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Customer Experience

The Email Address: An Untapped Resource for Banks

February 6, 2018

As banks have responded to declining foot traffic by trimming branch networks, it’s increasingly rare for customers to visit for anything but major account issues.

Driving up to cash a check (and get some candy for the kids) has been replaced by direct deposit. You can instantly pay back a friend for the dinner tab with an app. Online lending and microloans have opened up many new avenues for consumers to secure loans.

These realities indicate customers demand a different experience.

Especially as banks target the needs of younger demographics, market share will decline if they aren’t able to offer convenient ways to open accounts or apply for new products.

Instead of face-to-face interactions, your new link to your customer is their email address

In fact, when brands contact customers, 82% prefer email for notifications and 77% prefer it for questions and issues.

So, of course it’s important to verify that email address exists. However, the value of the email address for risk scoring and identity validation doesn’t stop there.

How can the email address help with risk assessment?

When it comes to account openings and new applications, you need to be able to determine which account openings require scrutiny. The email address is perfect here, as it’s already collected as part of every application.

Since the average email address is connected to 130 accounts, there’s invaluable history associated with an email address that is difficult to for fraudsters to fake.

This includes factors such as email validity, tenure, ownership, and previous transaction behavior. By taking a deep look behind this information and scoring it, we help ensure that applicant won’t look as “new” as before.

Using this score up-front not only empowers fraud teams with intelligence for accurate evaluation, but also enables scalability to meet increased demand.

New-account fraud will soar 44%, rising from $5 billion in annual losses to a projected $8 billion.

This process isn’t solely limited to applications at your company, either, it encompasses all transactions across our entire network, which links lenders into a global shared fraud database, facilitating enhanced early fraud detection and prevention.

Account takeover

The first step a fraudster takes in an account takeover is to acquire a customer’s personal information. Some common ways that fraudsters steal account and personal information include:

  • Purchasing credentials via dark web sites
  • Searching social media or publicly available databases
  • Conducting a phishing scam through email or messaging services
  • Leveraging malware to install keyloggers to collect all data
  • Using a brute force password cracking tool

Once the fraudster acquires enough personal information, such as billing address, credit card number, or social security number, he will try to access the account and change the contact information.

When fraudsters change contact information, the real customer is locked out of the account. However, a common use case for us includes running Emailage scores on the email address and phone number provided during account maintenance, adding a frontline layer of protection for your customers.

Synthetic ID fraud

The long game of synthetic ID fraud almost always start with a bank account, the backbone of a credit presence.

Synthetic identity fraud occurs when fraudsters use a blend of real and fake information to create a new “individual.” In some cases, the information used is entirely false.

The bad guys then will open up new credit cards or auto loans under the fake individual’s name, to create and boost a credit profile.

There’s a reason everyone is talking about synthetic ID fraud right now. Personally, I think it’s a lot more common than we even know. At last year’s Lend360, what I learned on a panel about synthetic ID fraud caused me to sign my daughter up for identity theft protection.

It’s important to build a clear picture of who is behind a transaction

Verifying only standard data, such as name or address, opens a lot of gaps; while it is simple to validate that information, it’s nigh impossible to tell a fraudster using stolen information from a good customer on this information alone.

At the same time, you want to be able to provide an experience that mirrors the same handshake-and-smile experience you’d extend at a physical branch. Balancing strict fraud controls and a seamless customer experience is one of the toughest challenges in fraud prevention.

We believe fraud controls should be invisible to the consumer. Each extra step to confirm identity represents additional friction to your customers. In a time where customer experience is paramount, the last thing anyone wants is a hassle.