Jason Dietrich

Use data to provide a personalized experience

But beware of increased threats of fraud.

October 30, 2018

Consumers want a personalized experience, whether it’s when they’re shopping online or heading to the credit union to apply for a loan.

But providing that personalized experience means credit unions have to gather more data to determine what their members want. Data also brings with it the increased threat of fraud.

“Identity and fraud are two of the things that are adding to the complexity,” says Matt Ehrlich, senior director, product management, at Experian.

Consumers understand that providing additional personal information will be beneficial in obtaining a better personalized experience.

Seventy percent of consumers are willing to provide additional financial information to a lender if it increases their chance for approval or improves their interest rate, according to Experian research.

“There’s not a whole lot of resistance from consumers when it comes to being asked about these things,” says Jason Dietrich, director at Experian. “People are becoming more and more aware of identity fraud and know that it’s out there.”

But data also poses additional threats that credit unions need to be aware of, Ehrlich says.

Fraudsters are using data in new ways to create identity and fraud threats, such as synthetic identities, identity manipulation, identity takeover, new account fraud, existing non-card fraud, and a shift from point-of-sale to card-not-present fraud, Ehrlich says.

With those threats in mind, Ehrlich says credit unions must make better decisions surrounding fraud and identity. He suggests five takeaways:

  1. Start with the assumption that personal information and other data has been comprised and that fraud is taking place.
  2. Use an omni-channel view across identities to combat sophisticated digital fraud.
  3. Design a fraud management program that is layered and contextually invoked. Rules and “signals” in isolation are not effective. “Don’t treat all of them the same,” Ehrlich says.
  4. Understand that looking to internal data only is not sufficient. Look at all types of data—both internal and external—to determine whether fraud is taking place. “Those need to work together,” Ehrlich says.
  5. Realize advanced analytics provide the biggest lift.