Enacomm CEO Mike Boukadakis has penned a new op-ed for Paybefore™, the leading provider of information to the prepaid, mobile and emerging payments industry. The piece, “Fight Fraud without Alienating Customers Using Mobile, Knowledge-Based Authentication,” opens by shedding light on the recent escalation of fraud in the United States. From the article:
More than $1.6 billion in fraud-related losses were reported to the FTC last year, and the government agency received more than 1.1 million fraud complaints, a number that has nearly doubled since 2008.
Using stolen identities to open fraudulent credit accounts or making fraudulent charges on an existing account is the second most commonly reported form of identity theft. Fraudsters also are taking these tactics to prepaid—using stolen identities to open fraudulent accounts.
But knowledge-based authentication (KBA), or “out of wallet” authentication, is one of the most effective tools in the technology shed for battling these activities, according to Boukadakis. Using a layered, intelligent, dynamic approach, Enacomm’s eKBA is a nonintrusive way to validate and authenticate legitimate customers and stop fraudsters in their tracks.
Enacomm’s eKBA allows organizations to mobilize authentication and onboarding of customers. Quick and reliable, it can be accomplished in real-time via a mobile device, making it more comfortable and convenient for consumers to use.
To help protect against escalating fraud, stricter laws and industry standards on customer authentication have been put in place. Compliant with FFIEC guidance, the federal Fair Credit Reporting Act, the USA Patriot Act, and the Gramm-Leach-Bliley Act, eKBA is a must-have for fraud prevention that does not sacrifice a positive customer experience. From the Paybefore article:
Federal law requires all financial institutions to obtain, verify and record information on each person who opens any type of financial account. And detailed in its “Supplement to Authentication in an Internet Banking Environment,” the Federal Financial Institutions Examination Council (FFIEC) asks that a variety of processes and technologies be used as part of a multilayered approach. Of note, the FFIEC’s requests that financial institutions enhance simple device authentication, such as static cookies, customer derived enrollment information and IP address confirmations. The FFIEC asks financial institutions to move well beyond those measures and to employ more complex, layered device identifications and out-of-wallet verification processes and procedures. Specifically, the FFIEC guidance says, “Challenge questions can be implemented more effectively using sophisticated questions. These are commonly referred to as out-of-wallet questions that do not rely on information that is often publicly available.”
But as Boukadakis points out, “…asking a customer for multiple pieces of information and presenting him with various questions…can throw a major wrench in the prepaid card activation model.” He goes on to explain, “When consumers set their sights on reloadable prepaid cards, they want to load and use the cards immediately. Approval of a request for a prepaid card may be significantly delayed pending receipt of the requested documentation and subsequent verification, which can result in customer card abandonment, lack of activation or even the purchase of another type of card that can be accessed immediately. Mailing prepaid cards or applications is also extremely expensive, and a large portion of companies’ investments are wasted on cards that are never activated or loaded.”
In summary, out-of-wallet authentication must be accomplished in real time—and that means mobile. Enacomm’s eKBA can combat escalating fraud while meeting industry standards and laws. Read the full article to understand what authentication of a customer and activation of his or her account via mobile eKBA would look like. And, for more information, give Enacomm’s sales team a call at 877-860-0025 or send an email to firstname.lastname@example.org.