Month: March 2020

Covid -19 has impacted the world like no other situation since at least World War II. In financial terms, it poses the biggest danger to the global economy since the 2008 financial crisis. In pandemic terms it is still nothing compared to the Spanish Flu epidemic which lasted from 1918 to 1920 (exactly 100 years ago) which killed from between 17 million to 100 million people. The difference is that with covid-19 we are not dealing with history but a very real existential and vastly unknown threat.

 

These are times when almost every business is challenged. As Lenders you have your own set of challenges. Some may be easy to overcome. Others may cause you to find solutions to work around. And, some challenges might be things you have to live with for the moment. However, it’s not a time to be negative in one’s thinking but as in a wartime situation, it’s an opportunity to get creative and adapt to the forced change that is upon us. Welcome to the new-normal.

 

At Insight, here’s our most recent insight to the lending industry. Based on what our clients, and a broad section of the lending industry are telling us, here are the most common challenges that the industry is facing:

 

 

INSIGHT CONSULTANTS:

 

We are prime consultants to the LENDING WORLD operating out of the US and India.

Whichever of the above 3 categories you fall into, we don’t want to sell you anything because we have nothing to sell. We seek engagement. Engagement builds relationships, relationships build trust, trust listens and creates solutions, solutions solve your problems and the problems of your customers. That’s when you become our customer we serve. We’d love to hear from you in order to create a safer world for all of us.

 

Contact Us

Lenders face higher costs of fraud than other industries.

According to LexisNexis Risk Solutions, for every dollar of fraud, lending companies incur $2.82 in costs, which includes fees, interest, etc. Large digital lenders, with over $50 million in annual revenue, are hit hardest by fraud in this space

When lending went digital, it gave fraudsters new venues to take advantage of the system. With more transactions moving online daily, the threat of reputational damage or financial loss is higher than before.

 

Robotic Process Automation (RPA) in this aspect is a promising science that can help protect against malicious cyber intruders.  Manually handling the security threats daily is impossible and it may end up in irregularities. Automation will remove these challenges, as the software is designed to handle the massive amounts of manual work, can respond quickly to alerts and can function without direct user involvement. Online lending frauds may be on the rise, but so are RPA-led technologies that combat them. Firms can leverage RPA’s Machine Learning capabilities to create business rules that are unique to your business.

 

How RPA can strengthen cyber security?

Often the day-to-day processes are repetitive in nature and can take too long to complete manually. Paired together with an increase in the number of alerts and small security teams, organizations cannot perform efficiently and become at risk of successful attacks. Automation will remove these challenges, as the software is designed to handle the massive amounts of manual work, can respond quickly to alerts and can function without direct user involvement. Combining machine learning (ML) and artificial intelligence (AI), RPA can enable automation – taking human effort out of the equation. 

RPA adoption is expected to increase to 72% by 2020 and, if adoption continues at its current level, RPA will achieve near-universal adoption within by 2023.

 

Fight Fraud with RPA

In order to better grasp the directions of robot assistance let us now zoom in on some examples of RPA security-related application areas.

  • Data Validation: RPA can boost the efficiency of checking the suitability of access data.
  • Inventory Tracking: Software robots can continuously monitor the inventory and update it whenever they discover risky areas
  • Data Classification: Robots can be deployed to detect sensitive data, and either validate it or remove it if stored in unauthorized locations
  • Reduce Cyber Threats – RPA can effectively deploy to detect threats. By running a fast-paced analysis of the encountered malware alerts, bots can select the most relevant information bits and, based on this, make response decisions as to when and how to address the threats
  • Compliance made easy: RPA minimises human access to sensitive data, which can reduce risk and compliance issues
  • 24/7 Security: RPA doesn’t tire or mentally “clock out” on the job, providing 24/7/365 security coverage.

Whether intentional or by human error, people pose the biggest risk to the cyber wellbeing of organizations and businesses. By removing the human aspect, it makes your data more secure.

Modern cyberattacks have become heavily automated. If organizations try to defend against these attacks manually, the fight becomes man versus machine, with highly unfavourable odds for the organization. To successfully protect against automated attacks, it is essential to fight machine with machine – by incorporating automation into cybersecurity efforts.

Are you ready to embark on your own RPA journey? Please feel to Contact Us if you would like to understand more on how businesses can fight fraud with RPA .

 

“It takes 20 years to build a reputation and few minutes of cyber-incident to ruin it.” – Stephane Nappo, Global Head, Information Security, Société Générale International Banking pole

Online Frauds is an ever-increasing threat to lending firms. It is a critical problem to address as it directly affects the firm’s profitability, its customer experience, and its bad debts.

 

Types of frauds in online lending

  • Loan Stacking: taking multiple loans from different lenders at the same time without intent of paying them back. Fraudsters can take most advantage in online lending as they are serving a significant portion of the population with little or no credit history.
  • Account take over (whale phishing): directly target high profile individuals at an organization, with the aim of stealing money or sensitive information or gaining access to their computer systems for criminal purposes
  • Identity Theft: criminals use someone else’s identification to secure a loan. In any case, once the identification of the victim has been verified, the fraudster gains access to loan funds and disappears.
  • Web Scraping: extract large volumes of data from web pages and applications and create legitimate-seeming fake accounts
  • Accessing data leaked on the dark web

Many customers choose to go online lending because of its rapidity. At the same time, online lenders are also serving a significant portion of the population with little or no credit history. Fraudsters can take advantage of this loophole, without much consequences. Regulations, compliance and overall risk management also place a significant operational burden on online lenders.

 

How does online frauds impact digital lenders and Fintech?

  • Loss of client trust: Clients expect their delicate financial data to be secure. Online fraud is perceived as a breach in the security of personal and financial information, which causes loss of clients.
  • Loss of reputation: Unable to secure clients data directly affects firm’s reputation which in turn affects securing new clients as well as relationship with partners and investors
  • Financial loss: Fraud reduces organisational assets and increases its liabilities, which impede the going-concern status of the firm

Online fraud prevention is the not just the responsibility of individuals who may fall victims, but of the lenders whose reputation and assets may be on the line as well. While traditional fraud management techniques have been effective in detecting fraud, there are some inherent challenge

 

Typical challenges in Conventional Fraud Management Techniques

  • Inflexible Systems: Lack of flexibility to integrate with different functions of the enterprise and adaptability to read data from traditional and non-traditional medium. As a result, the alerts thrown by these systems are more siloed in nature as opposed to offering a more integrated view.
  • Multiple Systems: Firms have multiple fraud management systems across the value chain and there are instances where a transaction gets flagged resulting in a harrowing experience for the customers.
  • External Data Access: Lacks in ability to access external data that can act as an additional source for user satisfaction
  • Real-time Profiling: Need for real-time profiling to keep up with the pace and rate of online transactions without disrupting the customer experience

 While firms are beefing up conventional techniques and investing in their existing security processes to ensure multiple layers of protection are created, it could be worth exploring additional or alternative approaches. The need for computational power to process large amounts of data and make decisions real time is imperative for businesses to reach quickly to fraud attacks. The only true way to keep the online digital world safe and secure is by analysing the digital identity of every online user.

In this aspect, automating your Cybersecurity will improve the productivity and value of the security team.

Read next article to find out how automation solutions improve Cyber Security.

Can Excel be Dragged out of Finance and Accounting?

A debate that dates back to 2007 from the CIO magazine article, “How To Say Goodbye to Spreadsheets” the article suggests the need to move out of the ancient tool. It still seems like a hard and painful task in reality. Research across the accounting and finance industry shows that professionals are aware of the… Continue reading Can Excel be Dragged out of Finance and Accounting?