To learn more about what strategies businesses should be formulating, Digital Journal spoke with EK Koh, Experian’s senior vice president of Global Identity & Fraud Solutions on what businesses need to be prepared for as they open back up the economy.
Digital Journal: What do businesses need to be prepared for as they open back up?
EK Koh: Due to the coronavirus pandemic, the nature of business is going to change. COVID-19 has done what no CEO or company has done before, by radically shifting how businesses operate. Now more than ever, the ability to provide a great customer experience digitally will be crucial. This is especially true for brick and mortar stores. Not only will the customer experience change, but the employee experience will as well as more businesses operate remotely.
This presents a number of new opportunities for fraudsters as online interactions increase. For some people, the pandemic may have caused them to engage with brands or their employees digitally for the first time. As people with less experience navigating digital fraud risks move their interactions online, fraud will rise as well.
Another reason we can expect fraud to rise is the current economic downturn. Unemployment is on the rise and the increase of government aid presents yet another opportunity for fraudsters to target.
DJ: How is Experian’s CrossCore product helping businesses better manage their fraud?
Koh: One of the biggest challenges that businesses face in combatting fraud is keeping up with different fraud tactics. When new types of fraud arise, businesses are often months behind in finding ways to protect themselves from it. With the new release of CrossCore, businesses now have easy access to pre-qualified and pre-integrated best in class fraud and identity services, and can now easily execute and define their fraud strategies through simple orchestration. This enables businesses to react to threats quickly in just minutes. CrossCore also provides analytics reports, which gives businesses the chance to see how effective their new strategies are.
Another benefit of the new CrossCore is its ability to combat account takeover fraud. In addition to account opening fraud, when someone opens a new account on your behalf, account takeover fraud typically occurs more slowly over time by changing different account credentials, and eventually hits the victim with fraudulent transactions.
CrossCore helps businesses improve their top line by improving the overall digital customer experience. By passively but strongly recognizing customers, CrossCore allows our clients to personalize their digital experience for their users and reduce customer friction. CrossCore also helps businesses improve their bottom line by reducing fraud losses and reducing the cost of fraud response.
DJ: How is advanced analytics playing a role?
Koh:Analytics is crucial to CrossCore’s success in pinpointing fraud. The mission of CrossCore is to accurately identify customers and to help businesses provide a better customer experience. Analytics allow businesses to capture data on their customers and devices to ensure the customer is who they claim to be. For example, passive intelligence signals such as which device a user is using, how a user handles their device, down to which hand they are holding it in or how quickly they type on a keyboard, can be critical to determining if the user behavior is typical. These behavioral biometrics together with device intelligence, which CrossCore tracks in real-time, are the key to tracking users and whether users are who they say they are.
DJ: What are the biggest fraud trends that you see for the next year?
Koh:Due to COVID-19 and the new normal of the remote workforce and online transactions, we expect the following fraud trends to increase.
The first is a rising trend is account takeover fraud, which 37% of businesses reported in the last year. In light of the global pandemic, this type of fraud, which occurs when a fraudster gains access to an account that doesn’t belong to them, is predicted to rapidly increase. This type of attack frequently involves phishing attempts to compromise a user’s data, and is likely to occur in light of government assistance programs due to the pandemic.
Another key fraud trend to watch out for in 2020 is account opening fraud. This takes place when criminals use stolen personal information to open new accounts for fraudulent activity such as borrowing money in another person’s name. Identity verification is often used to validate a user, but is also the easiest control to bypass because so much identity data is compromised. Averting account opening risk requires strong identity authentication, such as through digital document verification, proving that the person applying for the account is indeed the legitimate consumer.
One of the newest types of fraud, synthetic identity fraud uses a blend of fake information and real data to create brand new fake identities that expert-level criminals use to establish and build up an online credit history. Businesses can invest time and money in chasing people that turn out to not even exist.
Other types of fraud we expect to rise include authorized push payment fraud and transaction payment fraud. While the next months and years will likely see an increase of fraud, there are a number of measures businesses can put in place to combat it.
