Anti-Fraud Measures Don't Work as Well as You Think

Fraudsters know "knowledge-based authenticators" 92% of the time, while genuine customers only pass KBAs 46% of the time.

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Faced with increasing competition, insurance providers are adding new products and offering better deals to take a slice of the $200 billion in revenue opportunity. Yet, providing an experience that meets the needs of today’s customers can prove challenging, especially when it comes to seamlessly authenticating customers. 

Insurers, like many modern-day service providers, can store sensitive customer account information and even have access to customer banking/payment information, making it essential that they deliver the appropriate account protection and customer experience. To do so, insurers need to know who is accessing accounts from the beginning of the interaction, on mobile, via web and over the phone. However, contact center phone exchanges are increasingly a challenge for insurers, especially as fraudsters leverage new tactics to gain access to customer accounts. 

Fraudsters are better at accessing accounts than genuine customers

Contact center customer interactions usually start with a series of questions that begin the authentication process by asking the user to verify their name, phone number, account number and other knowledge-based authenticators (KBAs), for example. But with data breaches making this information readily available and social engineering attacks tricking users into handing over their information to fraudsters, it’s harder than ever to tell if a caller is genuine. 

Asking questions during the authentication process is no longer a secure method because the answers may no longer be private and can allow fraud to infiltrate the business. In fact, according to a case study covered in Pindrop’s recent Voice Intelligence and Security Report, fraudsters passed KBAs 92% of the time, while genuine customers only passed KBAs 46% of the time. This harsh truth of fraudsters knowing customer information more than actual customers, coupled with information from the same report that call center agents from insurance companies failed to verify customers’ identities as much as 12% of the time, allows fraud to slip through the cracks. 

The report found that a sample of insurers have an average fraud call rate of 1 in 7,390. Although insurers typically see lower fraud rates than a bank, the payoff is often higher in the life insurance space. Additionally, property/casualty companies sampled regularly saw fraud during the automated claim process, with fake credentials being used by fraudsters. 

See also: How to Balance CX and Fraud Detection

Changing the locks 

Insurers have a lot to lose, and, without the proper authentication protocols, disaster may await the company and its customers’ financial information.

To help insurers protect their customers’ accounts and only allow verified callers access, they can leverage new technology tools, such as voice authentication, which analyzes callers’ voice characteristics. Unlike traditional questions that are easily answered due to data breaches and other means, voice characteristics are hard to replicate. Even if an audio deep fake is created, voice authentication tools can still detect a synthetic voice, helping thwart fraud attempts at the source. 

Not only can voice authentication help reduce fraud, but it can also reduce average call handling times in contact centers and increase operational efficiency by creating a frictionless authentication process. 

Customer information is more readily available than ever before, and insurers need to be at the forefront of protecting their business and customers from fraud. If they let fraud infiltrate their contact center, they risk more than losing money; they risk losing their customers’ trust and loyalty to the brand.

Ben Cunningham

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Ben Cunningham

Ben Cunningham is director of product marketing at Pindrop. Since joining Pindrop in January 2017, Cunningham has helped lead marketing, product management and go-to-market efforts for the company.

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