Combating Looming Trend of “Black Production” Fraud Through Industry-wide Cooperation
The advancement of technology and growth in consumer finance are expanding the boundaries of financial services. The flip side is new possibilities for online fraud which poses new financial risks. There is now a dazzling array of technology-based scams ranging from “phishing” and “good deals” offered by e-commerce portals with each case being more sophisticated than the earlier ones.
According to a report released by Experian this year, 63% of businesses have during the past one year experienced comparable or even more serious frauds. In addition, 75% of businesses expressed interest in more advanced security measures and authentication that have little or no impact on the digital customer experience.
To help eradicate the proliferation of financial frauds, on 7th August, 2018, Experian and Zhicheng A’ Fu, a subsidiary of CreditEase jointly launched the upgraded version of “Fraud Net”, an intelligent anti-fraud product based on Zhicheng A’ Fu’s intelligent risk control platform. Combining social behaviour data with advanced technology to fingerprint devices, the “Upgraded Fraud Net” helps credit loan institutions to analyse in-depth, fraud risk of borrowers in a multi-dimensional manner while providing maximum protection to customer’s privacy, enabling it to combat loan frauds and syndicates in a secure and highly effective manner, even as they use increasingly sophisticated means to perpetuate their crimes. The “Upgraded Fraud Net” is the parties’ first anti-fraud product since their announcement of strategic partnership in June this year.
Mr. Huang Jian, Managing Director of Experian Greater China & Ms. Zhao Hui, General Manager of Zhicheng A’ Fu
Analysis by the “Upgraded Fraud Net” during fraud risk assessment is conducted along multiple dimensions. They include professional, intuitive fraud rating, precise risk list with high level of partitioning, rich and three-dimensional analysis of social relationship network, and powerful equipment risk overview. Generally speaking, the product structure is now even more systematic. For example, the product’s information and data collection tools and procedures are compliant with General Data Protection Regulation – said to be the world’s strictest regulations on protection of personal privacy. It is also more prudent with respect to legal compliance and pays greater attention to protection of personal privacy.
With regard to equipment risk, the new product also relies on DeviceInsight, Experian’s latest patented technology for device fingerprinting to ensure high accuracy rate for identifying equipment and product SDK. Multi-dimensional equipment parameters are integrated to generate unique identification information globally, while the system’s extraction of equipment risk is based on a significant amount of anti-fraud rules, thereby helping approval staff to make accurate assessment. Fingerprint checking by the equipment is also effortless and immediately to give users a better, more efficient experience. The user-friendly technological solution showcases the partners’ capability to help institutions identify inconspicuous fraud risk in a comprehensive manner.
With respect to the current collaboration, Mr. Huang Jian, Managing Director of Experian Greater China, says: “We are extremely pleased and honored to have joined hands with Zhicheng A’ Fu on the one-stop shop anti-fraud decisioning service. Experian has always spared no effort in providing customers with intelligent, effective solutions with our advanced technologies and impeccable services. We share the same vision with Zhicheng A’ Fu, and together we have carried out substantive innovation in the area of anti-fraud by leveraging on Zhicheng A’ Fu’s impressive domestic risk-control practice. It is also a reflection of our active effort to create a sound ecological environment for the financial industry.”
As is reiterated by Mr. Huang, the “Upgraded Fraud Net” encompasses the strengths of both parties and thus not only possesses technological capability but is also practical – it places anti-fraud aspect ahead of application – allowing the parties to provide one-stop shop services covering consulting to product delivery for anti-fraud decisions. Unlike other products, it is industry-leading, being the culmination of the parties complementing each other with their technological platform and practical experience.
Ms. Zhao Hui, General Manager of Zhicheng A’ Fu, is no less enthusiastic about the launch, saying: “The ‘Upgraded Fraud Net’ is the initial results of the partnership between Zhicheng A’ Fu and Experian. Today large and small credit loan institutions in China face serious fraud risk, with the trillion-yuan Internet financial market suffering hundreds of billions of losses each year. Almost without exception the institutional customers that we serve have been involved in typical fraud cases. Our years of practice have enabled us to garner considerable experience in risk control as well as powerful anti-fraud ability. At the same time, we have taken pains to apply the latest technologies such as big data, artificial intelligence and machine learning to our practical products in order for them to form a multi-dimensional fraud-alert system. Incorporation of Experian’s advanced technologies has also enabled our services to be more secure and efficient. Combination of our collective insights also proves to be significant in helping small-credit loan industry to meet the challenges of fraud in an effective manner.”
“We estimate that by 2020, on-line payment fraud will reach USD25.6 billion, with one in ten accounts subject to attacks as a result of data breach,” says Mr. Huang Chienming, General Manager of Experian Greater China for Decisioning and Analytics on the trend of financial fraud. It is precisely because of its awareness of such trend and demand for anti-fraud solutions that Experian has been making significant investments in these areas. Consequently Experian is successfully included in Gartner’s 2018 Market Guide for identity proofing and corroboration, being one of only three representative vendors to provide all the listed capabilities in all six identity proofing and corroboration use cases.
China’s Internet financial industry looks to face greater challenges as the nation’s Internet economy develops at a rapid rate and its financial models continue to undergo innovation. Thus, to meet such challenges, one would require a service provider that is not only intelligence-based but which combines theory with practice in the fields of big data, machine learning and decision analytics, etc. With the “Upgraded Fraud Net” taking the lead, it is hoped that there will be more cases of partnership between the strong for solutions that will benefit industries.
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