Sadly, fraud is a fact of everyday business. Managing this risk is an essential cost that companies and financial institutions alike must include in their budgets.
In recent news, Credit Unions and other financial institutions in Ohio (USA) have experienced recent fraud cases associated with online loan applications. Based upon industry studies (see references below), new account fraud within all segments of the loan portfolio is increasing rapidly.
The fraudster in this case was applying online, and apparently had a high credit score rating with few debts. The fraudster was typically requesting a loan of several thousand dollars, and would be quick to accept a lower approval. The fraudster would execute the paperwork and then immediately submit a claim of identity theft with the credit bureaus.
Turn Fraud Detection Into a Commercial Advantage
Digital lending and onboarding fraud has been a continuing issue credit unions are trying to combat.
New account and loan workflows coupled with the credit union branded ID-Pal application creates a comprehensive solution for combating identity verification fraud. In fact, the ID-Pal platform can be extended to any channel (online/remote, in-branch, trusted partner/broker) for managing and deterring fraudulent onboarding and loan application activity.
Leveraging the ID-Pal platform means applicants must provide identity document detail, and produce a liveness test that would be analyzed using extensive verification checks prior to completing the online loan application.
If your credit union is encountering similar fraud challenges, please keep in mind that Sherpa can enable the ID-Pal platform quickly without a full integration into a core platform or digital experience.
AN OVERVIEW OF ID-PAL’S VERIFICATION CHECKS
The ID-Pal platform runs a suite of advanced technical checks against every customer submission to ensure that identities are thoroughly authenticated and verified. Your business is protected from fraudulent identities that have been tampered with or forged.
- Facial Match – Biometric face recognition captures face biometrics and matches it to the face image on the driver’s license or passport
- Liveness Test – Gesture analysis and eye blink tracking detects a live person
- Pattern Match – Checks documents for irregularities in visible and overlay patterns as well as laser perforation based on authentic documents
- Data Crosscheck – Verifies that data across different sources matches-Le. human- readable data, machine-readable data, contactless chip data, barcode data .etc.
- Relative Layout Verification – Confirms that elements of a document are in the correct position relative to each other
- MRZ Digit Check – Checks run against the Machine-Readable Zone digits
- Photo Substitution Text – Tests that photos are an authentic element of the document and have not been tampered with or forged
- Custom Authentications – Unique tests done on specific document types
- Authentication of genuine microprint text & security threads
- MRZ & Visual Inspection Zone comparison
- Optically Variable Devices test for state seals & holograms
- Geometry test on document features
Contact Sherpa Technologies to Start Your Journey
Further Reading / Reference
#onlinefraud #identitytheft #CustomerOnboarding #IdentityVerification #KYC #AML #fintech
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By 2020 80% of all accounts will be opened online. In a crowded marketplace, how do you choose which is the best option for your business? In the next blog we detail why ID-Pal is the best identity verification experience for on-boarding new customers.
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