ndian finance firms more efficient then US companies in spotting frauds’ – Financial services companies in the country are twice as likely as US counterparts to detect a significant increase in identity theft in the past twelve months, says a report.
For nearly 62 per cent of the Indian firms, one of the major problems in fraud prevention and detection is that many solutions lack the flexibility to adjust in real time, according to a TransUnion Cibil Fraud trend 2018 report.
It said Indian firms also report more difficulty with the end-user authentication process, resulting in poor customer experience.
“Its clear that a major hurdle for decision makers in industries such as financial services and insurance is how to fight fraud while ensuring prospective customers have a good experience,” TransUnion Cibil’s managing director and CEO, Satish Pillai, said.
The findings are based on an online survey of financial services and insurance organisations in India, US, and Canada to evaluate the state of fraud detection and ID verification.
It was conducted by Forrester on behalf of TransUnion Cibil.
Consumers are demanding a better experience and those businesses that are not delivering on this are losing out to their competitors, Pillai said.
Around 75 per cent of the financial services firms in the country primarily measure the return on investment (ROI) of their fraud detection and ID verification solutions through improved customer experience.
One of the biggest problems identified by insurers is the verification of identities as fraudsters are exploiting weaknesses in the application process through three main types of fraud, identity theft, soft fraud and hard fraud.
While identity theft pertains to applying insurance or to file a claim using compromised or stolen identities, soft fraud involves deliberately altering or omitting information by applicants or policy holders to obtain a lower premium or misrepresent the value of a claimed item.
Hard fraud relates to applicants or policy holders deliberately staging a loss for financial gain.
“Customers are demanding exceptional experiences throughout the insurance process. This means that false alerts, detection, prevention procedures and the investigations that go with it can negatively impact their customer experience,” Pillai said.
He said while fraud is hard to eliminate completely, there are ways to alleviate the risk in the insurance industry.
“Its important for insurers to arm themselves with solutions that bridge the gap between customer experience and fraud prevention,” he added.