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Bring Intelligence to Life™
© 2019 Nuance Communications, Inc. All rights reserved
Financial Services: A guide to biometric fraud prevention and authenticationJuly 16, 2019
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© 2019 Nuance Communications, Inc. All rights reserved. 2
Today’s speakers
Shirley Inscoe
Senior Analyst, Fraud & AML Practice
Simon Marchand
Chief Fraud Prevention Officer
©2019 Aite Group LLC.
About Aite Group
Aite Group delivers research and guidance to leading institutions and technology providers across the global financial services industry. With expertise in banking, payments, insurance, wealth management, and the capital markets, we guide financial institutions, technology providers, and consulting firms worldwide. We are dedicated to helping our clients make smarter decisions, faster, to strengthen and grow their business.
©2019 Aite Group LLC.
© 2019 Nuance Communications, Inc. All rights reserved. 4
Nuance Security Suite
500enterprises
400mvoiceprints
5Btransactions
$1Bannual fraud savings
Nuance
Security Suite
Powering:
Contact Center
Authentication
Contact Center
Fraud
Prevention
Digital
Authentication
& Fraud
Prevention
© 2019 Nuance Communications, Inc. All rights reserved. 5
Nuance named a leader in 2019 Opus Intelligent Authentication and Voice Biometrics Intelliview Report
Opus Research, 2019 Intelligent Authentication and Voice Biometrics Intelliview, June 2019
Nuance is the undisputed market share
leader in terms of enrolled voiceprints
associated with IVRs and contact centers
as well as its self-described “multi-faceted,
layered security approach that includes
biometrics, non-biometric prints, anti-
spoofing measures, intelligent detectors
and pattern detection, employing AI
techniques ”
© 2019 Nuance Communications, Inc. All rights reserved. 6
Today’s conversation
• Current environment
• Evolution of identity
• Authentication and fraud prevention
• Technology investments
• Customer experience
• Operational efficiency improvement
• Key takeaways
©2019 Aite Group LLC.
A pitched battle is underway…
©2019 Aite Group LLC.Page 8
The changing notion of identity: From face-to-face, to
personally identifiable information to digital identity
© 2019 Nuance Communications, Inc. All rights reserved. 9
Current environment
• Our way of interacting with organizations has changed
• Fraud organizations have changed
• Fraud schemes have changed
Authentication strategies
Mostly agree16%
Somewhat agree26%
Neutral/no opinion16%
Mostly disagree36%
Completely disagree6%
Q. To what extent do you agree with the following statement?"My FI’s current authentication strategy is effective."
(n=31)
• Enterprise-wide strategy• All delivery channels
• All products
• Importance of ease of use
• Periodic risk assessments• Identify gaps, failures
• Identify outdated solutions
• Analyze root cause analysis of losses
• What enabled loss to occur?
• Document improvement plan
• Timeline to correct deficiencies
©2019 Aite Group LLC.
Source: Aite Group survey of 32 financial fraud professionals,September 2018
©2019 Aite Group LLC.Page 11
Advantages of biometrics
• Can’t leave home without it
• Easy to use; sometimes housed on device
• Quick, convenient authentication
• Multiple types can be used – fingerprint, voice, behavioral, etc.
• Behavioral is totally transparent to customer, introducing no friction• Voice may also be transparent, dependent on implementation method• Other biometrics are quick, easy to use, and convenient
• Enable layers of security based on risk of customer’s activity
• Stops identity crimes: account takeover, application fraud, synthetic identities
A single solution provider reduces expense of vendor management
© 2019 Nuance Communications, Inc. All rights reserved. 12
Fraud layered defense
Anti-Spoofing
Intelligent Detectors
Non-Biometric Factors
Biometrics Factors
Detect attacksBOT/RAT, Spoofing,
Account takeover, Playback, Velocity
Detect anomaliesNetwork, Channel, Geography
Detect ownershipDevicePrint
Detect individualsVoice biometrics
Behavioral biometrics
ConversationPrint
Facial biometrics
© 2019 Nuance Communications, Inc. All rights reserved. 13
Fraud management cycle
Prevention
DetectionManagement
Fraud Voiceprints
Conversation Print
Digital Behavior
Device Print
Who are you talking to? Biometrics in use…
©2019 Aite Group LLC.
© 2019 Nuance Communications, Inc. All rights reserved. 15
Account setup (call center)
“Hi, I’d like to open a new
account”
Call recording
captured
Complete
Credit File
ID cards
“Of course, let me help you”
Real Time
Detection
Information
Match
KBA
Successful
IDs
Valid
© 2019 Nuance Communications, Inc. All rights reserved. 16
New subscriber fraud (online)
Complete
Credit File
ID cards
“Of course, let me help you”
Real Time
Detection
Information
Match
KBA
Successful
IDs
Valid
“Hi, I’d like to open a new
account”
Conversation
Device Print
© 2019 Nuance Communications, Inc. All rights reserved. 17
Account takeover (online/app)
Complete
Credit File
ID cards
Real Time
Detection
Behavioral
Device Print
Credentials
SIM Swap
Money transfer
©2019 Aite Group LLC.Page 18
Technology investments needed to combat fraud
Mostly agree45%
Somewhat agree26%
Neutral/no opinion13%
Mostly disagree10%
Completely disagree
6%
Q. To what extent do you agree with the following statement?"My FI needs to make significant technology investments to catch up
with the pace of fraud."(n=31)
Source: Aite Group survey of 32 financial fraud professionals, September 2018
©2019 Aite Group LLC.
