fraud prevention - experian

1©2015 Experian Information Solutions, Inc. All rights reserved.Experian Public.

Fraud &

Ident i ty

Chal lenges


Online trends are shifting the way our clients conduct business

36%of U.S. organizations interact

with customers in five or more channels.

87%Feel upset, frustrated or betrayed when an online transaction is declined

10,000Estimated number of fraud

rings in the U.S. alone

2 BillionThe number of records exposed as a

result of data breaches in 2014

Source: 41st Parameter, Measuring Consumer Attitude on CNP Credit Card Declines (December 2013)

Source: Experian, The 2013 Digital Marketer (2013)

Source: Risk Based Security/Open Security Foundation, Data Breach Quick View (February 2014)

INDUSTRIALIZATION OF FRAUD RISE OF OMNI-CHANNEL

DATA BREACHES CUSTOMER INFORMATION


Evolving e-commerce space needs to protect online consumers

Source: Experian, The 2013 Digital Marketer (2013)Source: Cybersource 2013 Online Fraud Report (2013)

35%Year-over-year growth in mobile commerce

Mobile payment options used by smartphone owners

5%Waving the phone at a

payment kiosk

11%Direct mobile

billing

14%Mobile Web payments or

WAP

15%SMS text

message to a business

2xThe international

fraudulent order rate compared to the

domestic rate

Source: 41st Parameter Study (December, 2013)

InternationalDomestic

Combined Mobile20%

EVOLUTION OF PAYMENTCROSS-BORDER COMMERCE

MOBILE COMMERCE

Non-mobile

Smartphone

Tablet

Non-Mobile85%

Non-Mobile80%

Combined Mobile15%

10%5% 8%

12%


Consumers are being targeted – by everyoneThe number of identity data sources is growing

V E H I C L E R E G I S T R AT I O N

D E M O G R A P H I CD ATA

C R E D I T I N F O R M A T I O N

C H E C K I N G & S AV I N G S

A C C O U N T S

S O C I A L S E C U R I T Y

I NT E R NE TT R A N S A C T I O N S

PROFESSIONALASSOCIATIONS

M E D I C A L R E C O R D S


How does this impact client-centric fraud strategies?

Reduces complexity of customer interactions and increases straight through-processing

Promotes compliance with (KYC) Know Your Customer policies and regulations

ENTERPRISE VIEW INCLUDING TRANSACTION

& IDENTITY RISK

IDENTITY ELEMENT VALIDATION AND VERIFICATION

Tailored compliance-oriented decisioning strategies

Ability to recognize devices used by customers providing a safe and effective customer experience

DEVICE INTELLIGENCE AS AN INTEGRATED CAPABILITY

Apply analytics to instantly quantify risk with behavioral pattern detection and predictive scoring

KNOWLEDGE-BASED AUTHENTICATION (KBA) JOINED WITH ANALYTICS

CUSTOMER EXPERIENCE DRIVING ROI

Limit friction by leveraging existing information and risk-based authentication

Effectively assess risk across all channels Minimize exposure and accelerate resolution

in event of a data breach


AuthenticationCurrent and future state

IDENTITY,DEVICE& ACCOUNT DATA



RESULTS AND/ORDECISION

CONSUMER ALERT

CONSORTIUM DATA

CLIENT FRAUD ALERT TRIGGERS

CONSUMER AND CLIENT CONFIRMATION OF FRAUD ACTIVITY

CONSUMER OR CLIENT-INITIATED

ACQUISITION OR ACCOUNT TRANSACTION

AUTHENTICATIONPLATFORM

PII data verification Identity transactions

and link analysis Analytics Knowledge-based

authentication Decisioning


Fraud &

Ident i ty

Capabi l i t ies


Using risk-based authentication to combat fraud

Reduce fraud while increasing straight-through processing and quality of interactions across all channels

IDENTITYVERIFICATION

RISK-BASED AUTHENTICATION

DEVICE INTELLIGENCE

AND RISK

FRAUD CONSULTING

S T RAT E G Y D E V E L O P ME N T


Know your customerWhile delivering a positive experience

I D E N T I T Y V E R I F I C A T I O N

H O W W E H E L P Identity verification Out-of-wallet, knowledge-based

authentication Three factor authentication KYC (Know Your Customer)

compliance

V A L U E D E L I V E R E D Reduce losses from identity fraud Maximize straight-through

processing Improve customer satisfaction Improve staffing efficiency Ensure compliance

