How to improve end-to-end customer life-cycle management through data science
In today’s digital world, identity verification is becoming increasingly important as the threat of identity fraud continues to grow. In 2017, there were more than 1,200 data breaches, with more than 2 billion separate identities stolen. Already in the first half of 2018, identity theft and synthetic identity attacks have more than doubled from Q4 of 2017. Traditional identity verification uses static rules and linear models applied to credit bureau data, which is often stale and easily accessible to fraudsters because, if we’re being honest, your birthday, Social Security number, and mother’s maiden name have already most likely been leaked in some previous data breach. So with these kinds of numbers, it’s clear that companies must rethink how best to originate user accounts online and develop new approaches for verifying their users.
Socure SVP and Co-Founder Johnny Ayers and Simility CTO and Co-Founder Kedar Samant recently hosted a webinar to discuss their coordinated machine-learning approach to managing the customer life cycle from account origination to device fingerprinting on-going transaction and authentication monitoring. In a case study discussed in the webinar, the two companies had joined forces to improve a customer’s auto-approval rate from 62% to 83%, decrease fraud losses by 80%, and cut KBA usage by 70%. In short, the combined machine learning approach works to improve automation and efficiency when verifying and approving users, thus reducing friction and also minimizing the approval of fraudulent accounts.
Samant notes that there are three chokepoints in the user life cycle: account origination, authentication, and transactions or fraud prevention. Simility takes information such as historical user data, behavioral analysis, device data, and PII checks to determine a user’s credibility in the account origination approval process.
Then, Simility relies on Socure’s technology to handle the user’s identity verification. Socure’s patented identity verification robot, Aida, does this by sourcing an enormous amount of consumer-related information across a user’s entire identity, including the trails that real people leave on the internet.
“Every consumer leads a very digital life. We email, text, post, create cookies—and this leaves a huge amount of digital breadcrumbs about normal, good consumers,” Ayers says. Aida correlates all of these “breadcrumbs” across thousands of attributes to create a holistic and accurate view of a customer’s identity. By the same token, fraudsters won’t have a lifetime’s worth of connections and attributes on the internet or elsewhere, and Aida will be able to differentiate between the real Johnny and someone that’s pretending to be.
“This allows us to more accurately classify good versus bad consumers, which only machines can do, versus human intuition alone,” Ayers says. Indeed, Socure’s Aida has typically provided a 60-85% reduction in identity fraud losses, and decisions that are 10 times more accurate than a legacy credit bureau’s. The Aida technology also delivers over 70% reduction in friction from manual review of users’ applications. This is particularly important when it comes to approving the accounts of millennials, members of Generation Z, or immigrants, who may not have any credit and thus don’t seem “real” to the credit bureaus.
For Simility, Socure’s identity assurance is a vital part of the puzzle. Once the identity verification is complete, Simility is able to add its device profiling technology to make a decision for approval.
“Verifying user identity is the most important part of account origination,” Samant says. “Our partnership with Socure helps both of us provide a solution to onboard customers; we do the risk profiling of identity using Socure and then do the overall orchestration for onboarding workflow using Simility.”
The trend in identity fraud is moving away from existing accounts and toward account origination. That’s because stolen data is a goldmine for fraudsters to attack at new acquisition, and identity theft at the point of new account opening has doubled or tripled in recent years.
Watch the Socure + Simility webinar on how to prevent fraud at account opening and improve the end-to-end customer life cycle here.Learn more about how Socure partners with companies to amplify their analytics for identity verification and fraud.