Javelin Report- Looking Beyond KBA: Solving the Fraud vs. Customer Experience Challenge

With financial consumers turning to online and mobile channels not only to manage their existing accounts, but also to open new ones, digital account opening (DAO) is thriving, and the pressure is strong on institutions to expand their origination platforms. But meeting seemingly ever-changing regulatory guidelines and protecting customers from digital fraud stand in their way. In particular, the growth of DAO is fueling a rise in new account fraud (NAF) as fraudsters discover that digital account opening solutions offer them the same types of conveniences that they do to legitimate applicants.

Making matters worse still for banks, many of the solutions available to safely verify the identity applicants often sacrifice digital customer experience. Knowledge-based authentication (KBA) does not work for customers with thin credit files, such as immigrants or millennials, who may be forced to visit the branch to authenticate but often choose instead to simply abandon the account opening process. That is an enormous problem for institutions as they enhance their digital channels — particularly mobile — to meet the needs of their digitalfirst customer base.

Some of the key topics covered in this white paper are:

  • How digital account opening is nourishing
  • How mobile millennials lead the digital charge, but dynamic KBA is getting in the way
  • Proving that digital account opening is attractive to criminals, too, as it offers the same remote convenience given to legitimate customers, along with increased anonymity and scalability
  • The way ineffective identity verification tools drive application abandonment
  • How, in fact, each FI needs bespoke identity verification processes to meet the needs of its specific customer populations