Trust, not just money, is the currency of engagement for fintechs, banks and regulators.
The level of trust a customer has in a financial institution determines whether they feel confident in sharing their data, conducting business, and staying loyal to it.
As fraud, data breaches, and synthetic identities are eroding customer confidence across financial services, regulators are demanding stronger compliance, while customers want seamless digital experiences. This requires the industry to evolve its mindset from preventing fraud as an isolated function, to cultivating trust as part of an integrated strategy.
Trust is delivered with data quality
Trust is built on the reliable foundation of accurate, high-quality and verified customer data. If such data is lacking even the most advanced identity verification or fraud prevention tools fall short. It’s only by anchoring compliance and fraud mitigation strategies in data quality that financial institutions generate the conditions for trust to grow among regulators, customers, and the broader market.
Having accurate customer data from the start ensures every layer of business operations is improved. That value spans electronic identity verification (eIDV) and know your customer (KYC) checks, which become more precise, helping to identify synthetic identities before they enter the system. With accurate contact data know your business (KYB) checks operate faster and more effectively, preventing shell companies from slipping through the onboarding process. Also, fewer false positives are generated from sanctions and politically exposed persons (PEP) screening. The end result is stronger protection against fraud and a smoother customer experience, which will aide differentiation, standout and build customer trust in a highly competitive financial services marketplace.
Trust in monitoring and transaction necessitates accurate data
Ongoing monitoring and transaction analysis also requires quality data to operate effectively. As fraudsters evolve their tactics, small discrepancies can be the early signals that separate a trusted customer from a potential threat. These can include a misspelled name, a mismatched address, or a recycled phone number. Those systems trained on poor or incomplete data are likely to miss such issues, while those built on verified, up-to-date information can detect and act on them in real-time.
Avoid AI hallucinations and build trust
Data accuracy is growing in importance as artificial intelligence (AI) tools and technologies become increasingly integral to those in the financial marketplace. AI is now integrated into nearly every aspect of financial services and fintech, from fraud detection and credit scoring, to customer personalization and predictive analytics. However, AI systems are only as strong as the data they have access to. If they are fed outdated or incomplete data they will deliver ‘AI hallucinations’ of biased outputs, false alerts, and miss threats.
How to deliver quality customer data
Collecting accurate customer data should start at the onboarding stage with an address lookup or autocomplete service. These can deliver correct address data in real-time by providing a properly formatted, accurate address when the user starts to input theirs. When using such a service the number of keystrokes required is slashed by up to 81 per cent when entering an address, speeding up the onboarding process, enhancing the entire experience, making it significantly more likely that an application or purchase will be completed. Additionally, similar tools can correctly collect email addresses, telephone numbers and names at the first point of contact.
Data deduplication is important because those financial institutions who don’t have data quality processes in place commonly experience 10 – 30 per cent duplicate rates on their customer databases. This adds cost in terms of time and money, particularly with potentially duplicate customer communications being distributed, whether in print or online; quite apart from the issues with KYC compliance and security. Obtaining an advanced fuzzy matching tool to merge and purge the most challenging records to create a ‘single user record’ and source an optimum single customer view (SCV) is the way forward. This insight is essential in improving customer communications and trust, along with reducing the opportunity for fraud.
Undertake data cleansing or suppression activity to highlight people who have moved or are no longer at the address on file. As well as removing incorrect addresses these services often include deceased flagging to prevent the delivery of mail and other communications to those who have passed away, which can cause anguish to their friends and relatives. The use of suppression strategies enables organizations to save money by not distributing inaccurate messaging, and therefore maintain customer trust while helping to prevent fraud.
In summary
Generating digital trust bridges all interests. Those of financial institutions who want to deliver a standout customer experience and retain customers, while avoiding fraud and protecting their reputation. As well as regulators who want to ensure the integrity of financial markets; and customers who want assurance that their identities and money are secure.
No longer can data quality be treated as an afterthought or a background process by those in financial services, not only for its key role in building trust, but as an essential enabler of everything they do. This requires accurate and verified data collected at the very first point of contact and then maintained throughout the customer relationship.
Barley Laing , UK Managing Director at Melissa
Barley established and leads the UK office of Melissa which provides global data quality, address and identity verification services that enable organizations to improve their customer data management, reduce fraud and comply with regulatory requirements. With 28 years of technology and data industry experience, Barley’s role is focused on meeting the data quality and ID / compliance needs for organizations in the UK and worldwide. Melissa, which has recently celebrated its 40th anniversary, has helped over 20,000 organizations of all sizes across a wide range of sectors, around the world to unlock accurate customer data. In the financial services sector they have worked with Bank of America, Citi and the Financial Conduct Authority (FCA).
Barley Laing
Barley heads up the UK office of Melissa which provides global data quality, address and identity verification services that enable organizations to improve their customer data management, reduce fraud and comply with regulatory requirements. With 27 years of technology and data industry experience, Barley’s role is focused on meeting the data quality and ID/compliance needs for organizations in the UK and worldwide.
