More account openings are taking place through digital devices and online, giving the access and anonymity fraudsters need to steal or fabricate identities. Since credit fraud often starts with a falsified application, it makes sense to have strong tools to monitor loans and credit lines from that point onward.
SAS, a global leader in analytics which has over the years developed innovative software and services that empowers and inspires customers around the world to transform data into intelligence recently partnered with Redington Value, a subsidiary of the India-based Redington Group to provide on-the-ground support to customers in East Africa.
Out of the several benefits in the SAS-Redington partnership is the inevitable journey of taming fraud by scaling up early detection through analytics purposed to redefine the odds of discovering banking application fraud within the region,”
David Cosgrave, SAS Pre – Sales Director – Africa
“Out of the several benefits in the SAS-Redington partnership is the inevitable journey of taming fraud by scaling up early detection through analytics purposed to redefine the odds of discovering banking application fraud within the region,” said David Cosgrave, SAS Pre – Sales Director – Africa.
According to Cosgrave, Credit application fraud which has been quite rampant has often been orchestrated in different flavors, but virtually all involve the submission of false or manipulated information to influence credit decisions, a situation that in essence, effectively worries any credit granting organization doing business online.
Citing a scenario where a man walks into a branch of a bank that issued him a good credit card as per the records and has since used it to make minor purchases and further repaid small cash advances swiftly and consistently it worries when it all emerges that the same card turns out to be one squarely used to defraud the money lender.
How it happens
Cosgrave notes that on a visit to a money lending firm, the man requests the maximum cash advance permitted on his high-limit card. The teller obliges and hands the man several thousand dollars. Before he even reaches the door of the lobby − poof − the man and the cash vanish into thin air. Apparently he was just a hologram all along – an occurrence that appears like a movie but in reality happends virtually daily and easily in the digital world. The challenge adds Cosgrave is that the fraudsters create an identity, use it to steadily build history and trust − then make the big score and disappear poof in the thin air.
The financial services industry is seeing a rise in this kind of disappearing act, for several reasons which Cosgrave attributed to more account openings with overdraft, credit cards and other extensions of credit which conduct transactions through digital devices and the internet, which provide the access and anonymity yearned by fraudsters.
In addition, Cosgrave cited that data breaches expose large volumes of personal data for fraudsters to exploit and there seems to be no real privacy for personal information anymore in the virtual world, an area that SAS has dedicated its efforts to solutions that would tame fraud through predictive analytics and living to its billing of giving people the power to know.
The challenge to this process also relates to the pressure to render real-time decisions on loan applications (or lose the business to a lender who will) cut short the time available for thorough due diligence on a customer.
Specious identities in credit fraud
In an effort to bust-out fraud which often conducted online and quite regularly start with identity theft, alteration or the creation of synthetic identities, SAS has noted that that Synthetic identity theft is the fastest- growing type of ID fraud, surpassing traditional identity fraud in number of incidents.
According to Accenture, which validates SAS’ position: “Synthetic identity fraud is costing banks billions of dollars and countless hours as they chase down people who don’t even exist. That is part of the reason why global card losses have been rising at an average annual rate of 18% in recent years, according to Accenture estimates.”
Synthetic identity theft alone may account for five percent of uncollected debt and up to 20 percent of credit losses, or $6 billion in 2016, according to some industry analysts. The problem is even more acute with store credit cards and auto loans.
In its quest to offer solutions to an Asian Pacific Bank recently, SAS in its analysis established a network analysis that had
- 60,000 contact phone numbers referencing immigration agents.
- 5,000 contact numbers referencing casinos.
- 2,500 phone numbers referencing the bank branch at which the application was made.
- 1,500 numbers referencing a meat processing plant.
Flying below the radar
These signs pointed to fraudsters flying below the radar with high-volume, low-value credit applications.
Using SAS software, the bank found four times more banking application fraud, valued at $3 million a month, compared to its former techniques.
The analytic methods that help detect banking application fraud also apply for other credit-granting organizations, such as telcos, online retailers and auto finance organizations, which Cosgrave noted as a worrisome situation if the end-user customer is not more empowered by service and solution providers.
Sayatan Dev, lauded the SAS-Redington partnership as one that would render optimised value to customers. The partnership coming on the wake of emerging markets project a faster pace of growth particularly in the Middle East and Africa which predicts a reach of $4.1 billion.
Following an extensive market assessment, Business Intelligence and Analytics leader SAS entered into the strategic partnership with Redington Value in East Africa. In this arrangement, Dubai-based Redington Value, a subsidiary of the Bombay Stock Exchange-listed company Redington Group, will act as SAS’ dedicated partner to serve SAS customers in Uganda, Tanzania, Ethiopia, Rwanda and Kenya.
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