Description:
Fraud is prevalent in the finance industry, and it is critical for financial institutions to have a dependable method of detecting fraudulent activities. Third-party data provides a vast amount of relevant information that can be used to mitigate the issue of fraud. With third party data, firms can more effectively verify identities, monitor real-time transactions, and detect suspicious patterns and anomalies. For example, a firm can obtain information about an individual’s credit history from a credit bureau and analyze their loan applications, payment behavior, and credit utilization to see if there are any unusual patterns or discrepancies.
Problem Statement:
Fraud is a huge problem in the finance industry, with illicit activities such as payment card fraud, insider trading, and identity theft becoming more prevalent. It is difficult to combat fraud in the finance industry due to how diverse and adaptable different types of fraud are. Third party data can be a valuable asset to help mitigate the issue of fraud in finance. For example, a firm can use external identity verification services to compare customer-provided data such as name, address, and social security number against multiple data sources to verify the accuracy and legitimacy of the information.
Value Drivers:
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Reduced risk
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Increased revenue
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Enhanced customer satisfaction and retention
Value of Implementation:
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Fraud will continue to be an issue in the near future – the Nilson report, a leading source in credit card fraud statistics, projects that global card fraud losses will exceed $40 billion by 2027.
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The implications of fraud stretch beyond just costing banks money – they also result in lost customers. According to a survey by YouGov and ACI Worldwide, 29% of consumers would consider switching their bank or credit card provider due to a fraud incident.
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Fraud is a very prevalent issue right now – according to the FTC, consumers reported losing nearly $8.8 billion to fraud in 2022, which is over 30% more than in 2021.
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Fraud will continue to be an issue in the near future – the Nilson report, a leading source in credit card fraud statistics, projects that global card fraud losses will exceed $40 billion by 2027.
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The implications of fraud stretch beyond just costing banks money – they also result in lost customers. According to a survey by YouGov and ACI Worldwide, 29% of consumers would consider switching their bank or credit card provider due to a fraud incident.
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According to a report by Cybersecurity Ventures, cybercrime was projected to cost the world $6 trillion annually by 2021. A significant proportion of this affects the financial sector, which is frequently targeted due to the sensitive financial information they hold.
Unique Insight:
McKinsey estimates that banks globally lose approximately $2.92 trillion to fraudulent activities each year, which is about 5.6% of their total revenues.
Advanced Analytics Solutions/Algorithms
First Party Data Needs:
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Examples of data that contain fraud patterns vs data that does not
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Historical fraud patterns for algorithm to learn from
Third Party Data Needs:
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Historical fraud pattern for algorithm to learn from
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Examples of data that contain fraud patterns vs data that does not
Suppliers Available:
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