Following this announcement, FirstDetect is expected to predict the likelihood that a customer will default on a loan in a secure and fast manner, as the use of Open Banking represents a key feature of the solution.
The new source of information will include multiple data points that are missing from traditional credit files, such as up-to-date financial details (like a client’s current income and assets), as well as nuanced patterns and trends that illustrate their spending, earning, and saving behavior over time.
As fraud and bad actors are becoming increasingly able to steal from banks, lenders, and financial institutions, customers are at risk of having to pay more for financial services as a result. By leveraging multiple solutions that are advanced in data, artificial intelligence, and machine learning, companies are having the possibility to verify identities online and prevent third-party fraud, and identity theft. In addition, those products are expected to improve the manner in which financial institutions confirm that a user or an applicant is who they say they are, as well as catch bad actors while trying to impersonate legitimate customers.
First-party fraud refers to instances where a customer or an individual applies for a loan in their own name, but never actually intends to pay for it back. In certain cases, clients engage in first-party fraud in a strategy to save money, while other times organised crime is represented by tricking or coercing legitimate users into leveraging their own information to further criminal schemes.
With this in mind, Prism Data’s platform was developed in order to identify sudden changes in income and expenses, which is set to predict balance activity and future availability of funds. In addition, the solution also tracks BNPL usage and abuse, which is usually not reported to the credit bureaus. The company will continue to apply these learnings and expertise in order to make highly accurate predictions about what are the chances for a loan applicant to perpetrate first-party fraud.
FirstDetect will also enable lenders to significantly reduce risk and losses for tools like credit cards or short-term personal loans, while also being particularly useful for one-time transactions like BNPL loans. The new solution was made available for all Prism Data clients while aiming to add security and efficiency to its market-leading suite of cash flow underwriting products. FirstDetect can be used as a standalone score, with Prism’s CashScore, or as a complement to existing first-party fraud defenses.
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