Managing Identity Risk though

Identity’s Attributes

Risk management strategies are often presented with two distinct challenges:

1.   Assessing the risk associated with existing customers

2.   And evaluating new consumers services.

But, what can a company  do to manage risk when it wants to offer products or services to brand new customers?

·        Many institutions ask for the prospective customer’s personally identifiable information (PII) and will submit it to a third party for purposes of authenticating the person’s identity or determining the risk for fraud and then , risk management solution providers can return summarized credit or fraud scores(are calculated using different identity attributes) which can be very useful at predicting the likelihood of default or risk ,for fraud based on the PII used in the application.

So ,whether an institution wants to authenticate an identity or prevent frauds or to optimize the decision, identity attributes are proved to be powerful tools that can reduce risk, while facilitating safe commerce.

Types of Identity Attributes:

There are multiple ways to categorize identity elements based on their use and the type of information available.

The following is a high-level overview of some of those categories:

1.Confirmed negative behaviour: Compares event information against confirmed, historic fraudulent events.

for example :Number of times confirmed fraud was reported using a Social Security Number (SSN) within last one, five, fifteen, or thirty days

2.Pattern: Examines anomalies in identity elements and general consumer behaviour.

Validation: Assesses the validity of input. Invalid input can highlight discrepancies that require resolution.

for example:

·        Name appears to be a business name

·        SSN likely frivolous (e.g., “123-45-6789”)

3.Velocity: Examines the frequency with which an input element has been asserted across a range of time periods. These attributes provide insights into behaviour that is out of the norm; the presence of increased velocity is potentially indicative of risk.

for example:

·        Number of events using address in the last 15 days

·        Number of events using SSN in the last year

·        Number of different industry segments in which the consumer has submitted an application in the last 30 days (e.g.,wireless, mortgage)

4.Verification: Assesses the legitimacy of input information.

for example:

•      Last name and primary phone confirmed

•      SSN and name combination reported as deceased.

But the most important thing is the principal determining factor of attribute quality which depend on :

1.   How accurate is  the data source?

2.   How often are the data sources updated?

•      For example:attributes derived from public records or white page data, which are only periodically updated, often present an outdated picture of identity risk.

3.   Do the attributes provide consistent geographic coverage?

•      i.e   whether a company is operating regionally or nationally, it’s important for an attribute provider to provide consistent geographic coverage

4. Do the attributes capture and represent consumer behaviors that are relevant, meaningful and important to the decisions being made?