Fraud is Inevitable but Not Insurmountable
A study conducted last year by LexisNexis Risk Solutions found the following:
- The average cost of fraud has risen 8.1% across lenders since 2017.
- Every $1 of fraud now costs these firms $3.05 compared to $2.82 last year.
- And, the level of fraud as a percentage of revenues has moved upwards (1.61% to 1.92% on average).
- This continues to cause a majority of lenders to feel that fraud is inevitable.
The last bullet point is probably the most disheartening – “fraud is inevitable”. But that is the reality – Fraud is inevitable. Companies spend a lot of time, money, and effort to help mitigate its impact. There are many different classifications of Fraud (Friendly, Family, Vulnerable victim, Manipulated, Stolen Identity, Synthetic, and CPN’s (Credit Profile Numbers). The reason being is that the “Fraud Industrial Complex” is very smart, tenacious and creative.
Most companies are resigned to fighting this “epidemic” once the fraudster attempts a transaction. But what if there was a way to address the issue proactively? What if fraud could be addressed by marketing?
A Proactive Approach to Combatting Fraud
How about screening a lead before you buy (and price) it? Or addressing fraud at the marketing stage of the customer/prospect lifecycle? The really cool thing about alternative data is that it is predictive and an extremely effective way to uncover fraud. It is not mainstream data and when the alternative data looks deeply into someone’s past behaviors that cannot be faked, your ability to flag fraudsters goes up.
Mitigating Fraud and Improving Lead Quality Simultaneously
A couple of years ago, I attended a prominent industry conference and NONE of the lead generation companies were interested in talking about how to bolster the quality of their leads by scrubbing them for fraud. Over and over I was told, “We sell quantity not quality.” Seriously. It left me wondering how the market could tolerate such behavior and it hasn’t. The B2B Content Marketing Benchmarks, Budgets, and Trends-North America report found that 85% of B2B marketers say lead generation is their most important content marketing goal. However, 42% of B2B marketing professionals state that a lack of quality data is their biggest barrier to lead generation.
Six months after the conference, a lead generation company came to us asking how to solve for poor quality. Since then, we have seen a steady rise in the number of marketers and lead generation companies now looking to improve the quality of their leads.
Want to meet our data experts in person? We’ll be at booth #312 at the upcoming Financial Brand Forum Conference in Las Vegas on April 14-17 and we hope to see you there.