Dragnet Solutions

Banks have invested millions of dollars in branch IT and training, but all too often the customer onboarding process remains frustrating and error-prone.

Take the example of a friend of ours who recently opened an account with a major U.S. bank. She visited a local branch to open a checking account. The branch staff were friendly enough, but the process was grueling:  it took about an hour to fill out forms, wait for computer responses, and so on.

A week later, she learned that even though the branch staff had spent a lot of time opening her account, they had made several glaring errors:

* They opened two accounts for her, not one.
* They misspelled her name on her checks.
* They ordered the wrong pattern on her checks.

One account, three errors. And the misspelled name doesn’t bode well for the bank’s fraud detection services.

We’re hoping that branches like this apply their best thinking and IT to improve their customer onboarding process. How about cutting that hour down to half an hour, spelling the customer’s name right, and not surprising her with the number of accounts she’s opened?

To win over customers, financial institutions must get that crucial first interview absolutely right.

Accelerated Insight is our real-time identity verification service for financial institutions. To request a demo, please contact us.

In July 2011, the Federal Financial Institutions Examination Council (FFIEC) published a supplement to its 2005 guidelines, “Authentication in an Internet Banking Environment.” The supplement, which is available here, notes that Internet fraud has become more sophisticated in recent years:

“Since 2005, there have been significant changes in the threat landscape. Fraudsters have continued to develop and deploy more sophisticated, effective, and malicious methods to compromise authentication mechanisms and gain unauthorized access to customers’ online accounts. Rapidly growing organized criminal groups have become more specialized in financial fraud and have been successful in compromising an increasing array of controls. . . . Cyber crime complaints have risen substantially each year since 2005, particularly with respect to commercial accounts. Fraudsters are responsible for losses of hundreds of millions of dollars resulting from online account takeovers and unauthorized funds transfers.”

To stop this rising tide of fraud, financial institutions need to strengthen their anti-fraud defenses, educate their customers, and become more effective overall at combatting fraud. The FFIEC supplement offers general guidelines for doing so.

Internet Banking Guidelines

What new guidelines does the FFIEC propose?

First, “financial institutions should perform periodic risk assessments and adjust their customer authentication controls as appropriate in response to new threats to customers’ online accounts.”

Second, “financial institutions should implement more robust controls as the risk level of the transaction increases.” Because they typically hold fewer funds, retail banking accounts are generally at less risk than commercial banking accounts. But both types of accounts need more effective security.

To implement new “robust controls,” institutions should take a layered approach to security.

“Layered security is characterized by the use of different controls at different points in a transaction process so that a weakness in one control is generally compensated for by the strength of a different control. Layered security can substantially strengthen the overall security of Internet-based services and be effective in protecting sensitive customer information, preventing identity theft, and reducing account takeovers and the resulting financial losses.”

Layered security can include such measures as more rigorous authentication, anomaly detection, out-of-band verification of transactions, IP-address blacklists to block connections from sites known to be involved in fraud, and more frequent use of challenge questions as part of the authentication process.

Increasing Security While Improving Customer Service

The trick, of course, is not only to strengthen security, but to do so in a way that improves the customer’s experience.

At the same time that financial institutions are going back to the drawing board on Internet security, they’re trying to appeal to the changing marketplace of online services. Users are more Internet-savvy. They’re connecting from multiple devices, including smartphones and tablets. And they’re accustomed to fast, easy-to-use services for getting directions, selecting restaurants, booking hotels, and—why not?–banking. Life is moving now at Internet speed. Users are impatient. And they’re not terribly loyal to any particular brand or institution.

How should financial institutions proceed? Here are some thoughts:

While layering on new defenses, look for ways to streamline or simplify customer interactions and business workflows.

• * If you add a step on the front-end, can you eliminate a step on the back end, without losing functionality or sacrificing security?
• * Can you make banking applications more intelligent, so that they apply knowledge about the customer to make life simpler and transactions smoother, even while improving fraud detection?
• * In addition to streamlining authentication for everyday transactions, can you also streamline account creation for new customers?

A good first step is to benchmark your existing workflows, so that throughout the design process you have a well-understood performance standard to meet or exceed. How many steps are involved in your current authentication process? How long does it take for a typical user to perform them?  Does the performance vary on a mobile device? Can you make it even easier—and more secure—for a customer to apply for an account and start banking?

By establishing efficiency as a design goal, financial institutions can deliver better customer experiences even while reducing fraud and complying with the FFIEC’s more rigorous authentication guidelines.

