CUs Seek Better Authentication Without Affecting Member Experience
Cybercriminals’ growing sophistication and catalogue of stolen personally identifiable information challenges many credit unions that seek better, quicker authentication solutions for online lending and call centers without affecting member experience.
“Properly authenticating online loan applicants is becoming a serious issue for many credit unions. On one hand, we as an industry recognize that consumers enjoy the speed and efficiency of Internet-based lending. On the other, credit unions still have a fiscal responsibility to their members to mitigate risk and comply with numerous privacy and security mandates,” Terrence Corrigan, Loan Operations Manager, $240 million Cleveland-based Firefighters Community Credit Union, said.
The big question for credit unions is how to authenticate folks in a faceless environment.
“Credit unions want to be able to lend money online without calling someone into a branch and have them fill out a paper app,” Barry Kirby II, VP of the Islandia, N.Y.-based loan origination provider Teledata Communications Inc., which provides FFCCU with a decision-lending platform, said.
The $284 million Portland (Mich.) Federal Credit Union also uses TCI for indirect car loan applications through dealerships; and online applications for signature loans, credit cards, and all secured loans, other than mortgages.
“When an application is submitted to us from a dealership or an online member or non-member they submit everything through the application portal. They go through a security piece on the application side that makes sure they are not a robot,” indirect lending relationships manager for PFCU LeAnne Hixson explained. The member application information travels though TCI to the credit union.
Another venue subject to authentication issues is the call center where agents aim to provide exceptional experiences by listening carefully and reacting promptly to requests. The system’s weakness is it does not always recognize spoofed calls from ever-sophisticated defrauders.
Atlanta-based voice security/authentication firm Pindrop Labs in its annual Call Center Fraud Report revealed a significant increase in the fraud rate, a jump of 113% year-over-year. Fraud rates in 2016 were 1 in 937 calls across the board, compared to 1 in 2,000 calls in 2015, according to Pindrop’s 2016 report. For financial institutions, the rates were 1 in every 895 calls.
Call center agents are at a disadvantage. “The customer experience demands don’t allow for a lengthy authentication process,” Michael Hughes, VP of Americas at Pindrop, suggested.
St. Petersburg, Fla.-based CUSO PSCU, which provides call center services for well over 800-member credit unions, also offers risk and fraud management, including Pindrop’s phone printing technology, as part of its layered security.
Making it even more problematic is how impostors can completely seize personally identifiable information. “We’re seeing the fraudster starting to piece together identities,” Jack Lynch, chief risk officer at PSCU, stated.Lynch said. “they get a piece from us, a piece from public records, and create that story.”
Read more about authentication at credit unions in the June 14, 2017 print issue of CU Times.