For online lenders, verifying the identities of online applicants does more than just reduce fraud, it can help speed up the decisioning process so your best applicants get funding even faster. It’s merely a matter of properly implementing the identity verification step within your existing application and underwriting process. So how does this look inside the online lending workflow?
The traditional online lending workflow looks like this:
- Lead purchase: New lead information is automatically checked against free filters such as an internal database of returning customers, blacklists, etc.
- Underwriting phase: The online lender evaluates the application, using credit checks, income verification, personally identifiable information (PII) checks, know your customer checks, and other compliance checks
- Funding: A decision is made to fund (or not fund) the applicant
Identity verification fits in the top of the funnel, between lead purchase and underwriting. It’s most effective after an applicant’s information is checked against free filters, but before the underwriting phase gets underway.
By using quality non-personally identifiable information (PII) data to verify each and every lead, your team can easily weed out fraudulent leads before wasting time and expense on the additional checks that must take place during the underwriting phase.
In addition, when leveraging rules and identity verification data in their ruleset, online lenders can streamline parts of underwriting in order to improve the customer experience and speed their best leads through to funding.
Why add identity verification to your online lending workflow?
Lower cost per fund: When you’re not wasting resources purchasing or qualifying leads that turn out to be fraudulent, your company can achieve a lower cost per fund and increase overall conversion rates to new loans.
Reduce fraud-related defaults: An additional layer of identity verification helps weed out fraudulent applicants from passing through to funding and showing up in your books later as a default.
Stop synthetic ID theft: Synthetic ID theft is when fraudsters combine real (usually stolen) and fake information together, to create a new identity. They then open fraudulent accounts and conduct financial transactions that look legitimate, making it harder to spot. In fact, Synthetic ID theft is expected to cost the U.S $8 billion annually in 2018, from credit card fraud losses alone, according to Experian. Online lenders can protect themselves by using a quality filter that identifies linkages between the PII and non-PII data elements of a person’s identity to reduce this kind of fraud.
Ekata’s Identity Check return 70+ signals leveraging real-time global data, machine learning, and network insights across all 5 elements of email, phone, person, address, and IP address to flag potentially fraudulent applications and highlight top applicants.
Adding Ekata’s Identity Check to the top of your funnel is an efficient, reliable way to help good loans fund faster, while keeping fraudulent loan applications out of your approval process. Contact us to see a live demonstration of how our data helps online lenders know who’s really behind their loan applications.