The explosive adoption of the digital channel is changing the nature of lending. Consumers are coming to expect the kind of convenience and speed that a digital experience can deliver, and lenders are increasingly looking to oblige. Although many of the consumer benefits of digital lending are clear, certain complications related to fraud arise when lending goes digital. This is a function of the degree of separation and anonymity in the digital lending process. Building on these factors, today’s fraudsters are relying on a diversified playbook of schemes and techniques to commit loan fraud in digital channels, including the use of synthetic identities, volumetric attacks, and technology designed to disguise their digital footprint. In this report, Javelin explores how these issues have come to unfold and the steps that lenders must take if they want to effectively resist this growing epidemic of digital lending fraud.
Key questions discussed in this report:
- What effect has the use of digital channels had on the lending space?
- How has fraud changed as a result of lending going digital?
- What are the technology factors affecting the risk of lending fraud in digital channels?
- What are the fraud risks specific to each type of loan product?
- How are different segments of consumers affected by digital lending fraud?
- What are the steps that FIs and other lenders can take to effectively prevent new account fraud?