To learn more about Accelerated Insight, our real-time identity verification service for financial institutions, please contact us.

We offer financial institutions trials of Accelerated Insight, our real-time identity verification service. The form of a trial varies. We tailor each trial to suit the needs of the institution we’re working with.

In this blog post, I’ll describe some of the forms that a trial can take. First, though, let’s review just what it is we’re offering in a trial.

Accelerated Insight in a Nutshell

Accelerated Insight is a secure, real-time Web service that accepts customer data, such as a name and a previous address, and instantly returns the complete and accurate data that financial institutions need for identity verification—data that includes the customer’s name, the current address, Social Security Number, and a risk/confidence assessment.

Accelerated Insight applies data-cleansing and risk-analysis algorithms to data drawn from billions of consumer records managed by a leading data aggregator. Accelerated Insight is a standards-based, SOAP-compliant Web service that supports both .Net and PHP and that can be extended to support other programming interfaces upon request. Dragnet Solutions grants access to Accelerated Insight only to banks, credit unions, and other financial institutions. Each institution’s data is accessible only to its authorized users.

Now that we know what we’re delivering in a trial, let’s consider the various ways we can deliver it.

A Batch Data-Cleanliness Trial

If you’d simply like to compare the results of Accelerated Insight to the results of your institution’s current identity verification service, you can sign up for a trial and then send us 100 customer records. Within 24 hours, we’ll send you the results from Accelerated Insight’s data-cleansing and risk analysis algorithms.

An Unbranded Web Service Trial

A batch data trial lets you experience Accelerated Insight’s data-cleansing and risk analysis, but it doesn’t let you experience the speed at which Accelerated Insight performs analysis and delivers results. After all, it’s one thing to understand that a service delivers real-time results. It’s another thing to see accurate customer data and a risk assessment appear instantly on a computer screen in a branch with a potential customer sitting just a few feet away.

To experience the benefits of real-time analysis, ask for a trial that gives you access to our standard user interface and the right to analyze a certain number of accounts per day. This type of trial lets you key in customer data at the point-of-service and see real-time results from Accelerated Insight: corrected addresses, corrected Social Security Numbers, and risk/confidence assessments that can prove helpful when deciding whether or not to open accounts.

An Integrated Web Service Trial

Accelerated Insight has a fully documented application programmatic interface (API). An institution’s technical team can use this API to integrate Accelerated Insight with the software applications used for customer onboarding at a branch. Integration isn’t difficult since the API is standards-based.

Full-scale integration enables branch personnel to experience Accelerated Insight as part of their normal workflow. It also enables institutions to feed customer data from Accelerated Insight directly into Customer Relationship Management (CRM) software, eliminating an extra step in the onboarding process.

Web Service Integration with Magnetic Stripe or 2-D Barcode Input

In addition to accepting keyboard input, Accelerated Insight can also accept customer data from the magnetic stripe or 2-D barcode of a driver license. Using magstripe readers—whether they’re already deployed in branches or provisioned by Dragnet for your trial—dramatically streamlines the process the customer onboarding process. Just swipe their driver license and Accelerated Insight instantly delivers accurate customer data on the screen, allowing your new-account team member to spend more time cross selling additional products and services.

These are just some examples of the forms that a trial of Accelerated Insight can take. Contact us if you’d like to discuss your particular interests and requirements.

To learn more about Accelerated Insight, please contact us.

When someone walks into the branch of a financial institution to open an account, the branch personnel need to answer two questions. First, is this person who they say they are? Second, do we want to do business with them?

After a cursory examination of the person’s driver license and a few background questions, most branches consider the first question settled. They focus most of their attention on the second question. For example, they’ll use a risk-analysis service like TeleCheck to determine if the applicant has a history of writing bad checks. They’ll often perform other queries, as well.

If the check analysis and other analyses don’t raise any red flags, the branch staff will typically open an account for the applicant.

Do you see the danger here?

All the data analysis performed to answer the second question is predicated on a correct answer to the first question. Figuring out if Jane Smith at 123 Meadow Street has ever bounced a check is relevant only if the person standing in front of you really is Jane Smith. If it’s really Mary Jones posing as Jane Smith, all your analysis about Jane Smith is only leading you astray. In fact, Mary Jones may have chosen to impersonate Jane Smith precisely because she knows Jane Smith has a high income and a good credit history.

Back-office exception handling is not a substitute for determining immediately whether or not customers are who they say they are. Discovering two days after an account has been opened that the woman claiming to be Jane Smith was really somebody else is practical knowledge gained impractically late—by then, the institution has invested its time and money in onboarding a customer who’s going to turn out to be trouble.

