How Financial Institutions Can Combat Coronavirus Fraud
In the wake of the unprecedented COVID-19 pandemic, experts at TransUnion have identified a 23% increase in bank fraud. The most common form of theft among these cases is account takeover fraud. So, what does this mean for banks and other financial institutions? How can these organizations protect themselves and their customers from coronavirus fraud, particularly as it relates to underwriting?
Account Takeover and Bank Fraud Before and After COVID-19
With the COVID-19 outbreak, fraudsters have found even more chances to lure customers into providing sensitive information. Fake websites have been set up claiming to offer medical supplies; false alerts have been sent out asking customers to log in to a portal designed to capture passwords and security questions. Whatever the tactic, each one of these points of contact exposes customers and your financial institution to the threat of account takeover fraud.
Prior to the pandemic, account takeover fraud was already a cause of concern for financial institutions (FIs). 89% of financial institution executives identified account takeover as the most common cause of losses in the digital channel. TransUnion had previously found a 347% rise in account takeover fraud from 2018 to 2019. Beyond the financial implications, there are equal concerns about the impact such breaches have on the institutions themselves; 46% of all organizations have reported damage to their brand and reputation following account takeover incidents. The most challenging element of battling account takeovers is the fact that the theft of personal information by cybercriminals begins outside of a financial institution’s firewalls. That is to say that customers’ personally identifiable information and login credentials are stolen before they ever have interactions with an FI. With all of this happening outside the purview of a financial institution, what’s most important has been how lending and banking organizations identify fraudulent behavior after the fact.
With all that in mind, stopping account takeover requires a multipronged approach, one that we discuss in a previous post. Without a robust strategy, FIs will continue to be vulnerable, learning about account takeover only after the customer calls to report missing funds. With increased pressure from the COVID-19 pandemic, now more than ever it is vital for banks and other FIs to have effective security measures that can identify account takeover fraud and protect customers before it happens.
Establish an Account Takeover Strategy with Customer Service in Mind
For over 15 years, Enova, through its lending brands, has been using predictive analytics to detect/prevent fraud. Since the launch of Enova Decisions, our team has taken the process a step further, developing custom fraud solutions for financial institutions and other mid-size businesses. In order to properly strike that balance between performance and design, fraud detection efforts need to reduce friction between your organization and your customers. When security tactics increase, it’s not uncommon for consumers and customers to feel a sense of frustration, and in worst case, turn them away.
However, a fraud detection solution that’s customized for their experience can increase a sense of safety and build trust.
One way we help clients is leveraging both 1st-party and 3rd-party data to identify patterns of behaviors indicative of account takeover. Using these insights, our clients can create a step-up authentication process such that only high risk behaviors would require additional verification steps.
Enova Decisions: Your Partner in Coronavirus Fraud Protection
COVID-19 has changed every part of our day-to-day lives. At Enova Decisions, we enable businesses to be agile and nimble through our cutting-edge technology for fighting bank fraud in real-time. Contact Enova Decisions today to learn how we can help protect you and your customers during this pandemic.