HOW CREDIT UNIONS CAN USE THEIR OWN BIG DATA TO FIGHT FRAUD

Promises, promises

Every time a new technology comes to town, credit unions are promised transformation and ROI. After a few presentations and some great industry stats, you’re asked to spend a fortune. First you were asked to purchase new lending systems. Then CRM. Then mobile, then digital, then big data.

So when I go into credit unions touting the promise of attainable AI, I sense some justifiable wariness. There’s the feeling that there’s always something new to spend money on, without a whole lot of return. Do you really have the ROI that was promised from your shiny new CRM? Did your digital banking solution really stop more fraud? Are members really more engaged because you purchased Salesforce?

Or consider your big data investments. You’ve probably put money into data lakes and data warehouses. You might have big data by channel or by partner. Maybe you have big data on your core system, big data on your mobile app, big data on digital, on cards, on ATM.

That’s great. But there’s a problem. This data is disconnected.

In search of a better view

“A complete and unified view” is just an idea for many credit unions like yours. Security is in charge of security, branch is in charge of branch, and digital is in charge of digital. And they don’t talk to each other.

Fraudsters count on disappearing between the cracks of these disconnected knowledge centers. For example, your members love voice response, where they call a phone line and plug in a code to access their accounts, and take an action like a balance inquiry. Fraudsters love these phone lines too. They’ve realized that all these old interaction mechanisms don’t have good front-end fraud detection, and they’re taking advantage of these gaps.

It goes to show that despite all the innovation at credit unions to serve your members more efficiently, you’re still exposed. There’s nobody looking at a dashboard that can help them connect the dots. “Hey, why did this guy ask for a card increase, and add this person to an account, and ask for a new card to get shipped?”

These are the kinds of questions that go unasked. Meanwhile, the new touch-points in our digital economy are proliferating, members are demanding frictionless experiences, payments are going real-time, and fraudsters are using everything they have to get at the money inside credit unions. They’re leveraging the same data abundance, the same market complexity, and the same technology.

How do you stop these fraudsters? First, connect the dots. Fraudsters want to disappear in your big data. They want you to lose their scent as they cross disconnected databases and channels. The power of AI is seeing all the patterns they leave behind, and stopping fraud dead in its tracks.

Second, unify your investments. An AI platform can “wire on” and consolidate all your information centers as common data. The result is better decisions. And as you enter into transactions with a new confidence that fraud isn’t present, you can deliver the kinds of trust-based experiences for your members that they want out of their credit unions, and differentiate yourself as a community institution.

How this works in action

Feedzai is partnering with a top 50 credit union in the West. This credit union came to us because they were having fraud impacts across multiple channels. While the primary fraud vector was cards (debit/credit), they were also facing online banking fraud for retail and commercial members.

Since this credit union is expanding their service offerings to include ACH, wires, and business services, they needed a solution that could gather data and interaction from every member touchpoint. And they needed this solution to create a unified view of member behaviors.

They came to Feedzai because of our unique ability to unify these touchpoints and provide a universal dashboard, case manager, and view of their members across ATM, shared branch, mobile banking, online banking, and card transaction.

That’s why in the end, strong fraud detection means strong member service. I believe that AI is creating community-based commerce, where financial institutions can deliver great economical interactions based on good information.

And you don’t even need to be a large credit union, or a credit union with a large staff of developers, to leverage AI. Feedzai’s promise is to empower you to use data across member touchpoints to find and fight fraud.

Ironically, advancements in AI are about going back to the way things were before automation. Commerce used to be something that happened in person. Financial institutions and their customers felt secure because they knew each other from their communities. Now commerce is digital, often anonymous, and there’s no going back. In this new world, where you need to make tough decisions fast, AI is creating complete views that can replace the knowledge that used to exist, back when commerce was face to face.

When you’re ready to talk about fighting fraud, I’m ready to listen. Reach out to me at [email protected].