How to Combat Digital Account Opening Fraud

digital account openingOffering forward-thinking services like digital new account openings is a great way to improve your credit union's conversion rates, empower the user experience, and attract the attention of a younger and technologically savvy group of potential members--all at the exact same time.

However, that doesn't mean there aren't certain elements you have to concern yourself with--fraud being chief among them. To help reduce potential digital new account opening fraud as much as possible, there are a few key best practices you'll want to follow.

The First Step to Fighting Fraud: Learn About FLEX ID Scan HERE!

Be Mindful of Uploaded Documents

One efficient best practice to use to help combat digital account opening fraud has to do with requesting members to upload certain verification documents as a part of this process.

Keep in mind that you're trying to strike a delicate balance here. The reason why people will embrace digital account opening in the first place is that it is fast and easy. Therefore, you don't want to undo that goodwill with a lengthy document upload process. Still, you should have members upload documents that verify their identity, which can then be authenticated to help weed out those with malicious intentions.

The Power of Social Security Number Verification

Another way to reduce digital account opening fraud has to do with consent-based Social Security number verification. The SSA is in the process of building a new electronic Social Security number verification system that will allow certain applicable organizations like credit unions to accept consent from members electronically.

Once such a solution becomes available, it will be a viable way to proactively stop attempts at digital account opening fraud while adding as little friction to the process for legitimate members as possible.

Pay Attention to How Real Users Behave

Finally, you should always make an effort to fully understand how real users behave during the digital account opening process. Machine learning, artificial intelligence, and similar tools--like behavioral biometrics and analytics--can be trained on the real, verified data that your legitimate members are constantly creating. That way, they can come to "understand" what a normal digital account opening looks like.

At that point, once the conditions deviate outside the accepted definition of "normal," human employees can be notified immediately to verify whether it is a simple matter of someone having an issue with the process or if something more nefarious is going on.

The best part is that once these legitimate member activities are fully understood, "intent" signals can be created in real-time. A new account will be flagged immediately, likely while the process is still going on. Someone can then make a proactive determination about what to do next, as opposed to being forced to wait for fraud to happen so that it can then be reacted to later on.

Not only does this help to reduce digital account opening fraud, but it also frees up the valuable time of human employees so that they can spend less time on manual reviews and focus more of their attention on those essential matters that need them.

An Easy Step to Battling Fraud: ID Scanning with OCR 

To help you get started, FLEX demonstrates how this technology allows credit unions to validate, extract data and inspect documents conveniently from smartphones or tablets. It helps onboard members faster, streamlines the onboarding process, as well as helps reduce fraud. Click below to learn more!

FLEX ID Scan with OCR

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