Ingo Money will launch a new fraud risk management tool in May

Long live digital transformation — given that it’s secure.

Ignoring stock market fluctuations and the macro economy, the fact is that we are far from done applying new digital approaches to solving intractable payment problems, namely fraud.

The mobility of money, for example, is hampered at every step by fraud and risk despite billions of dollars of investment, because fraudsters also have great resources. There is a constant need to put money in transit and enable new transfers and payments while managing risk.

To this end, FinTech Ingo Silver launches its new inbound digital transfer and risk management services to market in May, taking a new approach to fraud and risk management. It is an application programming interface (API) with some exciting new features.

In conversation with Karen Webster of PYMNTS, CEO of Ingo Money Drew Edwards and Executive Vice President and Chief Product Officer Lisa McFarland spoke about the new offering, designed to protect issuers against fraud risks associated with inbound debits, digital wallets and wire transfers, without introducing friction to the customer experience.

Why now? Edwards said the request came from virtually all banking-type entities.

“Traditional banks that are going digital and opening new accounts online, neo-banks or challenger banks or issuers of all types in this space that are opening new accounts and looking to fund those accounts securely and undergoing fraud,” he said. mentioned.

Giving a somewhat grim assessment, McFarland said that when issuers are faced with fraud, they cannot adequately control their response.

“Unfortunately for them and for their customers, [their answer] has been to restrict access to this kind of remittance capability,” she said. “They have no way of dealing with it, so they just… cut it completely.”

It’s money immobility, which is contrary to payments. Inbound Digital Transfer and Risk Services aims to allay issuers’ fears in this area by taking responsibility for the risk itself.

Calling the new service “very similar to what we’ve done historically,” Ingo’s specialization in paper check fraud and related forms is more than a decade old, well-practiced and data-rich.

That’s because Ingo cut her teeth on the paper check – “a very risky instrument”, she said.

While neobanks and legacy financial institutions (FIs) all came seeking risk expertise, “[w]We have really set about applying our techniques, our experts to solve this problem for incoming transfers from accounts, debit cards, etc. “, she said. “That’s really what led us to the launch.”

See also: What is a monetary mobility network?

Telltale Data and a new zero fraud guarantee

McFarland explained that when Ingo Money processes transactions for customers, it collects customer risk attributes from the customer and, in the background, monitors for telltale signs of fraud.

Predictive customer data is enriched with transactional data collected in real time.

“We collect device-related attributes … the location where a transaction takes place, consumer behavior when interacting with the site or app, and account-related attributes,” she said.

By gathering as much data as possible and supplementing it with additional third-party data that helps with risk modeling, “we are able to go through this process of scoring a transaction,” she added.

“We have the added advantage that we manage risk holistically across our entire network,” she said, referring to Ingo Money’s strong footprint in the digital financial services space and its ability to identify fraudulent activity with a customer and systematically reduce or eliminate the risk for all. others, a technique that has proven effective with check risk management.

However, as Edwards put it, perhaps the biggest differentiator is that Ingo Money “offers a Fraud Guarantee as part of this service package.”

“Our gateway can process these inbound transactions,” he said. “We’re adding risk management for minimal additional cost…leveraging all of our data, machine learning, and expertise.”

He added: “We offer the zero fraud guarantee at an additional cost for those who just can’t stand it or are afraid of it, but also to make sure people understand that we eat what we kill. We are prepared to put our balance sheet and our name behind these transactions.

Edwards compared a FinTech trying to manage this risk on its own to being on an island. With visibility across all of its customers, Ingo is better able to control bad actors. Its customers benefit from the experiences of the wider market.

In other words, island-hopping FinTechs have the advantage of having more data and an overall experience with more types of fraud.

Edwards said the company’s primary goal was not to build a customer base, to market, to acquire customers, to advise robotics, or “any of that kind of stuff…we [move money for our clients, which means that we] deal with bad actors [trying to game the system] every day all day. We’re good at that.

Calling checks and digital transfers two of the main methods of funding accounts, Edwards said: “We do [our expertise and what we have learned over the years in managing check fraud] available to the wider market to help solve the problem of incoming money.

Read also: Responding to consumer mobility needs

With speed comes risk; Some verticals are worse than others

McFarland said the new solution supports straight-through processing at a basic level. It adds a risk-managed funds transfer service for “a small additional fee, but it does provide a risk rating associated with each transaction where we return a risk rating to our client and give them the option to determine if they want to move forward with treatment.

In addition, there is a zero fraud guaranteed funds transfer service. Customers can “choose to insure all customer transactions, or categories of customers like all new users, or all customers transferring funds from a new source account,” she said.

Edwards added that “if we decline a transfer or refuse to guarantee a transfer, our client can still cancel and process that transaction, which we also understand to be a market differentiator.”

Asked about the scale of the inbound transfer problem for FinTechs, Edwards replied, “It’s as big as this new issuance universe.” He marveled at the meteoric growth of non-banks and the scale of the difficulties they face in securely funding many new types of digital accounts.

Among non-banks, he said, imagine that “they have now opened a brand new account, which they can do faster than anyone else. They’re really good at acquiring customers,” but bad actors gravitate to these new players and role models, and they play them as fast as they can.

Making funding an account as quick and easy as opening an account is essential. And yet, with speed comes a greater risk of fraud.

Cashless accounts are of no practical use to anyone, and more than two years after going digital, the industry is still grappling with this complex issue.

Calling it a “monumental problem for everyone,” Edwards told Webster that “it just doesn’t work having this awesome customer acquisition strategy and being able to open an account, KYC, the customer, do the all in 15 minutes…and then upgrade to a trial deposit on an ACH before making the funds available within a week or mailing a check.

“It comes to a screeching halt and they’re losing a lot of customers that they’ve now incurred acquisition costs for,” he said.

He admitted that “there will be more risky vertical markets”. But this is built into the new solution.

Risk management requires “a market-wide view and the ability to spot patterns and being able to apply the tools to make judgmental decisions, much like lending money”, a- he declared.

“How likely is it to go wrong for you?” ” he said. “It’s not a perfect science. But we believe wholeheartedly that you cannot solve this problem effectively on an island.

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