Application Fraud – The Ever-Evolving Form of Identity theft

Modern-day banking is all about providing convenience and instant service to customers. Consumers applying for credit lines such as mortgage loans, car loans, and credit cards, want their application and approval processes to be quick and easy. This can be achieved only through digital means. No wonder digital lending is taking mainstream. However, the convenience that comes with digital lending also offers opportunities for cyber fraudsters who use sophisticated tools like bots and other hacks to drive massive application fraud attacks.

What is Application Fraud?
Application Fraud is a type of identity theft where a fraudster applies for an account, policy, service, or insurance claim using fake/stolen details to influence the outcome of the application. These false details could include KYC details, employment status, income, documents such as bank statements, addresses, etc. The details could either belong to someone else or might be completely fabricated. Application frauds are not only responsible for financial losses but may also lead to loss of brand image; reputation; customers’ trust and an overall sense of brand injury.

Application fraud due to Identity theft does not necessarily have to be using sophisticated hacking tools over the internet, it can also involve stealing papers from recycling bins, stalking social media accounts for personal information, or simply guessing a password. Some more complex ways can include techniques like using malware or false ATMs.

So how do you demotivate fraudsters from targeting your financial institution?
The answer is an effective application anti-fraud solution. A good anti-fraud solution is an investment that needs to be made by financial institutions to standardize the fraud identification process. It enables the removal of subjectivity and ensures process optimization by ensuring you pick up only those applications for a review where a flag is triggered for intent to fraud. A comprehensive solution should provide for an automated fraud detection, investigation, and incident management solution for banks and lending institutions. It must be equipped to address and evolve multiple use cases such as multiple verifications and checks in real-time (PAN, Voter, DL, Email, Litigation, Negative Profiles already identified by the industry) required for due diligence at the loan application stage through artificial intelligence and proprietary machine learning techniques to detect frauds.

CRIF with its Anti-fraud application tool “Sherlock” aims to fill in this gap. It provides for:

  • Automated verification of government-issued Identity documents in real-time.
  • “Fraud Risk Score” – a numeric value that indicates whether a given application is fraud or a suspected fraud – to every applicant for automated and faster decision making.
  • Automated AML (Anti-money laundering) screening, covering RBI Sanctions list.
  • Automated anomaly detection thereby highlighting indicators for a potential fraud.
  • Information about the applicant for due diligence. Sherlock can raise red flags around anomalies against application elements, KYC verification failures, and other checks around email and litigation. This establishes a great use case for NTC (New to Credit), NTB (New to Bank) portfolios for the Assets and Liabilities vertical.
  • Data analysis to identify consumer trends to detect and prevent suspicious activity basis multiple factors like geographies, effective rules, or data investigators.
  • Provision to download a comprehensive risk-assessment report for in-depth observations, additional findings, and recommendations.
  • Verifications against multiple data sources in a single click thereby completely digitizing the process without impacting the customer experience.

CRIF in its endeavor to be a one-stop solution and an effective partner in the customer life cycle journey now offers a concrete solution to protect your lending business against application fraud with ‘Sherlock.’ Sherlock Lending, CRIF’s powerful anti-fraud solution is equipped with just the right combination of advanced features to detect and investigate application frauds and identify thefts. Its well-established market presence as one of the best anti-fraud solutions attests to its success. Contact CRIF today for an end-to-end Antifraud solution for completing your on-boarding solutions.

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