Credit Union Tech Time: Stopping new account fraud before it starts

first_imgAs credit unions pursue member acquisition objectives, they are enlisting more sophisticated marketing and onboarding techniques, and dealing with added competition from both financial institutions and emerging, non-traditional players. Credit unions also have to deal with rising new account fraud.A March 2016 Aite Group report, “Application Fraud Rising as Breaches Fan the Flames,” stated that, as a result of data breaches occurring in 2015, 477 million identity records were compromised. Many of these included consumers’ personally identifiable information—exactly the information fraudsters use to open new accounts to enable them to later perpetrate fraud.Aite Group’s report predicts that U.S. demand deposit account application fraud losses will total $466 million in 2016 and grow to $694 million by 2020. New accounts are opened by thieves to establish a baseline relationship with a financial institution and later commit deposit and/or credit-related fraud against it. The majority of the 88 financial institutions surveyed for the report indicated that application fraud is growing in the online, mobile and call center channels, with online fraud averaging eight times that of the branch fraud rate.This is alarming since, as a younger generation looks to form their financial relationships, more credit unions will deploy (if they have not already) online and mobile account opening and payment services. As this shift toward digital account acquisitions occurs, credit unions are challenged to manage the added risk. Delivering the optimal customer experience while mitigating fraud risk and determining if an applicant really is who he says he is has become increasingly challenging in digital channels. continue reading » 10SHARESShareShareSharePrintMailGooglePinterestDiggRedditStumbleuponDeliciousBufferTumblrlast_img

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