In the first session we’ll discuss the nature and scale of online fraud in complex, high-value transactions and the types of businesses most likely to fall victim to it, and whether they are doing enough to mitigate this risk.
1. Understand the implications of current Customer Onboarding processes that are not joined up
2. Manual interventions to bridge process and silo gaps means greater opportunity for fraud
3. Regulated Sectors have the greatest challenge and need (also the biggest opportunities)
About this Session:
This session introduces the types of fraud commonly encountered and explores in detail the particular challenges of human-advised, or increasingly robo-led, customer interactions in the context of new client engagement and initial purchase commitments.
“…every Industry where clients are engaging in transactions worth thousands of pounds or more”
1. Current problems
In England and Wales alone, there were at least 5 million fraud and cyber crimes last year – equalling all other crime in total.
Fraud threats come from many directions, many of which are difficult to assess as friend or foe:
And it’s set to grow.
Industries with ‘advised purchases’ or ‘complex services’ have many types of fraud, committed on both sides of transactions, which can be attributed in part to:
• Over-zealous mis-selling (e.g. the banking PPI scandal)
• Loss exaggeration by insurance claimants
• Amended payments via identity theft in loans and mortgage applications
But there are many more causes and types of fraud:
2. Why can new client on-boarding be a challenge?
There’s always much new information to both collect and distribute during the early stages of any new relationship. In regulated sectors, the context and format of such information is subject to strict rules and governance. For example, anti-money laundering legalisations clearly define that before a financial transaction can be completed, the client must complete an identity check. However, this can cause delays and additional costs.
Implementing sufficient safeguards to protect the provider is a challenge when the fraudsters are using increasingly sophisticated techniques. It’s the transacting organisation’s responsibility to protect the interests of both the client and supply chain, while also discouraging fraudsters.
Regulators insist on an appropriate level of documentation to protect all stakeholders. However, organisations too often have multiple touchpoints with multiple departments, handoffs, document types and formats. Compounding this complexity, each department may also use its own data store and use different tools for collaboration and customer communication.
For example, the typical documented process for a financial advisor’s new customer interactions might include the following stages:
Done manually, with some paper use or disconnected digital systems, it makes the process slow, costly and fraught with compliance risks for the business, while infuriatingly unresponsive and repetitive for the prospective new customer. No wonder we see challenger businesses that adopt new working methods growing faster than incumbents in many regulated sectors.
3. Issues: abandonment, data silos, inactivity
Clients can become so frustrated with traditional long-winded onboarding and KYC/AML processes that it increasingly leads to them abandoning the whole relationship.
Businesses that can encourage simple one-session completion tap into a competitively differentiating advantage. But this has to be well designed to ensure that it is also fully compliant.
Ideally, we want no data silos, with information available to staff when required. That needs a customer-centric system view and robust but easy-to-use KYC processes. These may be used for one-off specific financial transactions, such as a loan application, or be ongoing using data captured during onboarding (eg, biometrics) for repeated secure and simple interactions years after initial KYC.
However, the biggest threat of all may be that to which most organisations conform: adapting too slowly to transformation before customers are lost. This risks the entire business, as customers’ expectations rise exponentially and regulators demand more.
1. Immature systems with complex B2C transactions over £1000 have the highest risks
2. Focus on Compromised Data/Documentation, Misrepresentation and Impersonation
3. Solution platforms can avoid risking the business due to transforming too slowly
A free to use tool has been included on each of the next 3 videos for a limited time.
Transform your and your Customer’s regulated Documents experience – ask how.