In today’s world of generative AI and seemingly endless fraud scams, fraud prevention and thorough identity verification are more important than ever. Fraudsters are becoming increasingly adept at bypassing the basic checks equipment finance lenders have relied on throughout the years to protect their portfolios.
Remember the good old days when you could glance at a photocopied driver’s license, do a quick reverse phone number lookup, google the business address, and pass the file along? Unfortunately, that’s no longer a reality for most lenders.
As AI and other technologies continue aiding fraudsters in proliferating the banking industry with new deceptive tactics, ensuring your team AND your technology are vigilantly protecting your portfolio is important.
How can we protect ourselves without overwhelming our borrowers with a pile of forms and intrusive fraud checks or overburden our already busy team with more tasks. The goal is to find that perfect mix – a technology sweet spot that helps you flag the fraudsters while still making the experience smooth for your employees and genuine customers.
Let’s look at three ways technology can enhance your fraud detection workflows, while still providing a simple and seamless experience for your borrowers and internal team.
Behavioral Biometrics
Imagine you're filling out a basic form online - the way you type, move your mouse, or the order you fill in the form can be indicators used to tell genuine borrowers from fake. Behavioral biometric technologies can track these indicators and look for bot/fraudster behaviors.
For instance, the order in which fields are filled out can indicate potential fraud. Most genuine customers are able to complete a form from top to bottom in order. Humans that are unfamiliar with the data, may fill out the fields in the order that they have the data available to them, causing them to jump around the form.
For bots, the speed of the form being filled out is a key indicator. Noting gibberish or incompatible information in certain fields, or missing information that would be unlikely to be missing for a genuine borrower.
In some situations, the answer could be simple. Requiring a Captcha to be completed is a typical way to weed out basic bots. For combined bot/human attacks, having hidden form fields can also help identify bot-filled applications with a human Captcha solver.
Additionally, capturing data about the application being filled out and working with a third party to analyze the behavior is invisible to the borrower but powerful to your team. Technologies like BioCatch, Neuro-ID, and LexisNexis Risk Solutions can track over 200 different patterns that users exhibit when interacting online, and provide a risk assessment based on this behavior analysis to their customers.
Fraudulent Document Detection
In a survey of more than 400 lending professionals conducted by Plaid, 6/10 financial organizations (61%) experienced document fraud, making it the most common type of fraud reported.
Although altering or creating fraudulent documents such as cash-flow statements or other documentation required to underwrite a deal is nothing new, the technology used to scrutinize and flag these fraudulent files is improving rapidly.
We appreciate the meticulous approach our partner, Ocrolus, takes in tackling document fraud, expertly combining AI with human insight. Ocrolus uses AI to quickly read and analyze documents, adeptly spotting a wide array of document fraud types, from forged signatures to altered numbers and counterfeit documents. Their AI is trained through exposure to a massive library of data, allowing it to learn how to identify even the most subtle irregularities. To enhance their process, Ocrolus adds a layer of human review if needed, ensuring a thorough vetting process. This dual-layered approach aligns seamlessly with our commitment to providing comprehensive, accurate solutions to equipment finance lenders.
Email Address Profiling
Metadata is quickly becoming the go-to standard in identity verification. It's fascinating how much insight we can gain into a borrower's profile just by analyzing their email address with the latest tech.
Now, we can dig into the email's metadata to ensure its authenticity and alignment with the borrower's name. We can also evaluate the email provider's legitimacy, user behavior, and the duration of the email address's existence.
This approach, offered by providers such as Ekata and ArkOwl, allows a deeper understanding of the applicant.
It’s clear that the old ways of verifying identity and preventing fraud in equipment finance lending are no longer sufficient. With the advancement of AI and real-time risk detection, digital tools can now help you uncover the entire digital footprint of any borrower. These methods not only enhance our ability to spot fraudsters but also streamline the verification process, ensuring a hassle-free experience for our genuine borrowers. Let’s leverage these powerful tools to safeguard our operations, uphold client trust, and stay ahead in the ever-changing world of fraud mitigation.
At northteq we understand how important it is to help you protect your business from fraud. We collaborate with industry leaders like Ekata and Ocrolus to provide comprehensive solutions that offer a clear picture of your borrower. This collaborative approach is rooted in the belief that a deeper understanding of each borrower’s profile significantly enhances fraud prevention measures for the equipment finance community.