KNOWLEDGE IQSM

PRECISE ID® FOR

COMPLIANCE

PRECISE ID® FOR ID SCREENING


Identity verification

PRECISE ID® FOR COMPLIANCE KNOWLEDGE IQSMPRECISE ID® FOR ID

SCREENING

SINGLE-PLATFORM, HOSTED solution that operates across product lines, enabling robust fraud prevention and consumer authentication

EFFICIENT WORKFLOW via streamlined and relevant output specific to identity element verification

COMPREHENSIVE AUTHENTICATION with out-of-wallet questioning

Delivers REAL-TIME OR BATCH IDENTITY authentication services over customer lifecycle process points

FRAUD SHIELDSM indicators and high-risk condition warnings

SINGLE-PLATFORM, HOSTED solution

Delivers REAL-TIME OR BATCH IDENTITY authentication services over customer lifecycle process points

Identity and identity element validation and verification results via PRECISE MATCHSM

DETAILED REPORTING and consultative resources

DEVICE INTELLIGENCE and risk assessment, evolutionary platform

KNOWLEDGE-BASED authentication as part of layered, risk-based authentication strategy via a SINGLE SaaS PLATFORM

USE OF EIGHT DATA SOURCES, providing multiple categories of questions to authenticate identity and prevent fraud

Consultative approach to OPTIMIZE KBA (Knowledge-Based Authentication) through performance monitoring and analysis

HIGHLY CONFIGURABLE to address business needs, FLEXIBLE to adjust as needs evolve


Summary &

Next Steps

Precise ID® for ComplianceHow it works

PRECISE ID® FOR COMPLIANCE

An integrated component of the Precise ID platform solution that brings together identity element validation and verification, and GLB (Gramm-Leach-Bliley) - compliance authentication and decisioning, into a single process to measure the risk of identity and first-party fraud.

ACCEPT

REFER SUMMARY MATCH RESULTS DETAILED RECORD INFO CREDIT PROFILE

HIGH-RISK INDICATORS

CONSUMER DEMOGRAPHIC

DATA

EXPERIANFILE ONESM

DATABASEINQUIRY

PUBLIC &PRIVATE

DATA

PRECISE ID RULES ENGINE

C U S T O MD E C I S I O N

RESULTS

APPROVE

REFER

P R E C I S E M A T C H


Knowledge IQSM How it works

Q U E S T I O N S G E N E R AT E D

PASS

NAME + ADDRESS MORE INFO AS AVAILABLE

P E R F O R M A N C E R E P O R T I N G

A dynamic identity tool that evaluates true consumers by questions generated from a wide dataset of personal information and is used in combination with an identity-based risk score..

D E C I S I O N

KNOWLEDGE IQSM

S C O R E & Q U I Z E VA L U AT E D

WEBSITE

CALL CENTER

FACE TO FACE

NO PASS


Defend individualsFrom identity and card theft

R I S K - B A S E D A U T H E N T I C A T I O N

H O W W E H E L P Surveillance for unauthorized use

of identity information Lost or stolen wallet protection Change of address monitoring Daily monitoring of credit reports

with alerts when key changes occur Dedicated fraud resolution team

V A L U E D E L I V E R E D Reduce risk of identity theft Receive protection against losses Protect your reputation Reduce exposure and accelerate

resolution in the event of a breach

KNOWLEDGE IQSM

PRECISE ID® FOR ACCOUNT OPENING

BizIDSM

IDENTITY ELEMENT

NETWORKSM


Summary &

Next Steps

Precise ID® for Account Opening How it works

PRECISE IDSM FOR ACCOUNT OPENING

An integrated component of the Precise ID platform solution that brings together identity element validation and verification and Fair Credit Reporting Act (FCRA)-compliant authentication scoring and decisioning into a single process to measure the risk of identity and first-party fraud.

