play a positive role in your financial future. That desired impact extends to the work we do in the communities in which we live work and serve. That’s why our recent honor from the 2024 Anthem Awards is so exciting. Created in 2021 by The Webby Awards, The Anthem Awards honors the purpose and mission-driven work of people, companies and organizations worldwide. We are thrilled that our modern and more relatable approach to financial health has been honored with a Bronze Anthem Award for the video series, “HeartBroke,” produced in partnership with The Singleton Foundation. As part of our United for Financial Health initiative, the show brings together couples for frank and honest conversations about their finances and how relationships are tested with financial issues. Financial expert Misty Lynch coaches them through those issues to help them determine if they can work through it or end up HeartBroke(n). It’s no surprise that money matters can put enormous strain on relationships and our daily lives. That’s why we’re also working with The Singleton Foundation to help young adults master money basics in the show “Your World on Money.” Now in its second season, “Your World on Money” explores topics like insurance, how to negotiate your salary, credit invisibility and stock market basics. It's exciting to be among the distinguished winners honored this year. But for Experian, helping you feel empowered when it comes to your credit and finances is the bigger reward.
In its 11th year, Experian's Data Breach Resolution group today released its annual Data Breach Industry Forecast for 2024. The report’s global outlook identifies potential moves cybercriminals near and far may take to penetrate organizations and cause chaos. The six predictions included offer commentary into the evolving landscape including the vulnerabilities in expansive data supply chains, what may be new targets, and the sophistication of cyber crews globally. A key reminder is that cybercriminals are working smarter not harder. Like many, they too are potentially leveraging modern tools like artificial intelligence. There may be sophisticated cybergangs operating like organized crime families. Also, hackers today could be backed by growing resources from nation-state sponsors. Their MO is not only stealing data to possibly sell on the dark web or deploy ransomware anymore. They can potentially reap benefits by disrupting economies or industries as we mention in our prediction, “No, not Mother Earth!” or use intellectual property as collateral or for personal gain outlined in the “Winning from the Inside” prediction, for example. There are always new ways of conducting “business” for cybercriminals. In the face of emerging cyber threats, organizations are urged to prioritize cybersecurity as a fundamental aspect of their operations. They should regularly update and reinforce security protocols, conduct thorough risk assessments, and invest in cutting-edge cybersecurity technologies. By staying vigilant and adopting a proactive cybersecurity stance, organizations can significantly mitigate the risks posed by the evolving tactics of cybercriminals in 2024 and beyond. Experian Global Data Breach Resolution offers international resources for companies impacted by a security incident and services include IdentityWorks℠ Global, multilingual call centers, and notifications covering more than 100 countries. Experian has also recently expanded capabilities to Japan, Taiwan and Thailand. To access the complimentary report, visit https://ex.pn/2024databreachindustryforecast.
Today, we stand at the forefront of a digital revolution that is reshaping the financial services industry. And, against this backdrop, financial institutions are at vastly different levels of maturity; the world’s biggest banks are managing large-scale infrastructure migrations and making significant investments in AI while regional banks and credit unions are putting plans in place for modernization strategies, and fintechs are purpose-built and cloud native. To explore this more, I recently had the privilege of attending the annual Reuters NEXT live event in New York City. The event gathers globally recognized leaders across business, finance, technology, and government to tackle some of today’s most pressing issues. On the World Stage, I joined Del Irani, a talented anchor and broadcast journalist, to discuss the future of lending and the pivotal role of data and AI in building a more inclusive financial system. Improving financial access Our discussion highlighted the lack of access to traditional financial systems, and the impact it has on nearly 100 million people in North America alone. Globally, the problem affects over one billion people. These people, who are credit invisible, unscoreable, or have subprime credit scores, are unable to secure everyday financial products that many of us take for granted. What many don’t realize is, this is not a fringe subset of the population. Most of us, myself included, know someone who has faced the challenges of financial exclusion. Everyday Americans, including young people who are just starting out, new immigrants and people from diverse communities, often lack access to mainstream financial products. We discussed how traditional lending has a limited view of a consumer. Like looking through a keyhole, the lender’s understanding of the person in view is often incomplete and obstructed. However, with expanded data, technology, and advanced analytics, there is an opportunity to better understand the whole person, and as a result have a more inclusive financial system. At Experian, we have a unique ability to connect the power of traditional credit with alternative data, bringing a more holistic understanding of consumers and their behaviors. We are dedicated to leveraging our rich history in data and our expertise in technology to create the future of credit and ultimately bring financial power to everyone. The future of lending After spending two days with over 700 industry leaders from around the world, one thing is abundantly clear: much like the early days of the internet, today, we are at the cutting-edge of a technical revolution. Reflecting on my time at Reuters NEXT, I am particularly excited by the collective commitment to drive innovative, and smarter ways of working. We are only beginning to scratch the surface of how data and technology can transform financial services, and Experian is positioned to play a significant role. As we look to the future, I am excited about the ways we will create new opportunities for businesses and consumers alike.
