Fraud remains a significant risk for communication service providers, but the right tools can help prevent issues and speed up the onboarding of new customers
Today’s business environment is fraught with identity theft, data breaches and overall fraud exposure. Communications service providers are particularly vulnerable to account fraud during the account opening process. Javelin Strategy & Research estimates that new account fraud is expected to grow 44% between 2014 and 2018, rising from $5 billion in annual losses to a staggering $8 billion.
CSPs know they must employ measures to combat fraud at every customer touchpoint. Unfortunately, when the verification and authentication processes are outdated, they can be slow, inaccurate and intrusive. A weak monitoring and detection system can result in a “double whammy” for CSPs, opening the door to fraud and delaying the activation and onboarding for legitimate customers. Application processing issues often oblige a CSP to halt the application process entirely for new customers. People despise being put on hold, having to answer questions twice or waiting to access their service. The last thing any CSP wants to do is turn away good customers or delay their path to satisfaction.
For CSPs, the key to effective fraud detection and prevention – that doesn’t erode customer experience – is the ability to tune up or tune down analytical tools based on risk exposure so they can quickly differentiate between fraudulent behavior and quality customers. One way to help achieve this level of nimbleness is to leverage data and analytics to help get timely, actionable insights into a customer’s identity that will help provide the confidence to move forward with account activation, or ask more questions and possibly stop the process altogether.
One consideration is to embrace a new breed of “intelligent fraud scores” that provides scores, reason codes and attributes, which help determine if an identity is real and the person opening the account, in fact, has that identity. The scores combine data assets and build attributes against that data set in order to create a score for each individual, enabling CSPs to better segment applicants without disruption to the flow of the application process.
Intelligent fraud scores link Personally Identifiable Information, like a social security number with an address or phone number; and if those different components align correctly the system generates a score reflecting a particular level of confidence around the applicant’s validity. They also use a wide breadth and depth of information from external sources, including financial institutions, insurance and utilities to help enable CSPs to go beyond their own four walls for applicant insights.
For privacy and security, intelligent fraud scores leverage advanced keying logic to help validate components of an applicant’s identity. This keying technology helps drive down the number of false positives that normally accompany fraud products. By using real-time identity linkages, these scores help identify synthetic and true name fraud.
Fraud is a very real threat to customer acquisition. New ways of using data and analytics, such as the intelligent fraud score, can help enable CSPs to better identify fraud, often decreasing the number of questionable customers, while expediting the onboarding of good ones. With the right system in place, it helps everyone win (except the fraudsters).
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