Have a safe and happy holiday week! Hopefully, you’ve already started your brief, yet likely well-deserved, time away from the office and will read this when you return. But for the others like me still putting in hours until tomorrow’s national holiday, now’s an excellent time to focus on a topic many of us highly prioritize – security.
While safety and security this weekend will deal more with properly handling fireworks or ensuring everyone follows the recommended precautions if you’re out on the water, it also makes sense to focus on how your loan origination system should help your financial institution effectively mitigate exposure to fraud.
Credit fraud, especially during the summer when many people take time for vacations, is just as prevalent as ever. Financial institutions have to be just as careful when evaluating their loan origination systems for fraud detection functionality. To help, here are three key things to consider when evaluating a platform’s fraud detection capabilities:
- Access to Fraud Detection Products from the Credit Bureaus: The credit bureaus offer various fraud detection products. With the vast amounts of data they have to develop suspect fraud models, it makes good business sense to leverage these products as part of your fraud detection strategy. You’ll also want to verify that the loan origination system will support out-of-wallet authentication questions for mobile and online application processing. These products are offered.
- Internal Repository of Suspected Fraud Records: Once your organization has gone through the effort of identifying a fraudulent application, you’ll want to capture the applicant’s information to easily spot them if they apply again in the future. Therefore, the loan origination system should be able to both integrate and search an internally managed fraud repository that your organization built and maintains; or it should inherently include a fraud repository that can be managed and searched automatically as part of the application processing workflow.
- Methods for Inserting Records into the Internal Repository: Find out from the loan origination system provider how records can be inserted into the internal fraud repository. Often times, clients want to load charged-off accounts into the fraud repository. To ensure accuracy, this should be an automated process extracting accounts from the core system and importing them to the fraud repository. Check to see if the loan origination system includes a user interface to maintain the fraud repository so records can be viewed or added manually.
Fraud detection and other security matters are very serious topics these days, so that’s why it’s equally important to ensure your loan software and provider are able to offer the highest levels of protection. MeridianLink’s LoansPQ is already recognized as the industry’s leading loan origination system for fraud detection, which is why 68 of the top 100 credit unions and 23 of the top 100 banks in the United States partner with MeridianLink.
Our MLX Consulting team recently released an ebook that examines fraud detection and prevention from an analytics perspective. First, it briefly defines fraud and explains the main characteristics of a solid fraud score – analyzing the different variables that can be developed in order to identify and evaluate the likelihood of fraud. It also provides a short overview of the different analytics techniques used to detect and prevent fraud. To conclude, it attempts to explain how fraud models can substantially lower the related risk and improve the overall operational efficiency for a financial institution.
To download a free copy of this ebook, please click the button below.