We believe that financial literacy leads to empowerment. That is why Experian supports initiatives and partners with community organizations to deliver financial education. We also develop products and services that give more control to consumers over their credit profile and financial health. As part of advancing our mission of Financial Power to All®, we are proud to announce we are helping more than 5,000 Hispanic individuals nationwide by relieving $10 million dollars of consumer debt. To provide families with this boost, we joined forces with ForgiveCo, a Public Benefit Corporation (PBC), to administer the acquisition and cancellation of qualifying consumer debt for the selected recipients. Beneficiaries will also receive a one-year premium Experian membership for free that offers access to their Experian credit report in English and Spanish[i], FICO® Score[ii], bilingual educational content, and other financial resources. We hope this effort helps raise awareness of the importance of financial literacy for everyone, and that Experian has resources to help individuals reach their financial dreams. To amplify the message, we collaborated with multi-platinum, award-winning singer and songwriter Prince Royce and you can see his video here. In fact, we have been making a concerted effort the last several years to evolve our educational resources and products to better support all underserved communities. Some of our other activities include the creation of the B.A.L.L. for Life initiative that connects African American and Hispanic youth with financial education, supporting scholarships for Asian Americans through the Ascend organization, providing custom resources for Out & Equal and Born This Way Foundation for the LGBTQ+ community, supporting the NextGen Innovation Lab for Disability:IN, and sponsoring credit counseling for the military community with Operation HOPE. For resources in Spanish, Experian offers a credit e-book and consumers can access a full suite of articles at the Ask Experian blog here. [i] Only Experian credit reports are available in Spanish. All other services associated with an Experian membership are available in English only. English fluency is required for full access to Experian’s products. [ii] Credit score calculated based on FICO® Score 8 model. Your lender or insurer may use a different FICO® Score than FICO® Score 8, or another type of credit score altogether. Learn more.
Amid some of the financial challenges that underserved communities experience, members across the financial services community remain committed to championing initiatives and programs that drive greater financial inclusion. In fact, collaboration has led to the inclusion of non-debt related payment information on consumers’ credit profiles, as well as digital services that make it easier to manage money. These efforts have helped to broaden access to fair and affordable financial resources for more individuals. While significant progress has been made, there is still more work to do. However, some of the misconceptions and myths about the financial services community are hindering further advancement. Debunking these myths will accelerate progress by building trust between the financial services community and consumers. Person withdrawing money from ATM contactless Myth #1: “Financial institutions have no interest in underserved consumers or credit invisibles.” The truth is, banks and credit unions want to say “yes” to more prospective borrowers, including individuals and families from underserved communities. Beyond being the right thing to do, it’s an opportunity to potentially build lifelong relationships with a relatively untapped market. A show of good faith to communities who have largely been ignored by the financial system could lead to customer loyalty that may extend to their family and friends. That’s why participants across the financial ecosystem have been proponents of including expanded data sources—such as on-time telecom, utility and video streaming service payments—on to consumer credit reports, as well as exploring other Fair Credit Reporting Act (FCRA)-regulated data sources, including payment data on short-term small dollar loans and expanded public records data. Making this data more accessible to lenders provides a more comprehensive view of a consumer’s ability and willingness to repay outstanding debt—an actionable solution to extending credit to consumers without lenders taking on additional risk. Myth #2: “There is a lack of trustworthy financial education resources.” The financial services community and affiliated organizations recognize that empowering people with financial knowledge and skillset are critical to consumers’ financial success. In fact, banks and credit unions are partnering with nonprofits and non-governmental organizations to better understand the unique challenges and opportunities within specific communities and provide relevant tools and resources. For example, Experian’s B.A.L.L. for Life (Be A Legacy Leader) program, launched in partnership with the National Urban League, serves as a catalyst for engaging with Black communities and low-income youth through live events and digital financial education. Subject matter experts, professional athletes, celebrities, and other influencers share their experiences and expertise, covering topics such as banking, credit, financial management and investing. In addition, to help people improve their financial management, Experian partners with the National Foundation for Credit Counseling (NFCC). The NFCC connects consumers with certified financial counselors to help them address various pain points, including debt management, homeownership, student loans or small business cash flow issues. Myth #3: “Underserved communities have few opportunities to build credit and enter the mainstream financial system.” People from underserved communities, as well as younger consumers and recent immigrants are often excluded from the mainstream financial system because they lack an extensive credit history. Historically, it’s created a vicious cycle; in order to get credit, you have to have credit. Fortunately, there has been a sea change in innovative solutions to address the specific needs of these populations. These include new credit scoring models and microfinancing which provide financial services to individuals who may have been excluded from traditional banking systems. In addition, by incorporating expanded data sources, such as telecom, utility and residential rental payments onto credit reports, lenders have more visibility into consumers who may have been excluded by traditional credit scoring methods.These programs help individuals and families from underserved communities establish and build a credit history that could enable loans, or the ability to rent an apartment or open their dream business. An example is Experian Boost®, a free feature that allows Experian members to contribute their history of making utility, cellphone, insurance, residential rent and video streaming service payments directly into their Experian credit profile. By incorporating nontraditional credit data like paying utility bills on time, online banking transactions, rental payments and verified income data, more people can establish a credit profile that can potentially qualify them for a loan. More Inclusion, Fewer Myths It’s encouraging that community organizations and banks are beginning to see the economic and social benefits of aligning on financial literacy and inclusion. As more initiatives come online, underserved populations will be able to establish a better financial foundation. Then, we can declare the myths to be history.