Too much data can pose security concerns, and it can become overwhelming to manage. Verizon, in its latest Data Breach Investigations Report, finds most organizations get overwhelmed with too much data.
Chris Novak, who works in Verizon’s investigative response unit, says most organizations struggle to collect the right data and properly store it. “They don’t necessarily know where they have data … and how it’s being handled,” he says.
Like all organizations, financial institutions struggle with data. But many banks outsource data management to help ensure the data they collect is, in theory, protected and properly managed.
Can Data Reduce Fraud?
Here’s the question: Could institutions take advantage of their data to support fraud prevention? Experts at credit reporting bureau Experian say yes.
Experian is pushing ID theft management in a new way: to help banks prevent and detect fraud. Keir Breitenfeld, director of product management within Experian’s decision analytics team, says banking institutions are doing better jobs of capturing data.
“Institutions are saying, ‘We have to have a more enterprise-level approach,’” he says. “They know they need to warehouse data, so they can bring channels together, from a cost perspective and customer experience perspective.”
But the residual effect is that banks have a lot more data at their fingertips to track accountholders, rather than just accounts, for fraud.
The ability to capture data and warehouse it has improved so much that credit bureaus now have the ability to provide customized scores for individual accountholders.
So, the more data banks can leverage about new accountholders, in particular, the better their chances are of detecting fraud.
If banks routinely compare the data they collect about customers with information credit bureaus store, they could improve their fraud detection rates on new accounts by 20 percent or more, Breitenfeld says.
“If you can monitor accounts after they are opened, you can better detect fraud.”
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