To defeat fraud, financial institutions need identity verification that takes place in real time. Branch personnel need to be able to determine instantly whether an applicant is who they say they are. Only real-time identity verification can ensure that other risk-analysis services—such as querying a person’s check-writing history—provide genuinely useful knowledge, instead of simply furthering a fraudster’s deception.

To learn more about Accelerated Insight, our real-time identity verification service for financial institutions, please contact us.

Customer Relationship Management (CRM) records are obviously essential for any Financial Institution. CRM records are required for Know Your Customer (KYC) mandates, effective outbound sales and marketing initiatives, and daily business operations.

You rely on your CRM records. But how are you entering these records in your CRM system?

It turns out that CRM data entry can have a significant influence on the lifetime sales you make to your customers.

Positive First Impressions Boost Sales

Most sales to DDA customers take place in the first few months of an account being opened, according to BAI. Sixty percent of sales will take place in the first month; 75% take place in the first three months.

Your initial meeting with a customer is critical. The customer is clearly prepared to buy something from you. It’s a great opportunity for needs-based selling, and for establishing trust. Not surprisingly, studies show that trust turns out to influence how much customers will buy in the future.

In the course of your initial meeting with a customer, then, you and your institution should achieve these four goals:

• * Verify the identity of the new customer to avoid fraud
• * Collect the customer’s personal information for CRM data entry and later sales and marketing fulfillment (e.g., mailing a debit card and a PIN).
• * Perform needs-based selling
• *Build trust with the customer, forging a relationship that will encourage future business.

The first two goals include data collection; in fact, they both use the same data—the customer’s name, address, and Social Security Number. The second two goals involve face-to-face time with the customer. These goals are best achieved when the branch staff are looking at customers and conversing with them, rather than pecking at a keyboard and filling out labyrinthine forms.

Optimizing Branch Operations Involving CRM

The trick to pulling this all off? Achieve goals 1 and 2 quickly and efficiently so that identity verification and data entry do not interfere with goals 3 and 4.

Here’s where CRM data entry becomes important. The process can go wrong so easily. For example:

CRM data entry the wrong way:

• * Branch office staff exasperate the customer by asking for the same information over and over.
• * Branch office staff bog down the sales process with lengthy questionnaires and slow typing.
• * Branch office staff make typing mistakes that generate exceptions and that undermine future fulfillment efforts (a man named Pat gets a promotional letter addressed “Dear Pam”)

CRM data entry the right way:

• * Sales staff do no typing at all or only minimal typing, because data comes from magstripe readers and other data sources.
• * Sales staff never repeat questions, and all questions are brief and to the point.
• * Error-free data improves customer satisfaction and increases the return on future sales and marketing efforts.

A Real-life Example of CRM Frustrations

Here’s an example of how CRM data entry can frustrate bankers.

I recently spoke to bankers at an institution that’s been using an identity verification service that is not integrated with their CRM system. Because the two systems are not integrated, the customer onboarding process required sales staff to key in a DDA applicant’s personal information twice—first into the identity-verification service and then again into their Customer Relationship Management (CRM) system. Of course, all that typing interrupts the selling process. It also introduces lots of opportunity for keyboard errors. The bankers are frustrated. Lack of CRM integration is making customer onboarding more time-consuming and complex that it needs to be. No one is winning in this scenario.

This bank is now searching for an identity verification service that is faster and more accurate and that can be easily integrated with their CRM system. The bank hopes to enter CRM data once and take care of identity verification and CRM input in a single operation.

Accelerated Insight:  Identity Verification that Integrates with CRM

In contrast to the disjoint systems being used at the bank I just described, Accelerated Insight not only verifies identities in real time, it also integrates with CRM and other branch systems, eliminating redundancies and reducing errors. Accelerated Insight accepts data from mag-stripe readers, so branch personnel may not have to do any typing at all to enter a customer’s identity information. Simply swipe a driver license—even a driver license with an old address—through a reader, and Accelerated Insight instantly returns the person’s name, current address, date of birth and Social Security Number, along with a risk and confidence score.

If your institution has been relying on disjointed CRM and identity verification services, and you would like to get a free trial of Accelerated Insight, please contact us.

In October, we attended the BAI Retail Delivery Conference in Chicago. We thought the conference sessions were very educational, including many presentations by industry practitioners with great data and insights. In future blog posts, we’ll be writing about some of the big ideas discussed at the conference—ideas such as applying new technology to streamline customer onboarding and developing strategies to increase the profitability of DDA accounts.