P R E C I S E M A T C H

PRECISE MATCHSM CODES

HIGH-RISK ATTRIBUTES

INTERNAL CHECKS

EXTERNAL THIRD PARTY CHECKS

RISK SEGMENTATION

& DELIVERY

S C O R E G E N E R AT I O NGLB DATA

REAL-TIME SINGULAR INQUIRY/ RESPONSE

BATCH AVAILABLE

PRECISE ID DECISION

APPROVE

REFER

CAN BE COMBINED WITH FRAUDNET

A D D I T I O N A L C H E C K S


Precise ID for Account Opening Key benefits

Streamline new account opening processes with increased verification efficiencies while minimizing fraud loss with an early warning service and meeting

compliance requirements

Gives a more accurate and holistic picture of consumer/ applicant

Provides early warning of risk of identity alteration or inconsistencies

Receive summary-level match results related to identity elements

Targets identity theft and potential first-party fraud and non-payment risk using credit/non-credit data

Quick implementation via Web-user interface

Integrate seamlessly with internal or consumer-facing platforms via XML

XMLXML XML

Receive authentication, identity theft and first payment default scores

560

630700


Precise ID for Account Opening Capabilities

Precise ID for Account Opening uses both credit and non-credit data assets

CAPABILITY PRECISE IDSM FOR ACCOUNT OPENING

Identity element validation and verification Fraud ShieldSM high-risk indicators Hosted decisioning Wireless phone verification IP address verification Knowledge IQSM questions Historical inquiry records checks Authentication score Identity theft score First payment default score National Fraud DatabaseSM Early Warning Services shared fraud and account abuse records

Functionality using credit and non-credit data assets


I D E N T I T Y T R A N S A C T I O N N E T W O R K

Identity Element NetworkIdentity Transaction Network

Adding over two million identity transaction records daily

Comprehensive link analysis to derive attributes and score

Contains up-to-date transactional data

Built from Experian data

Capture consumers’ identity elements

Retain records 24 months for identity historical view

Score –portfolio/ batch segmentation


Improve detectionReduce false positives, customer frustration & lost sales

D E V I C E I N T E L L I G E N C E & R I S K

H O W W E H E L P Application and open account fraud

detection Automated risk assessment and

issue resolution Case management, archiving,

searching link analysis and data visualization tools

V A L U E D E L I V E R E D Reduce fraud losses, bad debt and

revenue leakage Improve the quality of the customer

experience with straight-through processing

Avoid lost sales from false positives and abandonment

Reduce referrals and manual reviews

DEVICE INSIGHT™

FRAUDNET

TRUST INSIGHT®


Device intelligence and risk

DEVICE INSIGHT™ TRUST INSIGHT®FRAUDNET

INCREASE customer satisfaction, retention and LTV – turning first-time customers into trusted customers

Network effect of POOLED DATA

DECREASE COSTS of investigations and handling by decreasing order ship time (OST), touch rates and operational costs of investigations

Countermeasure to CNP losses – POST EMV CHIPS & PIN

DEVICE LAYER enables velocity rules, negative lists and detection of aggressive devices

INCREASES detection rates (bad devices) and DECREASES false positives (good devices)

Works across ALL DEVICES and ALL OPERATING SYSTEMS

IMPERCEPTIBLE to fraudsters

Meets FFIEC requirements and does not collect PII data

Ability to detect fraud ON FIRST ATTEMPT

INCREASES top-line revenue

UNPRECEDENTED VISIBILITY to online activities.

MULTI-LAYERED SECURITY dramatically reduces false positives and improves detection rates in challenging environments

Detects nearly 100% of certain SOPHISTICATED ATTACK TYPES

.


FraudNetHow it works

ULTIMATEDEVICE INTELLIGENCE

ACCURATERULES ENGINE

SOPHISTICATEDLINK ANALYSIS

POWERFULINVESTIGATOR WORKBENCH

Market leading enterprise fraud management solution with a highly accurate, device intelligence platform to detect fraud by linking event traffic.

FRAUDNET


FraudNetFeatures

ULTIMATEDEVICE INTELLIGENCE

ACCURATERULES ENGINE

POWERFULWORKSTATION

Flexible & CONFIGURABLE

Enables BETTER decision making

3rd party data with FULL audit trail

LINK analysis tools

Highly ACCURATE, high performance

STRATEGY driven risk models with over 500 rules

USER configurable

Effective across ALL internet channels – OS & browser agnostic

PRIVACY compliant (no PII), frictionless, tag-less and covert

PATENTED technology


Complex to Confident in action

Improved audit trail satisfies

regulatory compliance

Booked accounts

increased by 2-3% of the

portfolio

Streamlined, consistent

authentication system

enhances efficiency

40% reduction in manual

verification of identity

discrepancies

S O L U T I O NExperian’s Global Consulting Practice and Precise ID platform.

Intelligent automation made processing more efficient to identify false positives

A financial company needs to simplify its verification system

25% of customers require manual verification

Delays due to this process caused the loss of significant customers

B U S I N E S S C H A L L E N G E

fraud prevention - experian

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