RISK CCR
IDENTITY FRAUD IS MOST DOMINANT THREAT
The latest recorded data shows that identity fraud accounts for nearly half of all frauds documented By Simon Dukes
NEW data shows that identity fraud was the dominant fraud threat in the first quarter of 2015 – 34,151 confirmed instances of identity fraud were recorded during this period. This represents a 27% increase from the same period of the previous year and accounts for just under a half (47%) of all frauds recorded in the first quarter. Identity fraud occurs when criminals
abuse personal data to impersonate an innocent victim or to create fictitious identities to obtain products and services. Recorded frauds increased by 5% in
the first quarter of this year (compared with 2014). Further examination of the identity
frauds recorded in the first three months of 2015 reveals: t The number of recorded victims of identity fraud increased by 31%, from 24,482 to 32,058.
t Credit cards (14,103 confirmed cases or a total of 41% of all identity frauds) and bank accounts (9,349 cases or 27% of all identity frauds) are the identity criminals’ preferred targets. t Over 80% of all identity fraud in the first quarter was attempted or perpetrated online. t The average age for both male and female identity fraud victims is 46 years old. t Those in the 21 to 30 age range continue to be increasingly targeted – 3,970 people in this age range were targeted by identity criminals (16% of all identity fraud victims): a 26% increase from 2014. These findings are in line with the
major findings identified in our Fraudscape report, which was published in March of this year. The latest data shows that these trends have
been maintained so far this year and that identity fraud remains the biggest fraud threat amongst our members. Fraud figures fluctuate over time, as
fraudsters adapt and try new ways of achieving their aims. What these figures show is that identity fraud continues to be the most serious fraud threat and that the first quarter of the year has been a very profitable one for organised identity criminals. Our data is just the tip of the
iceberg – more needs to be done to identify the true scale of fraud in the UK and educate individuals about the potential dangers and the steps that can be taken to protect themselves. CCR
Simon Dukes is chief executive of Cifas E-mail:
simon.dukes@cifas.org.uk
LESS IS MORE TO ACHIEVE SIMPLICITY
SOMETIMES we really do find that less is more. In our case, for example, some time ago, we had 18 different scorecards with many different target populations. Our risk segmentation was driven
by product types, client types, and distribution channels. We ended up with a bunch of different models and credit policy rules. At the same time, we had an issue
with the predictive power of some models and with approval rates. We decided to redesign the whole
credit decision flow (process) according to our desired outputs.
Our target We aimed to achieve higher approval rates, higher sales volumes, lower costs of risk, bigger market share, the
July 2015
allocation of intelligent capacities more to risk-based engineering and less to classical modelling, a reduction in modelling administration costs (such as yearly validation, model monitoring and so on), and a radical reduction in credit policy rules in the decision engine.
The result As a result of our efforts, we have now reduced our number of models from 18 to just four, and these now have a much better predictive power. We modelled everything at a
customer level, not at a product level, according to our business strategy. We eliminated many old risk
segments because they turned out to be statistically irrelevant. We also increased our approval rates significantly, thereby increasing sales
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volumes significantly and increasing our market share, as well as reducing our risk costs significantly. And we can now, finally, focus much more on risk-based engineering (such as statistical tests, champion challenger, innovation and so on) and less on administrating and monitoring too many models and credit- policy rules. And last but not least the whole team
is having more fun! We now spend most of our time
on innovations in order to stay competitive, to achieve our very ambitious business targets, and to outpace our competitors.
By Harald Walitsch, senior manager – risk, Ceskoslovenska obchodni banka, part of KBC Group E-mail:
hwalitsch@csob.cz
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