On the exhibit floor, we had the chance to demonstrate Accelerated Insight, our real-time identity verification solution. It was enjoyable to see “the light bulb turn on” with so many people once they saw how easily they could eliminate keystrokes, reduce exception handling, prevent fraud, and create more time for their front line employees to sell additional products to new customers.

Click the play button to start the video. To watch in full-screen mode, start the video, mouse over it, and click the expand button.

More details about Accelerated Insight here.

To learn more, please call +1 (650) 931-2350 or write to info@dragnetsolutions.com.

“Accelerated Insight” Provides Real-Time Identity Verification for Financial Institutions,
Accelerating Customer On-Boarding, Reducing Fraud, and Facilitating Compliance

NOVATO, Calif., Aug. 31, 2011 – Dragnet Solutions™, the identity verification company, announced today the immediate availability of Accelerated Insight^SM, a real-time identity verification solution for financial institutions.  The solution supports aggressive account creation and cross-selling activities while cutting operating costs, reducing fraud, and facilitating KYC/CIP compliance.  Accelerated Insight is offered as a Web service and provides easy, standards-based integration with the information systems that financial institutions already use.  A free trial of Accelerated Insight is available for U.S. financial institutions today.  For more information, visit www.dragnetsolutions.com.

Accelerated Insight uses powerful data-cleansing and fraud-detection algorithms to turn raw, hard-to-interpret consumer data reports into simple, clear decision-making guidance.  Simply submitting a name and current or previous address immediately returns the current address, a correct Social Security Number, and a proprietary exception analysis that helps prevent fraud.  Results are returned in real time—not in daily batches—instantly confirming customer identity and accelerating the on-boarding process.  Accelerated Insight reduces or eliminates error-prone keyboard input, dramatically reduces exception-handling volumes, and measurably improves customer experience.

“Accelerated Insight’s fast and accurate identity verification frees branch personnel to focus on delivering the best possible service and makes customer interactions far more productive and profitable,” said Gary Root, chief executive officer, Dragnet Solutions.  “Additionally, the solution reduces fraud and facilitates compliance with the USA PATRIOT Act and other regulations.”

A Dragnet white paper discussing identity verification solutions for financial institutions is available at www.dragnetsolutions.com.

About Dragnet Solutions
Dragnet Solutions provides real-time identity verification solutions to financial institutions, supporting aggressive account creation and cross-selling activities while cutting operating costs, reducing fraud, and facilitating KYC/CIP compliance.  Dragnet is privately held and headquartered in Novato, Calif.  For more information, please visit www.dragnetsolutions.com.   

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Dragnet Solutions is a trademark of Dragnet Solutions, Inc.  Accelerated Insight is a service mark of Dragnet Solutions, Inc.  Other names may be trademarks of their respective holders.

Media Contact:

Brian Danella
Prequent, Inc. (for Dragnet Solutions)
+1 (408) 275-6455 office
+1 (650) 743-6606 mobile
brian@prequent.com

In financial services, first encounters with customers are critical. Relationships are founded. Critical data is exchanged. And first impressions are formed.

Consider this:  nearly 75% of cross-selling opportunities occur within 90 days of an account’s being opened. But a lot of those cross-selling opportunities will misfire because of mistakes and missed opportunities during the customer onboarding process. Nearly 1 in 5 account creations will result in exceptions that will require review from a manager or a security expert. And 30% of accounts will be plagued by keystroke errors. That first glossy mailing welcoming a customer to your institution will not be received well if the customer’s name is misspelled.

At Dragnet Solutions, we’re applying advanced software techniques to help financial institutions make the most of their selling opportunities, while reducing or eliminating keystroke time and errors during the account creation process. And we’re experts at analyzing customer records to spot fraud—even synthetic identity fraud—right away.

We’ve just announced our new service, Accelerated Insight. Just swipe a new customer’s driver license in a mag-stripe reader, and Accelerated Insight instantly shows you the customer’s full name, current address, SSN, and security exception status. No more time lost to taking dictation or puzzling over old data on a driver license (30% of driver licenses have outdated information). We give branch personnel accurate information in real time, so they can get on with the business of selling. And integrating Accelerated Insight with branch office systems means that CRM applications and marketing materials have accurate customer data from the start. That’s accuracy that pays off time and time again in future selling.

You can learn more about Accelerated Insight here.

What are your biggest challenges in sales and fraud detection? Post a comment below or write to us at info@dragnetsolutions.com and let us know.