Nilabh Ohol, VP of Product, FiVerity
In chemistry, a mixture can be thought of as a type of salad, where your ingredients such as vegetables, toppings, and dressing are tossed together, each retaining its own characteristics. Conversely, a compound is more like a cake, where ingredients fuse to create a new, more cohesive, (and more delicious), whole.
When comparing identity programs like KYC and fraud prevention, large financial institutions can often manage by stitching together a mixture of point solutions, however, Community Banks and Credit Unions require a more integrated approach to achieve a full view of identity trust, due to budget constraints and limited technical resources. This post explores why information sharing is so crucial, the challenges with traditional models, and how a comprehensive identity trust management solution can supercharge identity programs for Community Banks and Credit Unions
The Metaphor: Chemical Mixtures vs. Compounds
Think of chemical mixtures as the process of integrating various point solutions to support KYC, verification, and fraud prevention. Each solution retains its unique features, much like individual ingredients in a salad. While this can work for large financial institutions with the resources to manage these integrations, it often leads to complexity and inefficiency.
On the other hand, chemical compounds represent a comprehensive identity trust management solution. Here, various elements combine to form a powerful new entity, streamlining processes and enhancing overall effectiveness. For smaller institutions, this approach provides a unified solution that’s easier to manage and more effective in mitigating risks.
Challenges with Traditional Models
Large financial institutions often have the resources and technical capabilities to integrate multiple point solutions through orchestration platforms, achieving a strong view of identity. They use these platforms to manage and synchronize various tools, leveraging their substantial budgets and specialized staff.
However, smaller financial institutions are nimble and resourceful but often face budget constraints and shared technical resources. The complexity and cost of integrating multiple solutions can be prohibitive, leading to gaps in their KYC and fraud prevention strategies.
Despite utilizing multiple tools and resources, fraud losses continue to rise. Many financial institutions suffered substantial losses due to fraud, with community banks and credit unions having the second-highest fraud levels, just behind online lending platforms (Alloy).
The Need for a Comprehensive Solution
A unified platform simplifies processes across onboarding, investigation, transactions, strategy, and policy creation, making it easier for institutions to make informed decisions. A comprehensive solution offers better protection and operational efficiency, streamlining efforts and reducing redundancies. Streamlined processes ensure compliance with regulations, reducing the risk of penalties and enhancing overall trustworthiness.
Moreover, a comprehensive view of identity trust extends beyond account opening, providing ongoing surveillance and real-time updates. While starting with a comprehensive solution provides the most value, it must also be capable of integrating additional specialized or in-house data sources and models. This ensures seamless adoption and prevents slowdowns in innovation.
FiVerity’s Approach
FiVerity’s Identity Trust Management Platform offers a comprehensive solution that integrates elements to provide a unified approach. Key features include real-time data capture, continuous monitoring, and advanced AI/ML technologies to provide clear, actionable insights in plain text.
By using advanced technologies to analyze data and generate actionable insights, FiVerity helps institutions make informed decisions quickly. The platform ensures real-time data capture and comprehensive coverage, enabling financial institutions to respond swiftly to emerging threats. Orchestration enhances workflow and case management, ensuring that all elements work seamlessly together to mitigate risks and enhance security.
Conclusion
The limitations of traditional fraud consortiums necessitate a new approach to information-sharing—one that leverages real-time data integration, comprehensive identity histories, robust information sharing, and continuous monitoring. By adopting this method, financial institutions can significantly enhance their fraud detection and prevention capabilities, fostering a more secure and trustworthy financial ecosystem.
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