Banks and Credit Unions Can Mitigate Risk Through Customer and Member Centricity

by | Mar 14, 2021


Banks and credit unions can boost fraud detection through customer and member centricity

The global pandemic didn’t only disrupt the lives of the general law-abiding population, it also influenced criminals who employ schemes, scams and cybercrime to commit fraud against banks and credit unions. The worldwide lockdown and subsequent business restrictions resulted in some fraudulent activities increasing and others decreasing.

In 2021, banks and credit unions must take a customer and member-centric approach to mitigate fraud risk. Knowing your clients and having access to data sets that benchmark legitimate customer profiles and behavior is key to combating the likes of identity theft, synthetic identity fraud and other scams.

Synthetic identity fraud decreased over 2020, but the hiatus won’t last

According to an article published on Credit Union Times, synthetic identity fraud declined in line with the postponement of payments on loan forbearance programs. In fact, research by TransUnion and Aite Group shows that Q3 2020 levels of synthetic fraud relating to new auto loans and credit cards was at the lowest levels since they began tracking in 2016. Unfortunately, fraud is expected to rebound when those programs end, and payments recommence.

LexisNexis provides the definition of a synthetic identity as: “a combination of fabricated credentials where the implied identity is not associated with a real person”. Criminals open accounts and lines of credit using this synthetic identity, with the intention of committing fraud.

Reasons for the drop in this type of fraud:

  • A result of the combination of systems put in place by banks and credit unions to identify and stop fraud
  • Other opportunities to commit fraud, as a result of financial interventions
  • The drop in sales of credit profile numbers (CPNs)

Synthetic identity fraud is particularly challenging for mid-tier banks and credit unions, because it is far more difficult to detect than identity theft, and fraudsters can bypass traditional authentication processes.

The Federal Trade Commission recorded 2.1 million fraud reports in 2020

While synthetic identity fraud may have been somewhat hampered by loan forbearance programs, other types of financial fraud flourished in 2020.

The Federal Trade Commission (FTC) recorded 2.1 million consumer fraud reports, with criminals employing methods ranging from imposter scams to fraud through online shopping, as well as mobile and communication services in order to steal an estimated $3,3 billion from consumers.

There were 1,4 million identity theft reports in 2020; almost double the 2019 figures, according to the FTCs Consumer Sentinel database.

What should banks and credit unions do to mitigate fraud risk in 2021?

Mitigating the risk of fraud has two primary elements: knowing your customers or members, putting them first and capitalizing on the power of data.

Achieving this not only requires fraud detection systems but a company-wide customer-centric mindset.  When banks and credit unions put the customer at the center of strategy, the entire organization is focused on knowing everything there is to know about the customer’s circumstances and behavior.

Customer and member-centricity requires an investment in appropriate tools to gather, manage and analyze data. Having a single view of all customer communication and interaction provides the benchmark of how a legitimate customer engages and behaves.

An all-inclusive CCM platform is the foundation of a customer and member-centric strategy. It provides a central repository and view of customer information that informs decisions and feeds into fraud detection programs.

In addition, technology and partner choices should prioritize security and data privacy, so that both provider and customer can rest assured that personal information is secure while residing or being processed on the bank or credit union’s systems.

Doxim’s CCM platform assists to gather and leverage customer data, enabling banks and credit unions to know the customer/member and more effectively detect fraud threats. Interested to learn more? CONTACT A DOXIM CCM EXPERT TODAY

3. Expansion of digital products

As banking customer behavior shifts, banks must move with the times, or risk getting left behind. Many banks today are exploring the power and potential of open banking, which can allow them to offer more innovative products and services to their customers, as well as to better compete with fintech companies and other non-traditional financial service providers.

As you shift your banking business model to reach new segments or provide an enhanced array of services, communication becomes even more pivotal to your success. After all, if your customers don’t know which new services they qualify for, or how those services will help them meet their goals, then they are unlikely to explore them further. CCM technology can be leveraged here to provide personalized on-statement messaging that directs customers to the right products and services, as well as 1:1 personalized “explainer” videos to help them get started.

Adjusting your bank’s priorities to thrive in 2023

In an era of constant change, the key to successfully transforming your bank’s business model will be to stay attuned to the changing needs and preferences of customers, and to be open to exploring new opportunities and technologies that can help your FI stay competitive and relevant. But these new opportunities are doomed to fail if you do not clearly communicate their benefits and make it simple for customers to access them.

That is why transforming your customer communication strategy is the best first step to broader digital transformation. By updating your approach to communications to meet omnichannel customer needs, you also position your bank to communicate the benefits of changes in your broader organization, like new or enhanced products and services. The pace of change in banking has never been brisker – but with the right strategic approach to these changes, the future is bright.

Investing in a modern customer communication management and engagement platform is an essential part modernizing your banking strategy, as it can provide the personalized digital experiences that will keep your bank or credit union ahead of the competition. It helps provide a great customer experience, and builds rich relationships, which in turn results in customers for life and a competitive advantage in the rapidly evolving financial marketplace.

How Doxim can address the banking customer communications trends identified and help future-proof your digital banking strategy

banking customer communications trends

Doxim’s experienced consultants and omnichannel platform can help transform your customer experience in many ways, including:

  • Gathering and utilizing customer data to continually improve the personalization of communications.
  • Building trust with customers via communication (via print, PDF, HTML, email, text, and online interactive experiences).
  • Leveraging interactive video to drive personalized digital customer experiences, such as interactive statements, bills, or reports, that offer visual engagement and real-time interactivity
  • Putting customer data, including customer statements, at the fingertips of your service representatives for immediate and personal service.
  • Making a meaningful connection with value-added content, like information about philanthropic activities, on customer statements.

Our Bloggers

Erin Romo headshot
Erin Romo

CCM in Utilities

James Hall headshot
James Hall

CCM in Europe

Jason Pothen headshot
Jason Pothen

CCM in Utilities and Healthcare

Josh Noble headshot
Josh Noble

CCM for Banks and Credit Unions

Olga Zakharenkava headshot
Olga Zakharenkava

CCM Strategy

Scott Biel headshot
Scott Biel

CCM in Wealth & Insurance

Sean Kennelly headshot
Sean Kennelly

CEM and Payments

Guest Bloggers

Keypoint Intelligence logo
Keypoint Intelligence

CCM Industry Experts

Matt Chester headshot
Matt Chester

Utility Technology

Schedule My Demo