Effectiveness of technology to combat fraud
20%
28%
33%
57%
55%
43%
20%
17%
20%
0% 20% 40% 60% 80% 100%
Device identity
Behavioralbiometrics
Biometrics (face,fingerprint, voice)
Q. Please rate the effectiveness of the following technologies for mitigating financial crime.
(n=29 to 30)
Extremelyeffective
Highlyeffective
Somewhateffective
Slightlyeffective
Ineffective
Source: Aite Group survey of 32 financial fraud professionals, September 2018
© 2019 Nuance Communications, Inc. All rights reserved. 20
Credit card fraudster life-spanAttack rate following being added to watchlist
Attack rate declines over
time until all attacks stop
Nature of the attack means
prevention success is high.
Fraudsters eventually stop
attacking.
They can recruit new voices,
but this increases their costs,
reducing their profit.
We are disrupting their
business model
©2019 Aite Group LLC.
Prosecution removes the bad
guys from future attacks…
In the past, identity crimes were low risk, high reward
Biometrics enable prosecution so they can’t continue their attacks
• One financial institution has prosecuted over 50 criminals
Organized crime rings are stealing to fund:
• Terrorism
• Human trafficking
• Purchasing weapons, etc.
©2019 Aite Group LLC.
© 2019 Nuance Communications, Inc. All rights reserved. 23
• UK "Big 4" Bank deployed Nuance
Security Suite to fight fraud in contact
center
• In 12 months, Security Suite screened
~18M calls, produced 23,000 alerts
• 1/3869 calls is fraud
• 1/4 calls investigated is found to be from
a fraudster
©2019 Aite Group LLC.Page 24
Importance of customer experience
36%
29%
30%
4%
38%
45%
38%
4%
25%
20%
23%
30%
18%
5%
30%
30%
5%
34%
48%
Every new business case isexamined for its potential impact on
the customer experience
We have multiple independentprojects underway to improve the
customer experience
We have a cross-functional projectteam working to improve the
customer experience
Management talks about improvingthe customer experience, but I see
no signs of anything being done
Improving the customer experience isnot regularly mentioned in my FI
Q. When thinking about how to improve the customer experience, to what extent do you agree or disagree with the following statements?
(n=56)
Agree strongly Agree Neither agree nor disagree Disagree Strongly disagree
Source: Aite Group’s survey of 83 U.S. FI executives, March and April 2017
© 2019 Nuance Communications, Inc. All rights reserved. 25
Authentication
score increases
With Nuance Security Suite
Customer
VoicePrint
Match
Customer
Conversation
Print™
Behavioural
biometrics
WEB
Customer forgets credentials and fails
authentication
SmartAdaption
Agent
Customer account credentials reset Ongoing
performance improvement
of credentials for next interaction
Expected
Channel ID
Geo
ID Match
Network
ID Match
ANI
Device
Print Match
IVR
Customer requests agent and bypasses
ID&V
©2019 Aite Group LLC.Page 26
Operational efficiency improvements (business case)
• Reduction of average handle time in contact centers
• Reduction of identity-related fraud losses and cases to be worked
• Reduction of use (and cost) of outdated, underperforming authentication methods
Improvements in operational efficiency, fraud losses, authentication, customer experience, and demonstrated regulatory compliance (KYC) may all be components of a successful business case.
© 2019 Nuance Communications, Inc. All rights reserved. 27
ROI in record
time
– Design-to-deployment in under 6 months
– Make authentication faster, easier and
more efficient
– Improve caller experience while
identifying fraudsters
– Improve speed of innovation
2 FTEsavings per
month
37seclower AHT
© 2019 Nuance Communications, Inc. All rights reserved. 28
– Security Suite detects more attacks than any of the other fraud detection systems
– Security Suite tracks the human behind the fraud
– Alerts generated are more “fraud rich” than other systems
– Organisations using Security Suite re-allocate investigators to Security Suite
alerts over other systems
Increase operational efficiencies
1.2:15:112:1
False Alert to True Alert Ratio
Offline rangeReal-time range
Our best
performing client
operates at 1.2:1
©2019 Aite Group LLC.Page 29
Key takeaways
• Using biometrics (and combining them with other key capabilities) across all delivery channels can lead to improved authentication results, significantly lowering both identity crime incidents and fraud losses.
• Authentication performed quickly with the customer’s collaboration can better protect their accounts, leading to operational efficiency gains and reducing customer attrition due to fraud incidents.
• Shortening the time it takes to authenticate a customer is a win-win situation, particularly in the contact center, where reducing the average handling time per call can result in substantial operational efficiency gains.
©2019 Aite Group LLC.Page 30
Key takeaways
• Combining transparent fraud prevention capabilities with the use of biometrics (in one solution) can enable lower false positives (leading to budget savings) as well as lower fraud losses.
• Eliminating or reducing the use of knowledge-based authentication questions can improve authentication while making the customer experience much more pleasant.
© 2019 Nuance Communications, Inc. All rights reserved. 31
Q&A
©2019 Aite Group LLC.
Shirley Inscoe
Senior Analyst
sinscoe@aitegroup.com+1.617.398.5050www.aitegroup.com
Aite (pronounced “eye-tay”) Group is an independent research and advisory firm focused on business, technology, and regulatory issues and their impact on the financial services industry.
Visit us on the web and connect with us on Twitterand LinkedIn.
©2019 Aite Group LLC.
33
Thank you!
Reach out for more information:www.nuance.com/fraudCXexperts@nuance.com
© 2019 Nuance Communications, Inc. All rights reserved. 33
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