The digital transformation that has taken place in banking over the last decade is radically changing how customers interact with financial institutions. More and more customers are opening accounts on a smartphone, tablet or laptop, resulting in a growing emphasis on digital onboarding. According to Cornerstone Advisors, checking account openings in digital channels exceeded branch openings in 2019 and grew to 66% of the volume by the end of 2020.
Now, as digital account openings become more common, financial institutions face increasing pressure to detect fraudulent activity at the point of onboarding. “It’s more important than ever to know that the customer logging into your online banking application is who they say they are,” says Paramita Bhattacharjee, vice president and product line leader of risk insights for Early Warning Services, LLC. At the same time, she says, banks must also provide a way for customers to get through the application process quickly and with minimal friction.
One of the biggest hurdles financial institutions face while offering digital account openings is the ability to confidently validate a consumer’s identity. Without this knowledge, banks cannot make accurate decisions about whether they can do business with a particular customer, what privileges should be granted on the account or even what products should be offered. And with fraudsters becoming ever more sophisticated in beating customer identification programs, banks must deploy accurate and reliable solutions when it comes to identity verification.
The first—and most critical—step in the process is to confirm the information a potential customer is providing. These basic elements—name, date of birth and Social Security number—need to be matched against the ultimate source of truth – the Social Security Administration. Real-time Identity Chek® Service–New Account Scores from Early Warning Services can determine the likelihood that a customer is who they say they are, whether the customer submits the account application via a smartphone, tablet, laptop or in person in a branch. As a Trusted Custodian® over a unique cross-institution data set combined with sophisticated analytical and predictive scores that go beyond rules-based solutions, Early Warning provides both broad and deep coverage with insights into millions of transactions and identities.
The scores, key factors and summarized attributes garnered from this intelligence database, says Bhattacharjee, give financial institutions the kind of insight they need to open accounts confidently and tailor account offerings while reducing the chance of fraud losses in the process. It also allows them to do this without undue friction.
“Recent research from The Financial Brand’s Digital Banking Report found that unless a financial institution can open a new account or complete a new loan application in less than five minutes, the potential for the customer to abandon the account opening increases to 60% or more,” she says. “Alternatively, faster account openings reduce abandonment rates to almost 25% or less.”
Verifying that a customer is who they say they are is only the first step in staying ahead of fraud during the account opening process. Financial institutions must also be on alert for application fraud and synthetic identity fraud. Application fraud involves the use of false information to open an account with the intent of engaging in criminal activity. In synthetic identity fraud, the account opener uses mostly factual information, but then slightly manipulates either a Social Security number or date of birth to avoid detection, or to hide from a previous bad credit history. Bhattacharjee says that, according to research from the Aite Group, synthetic identity fraud is one of the fastest-growing types of financial crime in the U.S.
Real-time Identity Chek Service from Early Warning enables financial institutions to determine a valid identity in real-time as well as determine the likelihood of potential losses within the first nine months of an account opening. Its ID Confidence score gives banks the ability to better detect both synthetic and manipulated identities and determine whether an applicant is presenting their true identity.
“It is ultimately the responsibility of the financial institution to open the account or not,” Bhattacharjee says. “But we are giving them the data and recommendation of whether we believe that person is who they say they are—and, further, whether they are going to default due to first-party fraud within nine months or whether that consumer will default due to account mismanagement within nine months.”
The pandemic may have accelerated some of the fraudulent activities that banks are experiencing today, but it’s clear that digital account openings will continue long after the pandemic is over. Early Warning’s technology gives banks the confidence to expand their customer portfolio by helping them verify identities quickly, accurately and in a way that keeps both banks and their customers safe, secure and happy.
To learn more about top fraud trends in the new account opening process, you can view this on-demand webinar here.
Dave says: If you need a cosigner, you're not ready – Northeast Mississippi Daily Journal
How to improve your credit score in 2021: Easy and effective tips
If you’ve ever wondered “What is my credit score?” it’s probably time to find out. Having a good credit score can make life a lot more affordable. If you’re about to buy a house or car, for example, the higher your credit score is, the lower your interest rate (and therefore, monthly cost) will probably be.
Your number may also be the deciding factor for whether or not you can get a loan and ultimately determine if you are even able to buy something you want or need.
