How to offer top support to clients in preventing fraud

21 August 2023 Consultancy.uk 6 min. read
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As fraud becomes an increasing issue for all organisations, consultants need to have leading knowledge of ID verification and data quality technology, as well as how to apply it. Barley Laing, the UK managing director at Melissa, explains how consultants can best support clients in developing and implementing fraud prevention strategies.

Research published in Consultancy.uk highlights that fraud costs UK businesses a combined £158 billion each year. A huge figure. However, the report’s authors believe this to be an underreporting of the true cost. Businesses should expect fraudulent activity, particularly cybercrime, to increase over the coming years as more services become available online and the cost of living crisis continues.

Therefore, it’s vital that consultants are not only aware of this important issue but are, in particular, at the forefront in advising clients on the best way to prevent fraud – which poses a huge risk to any organisation. But how can they best support clients in doing so?

How to offer top support to clients in preventing fraud

Having data quality is key first step to counter fraud 

To start with, consultants’ clients need to understand the importance of obtaining verified, clean customer contact data. This lays the foundations for good data governance and supports ID verification.

Having clean data is vital because contact data decays quickly as people move home, die and get divorced. It’s why user contact data lacking regular intervention degrades at 25% a year. Also, 20% of addresses entered online contain errors; these include spelling mistakes, wrong house numbers, and incorrect postcodes, which are primarily caused by people mistyping their details into small keyboards on their mobile devices. These are key reasons why 91% of organisations have common data quality problems, increasing the likelihood that they will experience fraud.

The good news is that incorrect contact data can be avoided by having verification processes in place at the point of data capture. One of the most valuable pieces of technology to deliver clean data to support ID verification is an address autocomplete or lookup service. It delivers accurate address data in real-time at the onboarding stage by providing a properly formatted, correct address when the user starts to input theirs. It also enables convenience by reducing the number of keystrokes required, by up to 81%, when typing an address, making it more likely a sale will be completed.

For effective data quality and to help prevent fraud consultants need to encourage their clients to maintain, consolidate and deduplicate their databases. This is important with the average database containing 8-10 % duplicate records. Using an advanced fuzzy matching tool to deduplicate data it’s possible to create a ‘single user record’, essentially a unified record for each customer, which reduces the potential for fraud and costly duplicate communications.

Undertaking data suppression, or cleaning, using the appropriate technology that highlights people who have moved or are no longer at the address on file, is a vital part of the cleaning process. As well as removing incorrect addresses, these services can include deceased flagging to prevent the sending of mail and other communications to those who have passed away, which can cause distress to their friends and relatives. These help organisations to save money, protect their reputations, and avoid fraud.

Evolving technology supports on-premise, cloud and SaaS data quality efforts

The good news is it has never been easier or more cost-effective to manage data quality in real-time. It’s possible to source scalable on-prem data cleaning software, for those organisations who cannot have personally identifiable information (PII) leaving their premises for cloud based processing, but also technology that operates via a web connection or a software as a service (SaaS) platform. Today, advanced on-prem and SaaS solutions are much faster to integrate, as they require no coding, integration, or training. Simply switch on and benefit instantly.

However, make sure the technology sourced can cleanse and correct names, addresses, email addresses, and telephone numbers for individuals domestically and worldwide. It should also have the ability to match records in real-time, ensuring no duplication, and be able to deliver data profiling to help source issues for further action. A single, intuitive interface, whether for on-prem or SaaS tools, should provide the opportunity for data standardisation, validation, and enrichment, resulting in high-quality contact information across multiple databases.

SaaS electronic ID verification

Data hygiene practices on their own aren’t enough to prevent fraud. Forward-thinking consultants are advising clients to use identity verification services, such as SaaS electronic ID verification (eIDV). SaaS eIDV platforms are leading the way because they are easy to deploy, automated, scalable, secure and support cross-checks against an individual's contact data in real-time as they complete a sale or application form online, thereby ensuring the user experience isn’t negatively impacted.

Using eIDV is the way forward in lieu of the manual ID checks that many still have in place, despite being more expensive, time-consuming, and subject to human error.

To work effectively, and for best practice, the eIDV service must have access to a worldwide dataset of billions of consumer records, including reputable third-party, sanctions, and politically exposed person (PEP) data, and offer adverse media checks to provide a full ID verification service. This data must come from reputable global streams, including government agencies, credit agencies, and utility records. Ideally, the service should, at the same time, enrich the data of those held on databases, highlighting and correcting any existing inaccuracies.

KYC and KYB

Taking this approach to ensuring data quality and ID verification to prevent fraud enables organisations to know their customers (KYC). However, it’s vital that the eIDV platform is also able to deliver know your business (KYB) checks, to enable organisations to fully understand the risks posed by new and existing business customers and suppliers. Fraud is frequently committed by those using shell companies or umbrella structures that just don’t exist in reality, so undertaking KYB to validate an organisation can greatly diminish that type of fraud from occurring. Also, delivering KYB will help to prevent financial crime, such as money laundering and terror financing, which could result in significant reputational damage, quite apart from the monetary cost of the relationship. While KYC and KYB are legal requirements for those in financial services, having processes in place to deliver them is best practice for those in other sectors.

As fraud becomes an increasing issue for all organisations, consultants need to have knowledge and understanding of the outstanding ID verification and data quality technology in the market. Only then can they add value in providing a service to clients that helps them to prevent fraud, and therefore protect their bottom line, along with their reputation.