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Know your customer: less friction in fraud detection

Delivering a frictionless customer experience is a top priority. According to Hero Digital, 82% of customers expect an easy digital experience.

Know Your Customer (KYC) guidelines in financial services require professionals to verify the identity, suitability, and risks involved with maintaining a business relationship. To adhere to anti-money laundering policies, organizations must implement identity and fraud detection systems. However, adhering to this need poses the possibility of interrupting the flow of the real customer day-to-day business or banking activities, commonly known as creating a false positive.

Identifying fraud based on indicators such as unexpected devices and geolocation, anonymous IPs, and failed login attempts, has become common practice. As fraud tactics evolve in sophistication, fresh and innovative approaches are required to ensure organizations keep an ever-discerning eye on customer experience.

Incumbent fraud detection solutions focus on identifying fraudulent behavior, while more advanced technologies focus on identifying the real customer versus the fraudster. For example, Account Takeover is a significant tactic in the world of fraud - a fraudster may easily gain knowledge of a user’s ID, password, account number and so on, appearing as a legitimate customer. This is based on what the fraudster knows.

However, the opportunity to change the game surrounds the differences in behaviors each user exhibits. These subtleties, unique to the individual and their specific interaction, can now be captured, recorded and compared. Collecting an individual customer’s behavior provides data capabilities to specifically identify who the customer is.

The ability to know your customer aids in reducing friction while vigorously preventing fraud. When an organization can quickly identify their valued customer, they reduce the likelihood of a false positive.

KNOW YOUR CUSTOMER

As financial organizations seek to provide a paramount banking experience, customer expectations of seamless interactions must be met. With the surge toward digital banking and shuttering of retail branches, understanding the digital needs of the consumer becomes top priority. Financial organizations can no longer rely on face-to-face banking interactions for context and history. They must provide the digital banking user with a personalized experience while enabling the bank measures to intercede if the individual exhibits fraudulent traits and/or activity.

To succeed, the industry must understand their user by gathering and analyzing key data to develop relevant long-term relationships. Behavioral Biometrics takes advantage of the rich behaviors exhibited by each individual user. Such knowledge, when properly captured, builds an individual profile so unique that it is no match for a fraudster’s knowledge. The fraudster would quickly be spotted and stopped in their tracks.

Consider the path of a more agile user in adding a new payee in their account - this is likely a different approach than that of an elderly person to accomplish the same activity. From navigational path, speed of completing the forms, research performed before starting the task and many other details, each is highly user-specific. In any case, there tends to be specific interactions a trusted user performs which a fraudster does not. Users are unique - the mannerisms of fraudsters are unique to those of their victim.

REDUCE UNNECESSARY FRICTION

Organizations are eager for better data and insights to reduce fraud and friction accompanied with the customer experience. A real-time, 360-degree view of each unique customer session is required for an accurate end-to-end view of the customer journey. This strategic approach enables organizations to enhance the customer experience across all channels. Singular insight from touchpoints aggregates relevant company-captured customer interaction data across multiple channels and from all available data sources.

A 360-degree view of the customer allows the organization to form a more detailed, trusted one-to-one relationship with the customer. This knowledge allows the financial institution to know an eCommerce customer normally makes purchases in the evenings and weekends, while a different banking customer performs bill pay activity predictively on their payday. With this knowledge, an engagement approach can be shaped to eliminate attempted fraud, reduce customer friction, and accelerate the process.

By aligning touchpoints, organizations can build a holistic view in real-time of who the customer is, why they are there, what they are trying to do, and what has been done before. The organization also knows navigation patterns, timing and frequency of engagement, where they are located, how they end their sessions and more.

This 360-degree view of the customer enables organizations to view customer behavior patterns and provides the chance to appropriately intervene when required. By applying this new approach to gauge at-risk customer responses, organizations can determine which interventions create the best reactions from customers. Further, customer advisors and fraud prevention teams can replicate these actions for similar at-risk customers in the future.

After all, what does every customer want? An easy online experience.

Organizations who have the ability to update, analyze and compare every interaction in real-time, have the opportunity to know their customer. Celebrus FDP and Behavioral Biometrics provides the opportunity in real-time for a more positive and safe customer digital experience.

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