So, yes, the goal is to have the highest possible credit score you can, but increasing the number doesn’t just happen overnight. There are important steps to take if you want to increase your score, and the sooner you start working on it, the better.
“If you’re trying to increase (your credit score) substantially to accomplish a goal, you’re really going to have to have as much lead time as possible,” said Thomas Nitzsche, director of media and brand at Money Management International, a nonprofit financial counseling and education provider that advises people on how to legally and ethically improve their credit score on their own.
If you have fair credit and you’re trying to improve the number for a house purchase, for instance, you’ll want to start working on it at least a year in advance, he explained to TMRW.
But even though that sounds like a long time away, you can (and should!) start doing things right now to bump that number up. Below, see seven things you should do — and not do — to help improve your credit score:
1. Review your credit report
The first thing you’ll want to do is pull up a copy of your current report so you know where you stand. You can get free reports from all three agencies — TransUnion, Experian, and Equifax — at annualcreditreport.com. Nitzsche said it’s important to take a moment and understand the financial snapshot of where you are today and where you want to be.
You’ll also want to take some time and look for any errors on your report, which could negatively impact your score. “If your name is misspelled, that’s not going to hurt your score,” he explained. “But if you see a late payment or missed payment (that’s in error), or maybe you have an account that should be reporting but isn’t, then that’s a problem and that will impact your score.”
If there is an error, you should dispute it and try to provide as much proof as you can.
One other thing: You can also ask a creditor to remove an issue if it’s been corrected (i.e., if you paid off a collection debt). Nitzsche said it doesn’t hurt to ask and the worst thing they could say is no.
2. Have good financial habits
“The biggest part of your credit score is payment history, so the most critical thing is never missing a due date,” Nitzsche said. Set up a monthly autopay or add all due dates to your calendar so you never miss a bill.
You can also achieve a higher score when you mix different types of accounts on your credit report. It may seem counterintuitive to get extra points for having debt in the form of student loans, mortgages and auto loans, but as long as you’re paying them off responsibly, it shows that you’re reliable.
3. Aim to use 30% or less of your credit at any given time
Know your credit card limit, and try not to use any more than 30% of that number each month, otherwise your score could lose points for too much credit utilization.
Another thing you can do is ask your bank to increase your limit. “That will give you more flexibility to spend more,” Nitzsche said. You could also pay it off twice a month to keep the balance low. But he does warn that you never know when the balance is going to be reported to the bureau. It can happen at any point during the month, so it might be the day after you make the payment or the day before. “You don’t necessarily want to use the card and pay it the next day because that doesn’t give the bureau the chance to know that you’re using it,” he said.
4. Avoid requests for new credit
If you’re looking to increase your score around the time you want to buy a house or car, you won’t want to open up a new line of credit, like a retail card, credit card or loan. That’s because “hard” credit inquiries like those can lower your score, and sometimes it comes down to a few points over whether you’re approved or what your rate will be, Nitzsche said.
“Soft” credit inquiries, like when an employer checks your credit or when you pull your own report, won’t affect your score.
5. Keep all accounts open, even ones you don’t use anymore
Even if you don’t use that credit card from college, it’s a good idea to just keep it open because closing it could hurt your score. Nitzsche explained that you’ll be dinged some points for each account that is closed. If you want or need to mentally break up with a card, just cut it up instead.
6. Build your credit if needed
If you haven’t established credit yet, you might not even exist … in the credit report space, that is! “If someone has never fallen in delinquency on any subscriptions or utilities or never had collections on anything and they have not utilized credit cards or loans in the past seven to 10 years, they may not have a credit profile at all,” Nitzsche said. “That presents a challenge when you want to buy a home.”
If this sounds familiar, you may have to get a secured credit card where you put down a deposit, he advised. “You still have to make payments and use it responsibly. Not all banks offer them but you can usually check with your local bank or credit union.”
7. Reach out for help
There are many apps and credit-monitoring services that can help you stay on top of your credit score. You could also reach out to a professional credit counselor who can help you navigate your specific situation. (Here’s a good resource about finding a reputable service.)
One last thing: Nitzsche warned that everyone should beware of credit repair scams that claim to be able to increase credit scores for an advance fee to get accurate negative information removed (even temporarily) from credit reports.
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