Acxiom (Little Rock, Ark.) and TransUnion (Chicago) have teamed up to deliver a comprehensive fraud management platform for its financial services customers, aiding origination across product lines including credit and debit cards, demand deposit accounts, e-commerce and retail lending.
The solution involves a two-tiered approach, starting with the verification of the application that a customer gives to a bank. "The first thing we do is look at that information and validate it to see if it's real," says Bill Drew, Axciom Fraud Management.
Each data element is scrutinized for legitimacy. Names are cross-checked with common variants, nicknames and maiden names. Addresses are checked against lists of prisons, hospitals and mailbox providers. Social Security numbers are scrutinized to determine whether they're unique to the individual, and that the stated age of the applicant jibes with the date of issuance of the number. Telephone numbers are also evaluated for appropriateness.
The intent is to move the least risky individuals through the process without having to manually intervene. "The big challenge that [banks] had in the past was the high number of false positives," says Mike O'Connell, vice president of product management, TransUnion. "That would really increase their manual reviews and the cost associated with those manual reviews."
By increasing the sophistication of the screening process, fraud experts can focus on the most questionable cases on the first pass. "You'll be able to validate or verify perhaps 80 percent or even 90 percent of the population coming in the door," says Drew. "Those that either fail the verification, or there's a flag or a message that you don't like, you would, at that point, authenticate them."
That's phase two, in which the customer is presented with "out-of-wallet" questions. "They're typically multiple choice," says Drew. "From a list of these four numbers, what was your previous street address? In what county did you previously live? What's your mortgage balance or your mortgage payment?"
The new offering is currently being beta-tested by several clients, according to the companies.