You can find Interchange on the Bond website, Spotify, Apple or your favorite podcast platform.
The world’s behavioral data is sitting there and waiting to be unlocked. Neuro-ID was founded to do just that. But what is this behavioral data we speak of? It’s not about what the prospect's SSN is, where they live, or what their birthday is.
It’s about the actions that a human (hopefully) takes as they’re signing up for your product; mouse movements, changing tabs, switching windows often are all behavioral data. Maybe they rush through all the expected questions and then they get stumped at a question that they should be able to answer equally quickly. That’s a potential fraud trigger.
You can imagine the other side of that coin. If you’re able to see that the vast majority of prospects are getting hung up on one question, then the product team can think about switching that question for another or finding another avenue to get the same information.
We sat down with Jack Alton, Chief Executive Officer at Neuro-ID, to discuss what Neuro-ID does, why they do it, and what behavioral data could mean for the future of financial services.
Below are three key takeaways from our conversation with Jack.
KYC with context
Most sign up flows for financial products are pretty similar...and candidly pretty stale. Hand over your name, address, SSN, yada yada yada. It’s all important information to get the customer through the KYC process, but we’re missing a good deal of nuance. That’s where behavioral data comes in.
Neuro-ID can unlock the nuance of the behaviors that are happening during this process. Did it take the user way too long to get one piece of information that they should have memorized? Did they blow through everything, but couldn’t pass the SSN field without multiple failures?
These are broad examples of the context that Neuro-ID can layer on top of the classical KYC data to provide increased pull through rates and decreased fraud rates at the same time. There is more to ID Verification than simply answering a set of questions. The core question should always be, “Is this person who they say they are?” With the mind boggling amount of information on the dark web and identity theft getting easier and more prevalent every day, it’s time for our KYC and AML checks to go one step further.
Understand the customer journey at scale
Fintech brands and banks across the US have teams of humans handling the flags and errors that KYC/AML inevitably creates. According to KYC 2020, “The industry average rate of false positives currently hovers around 42%. But for larger institutions it can reach a whopping 95%. This translates into millions and even billions of dollars of lost revenue each year.”
Not only is the lack of contextual behavioral data increasing costs, but it’s also decreasing revenues for the industry at an alarming rate. “We’re trying to flip fraud and risk on its head,” Jack explains.
It’s not often in the financial realm that we discuss abundance vs. scarcity mindsets, but this dynamic comes down to exactly that. There’s been a scarcity mindset associated with downside limitation on the risk side. Unlocking the behavioral data gives the brand a chance to understand normal behavioral, abnormal behavioral, and generally rely less on the classical routes of downside limitation through rejecting potentially great customers.
Cross-departmental collaboration isn’t easy. Everyone serves the same cause, but they generally have a slightly bifurcated set of incentives.
One example is the tug of war that often occurs between the risk department and the growth team. The risk group is incentivized to err on the side of caution in hopes of keeping fraud as low as possible; the growth team is responsible for pulling every new customer through the journey that they can. Every false positive is an arrow in the side of the growth team. The money was spent through advertising to bring in the lead, they were nurtured into a prospect, and finally they’re in the sign up flow. But, alas, a false positive. End of journey. Trust eroded and the prospect moves on to another brand. It’s a loss for both parties.
Bringing in technologies like Neuro-ID and Bond that expose valuable data to decision makers can change this dynamic, align incentives, and improve the customer journey all at once. Building a business is hard enough without internal infighting. It doesn’t have to be so hard. Can’t we all just get along?
Have a listen for yourself and tell us what you think. We want to hear from you, so reach out to firstname.lastname@example.org. Also, if you love data and care about improving the financial lives of Americans, check out our careers page and let’s chat.