Every industry, from retail to pharma, is learning how to adapt to the mobile revolution. Fast. Financial Services is no different. Pinsent Masons, discussing the results of an Ovum survey, states “mobile banking will be ‘the clear IT investment priority in 2013’ for banks.” Location is going to be the game changer. The financial organizations using location-based services will have the competitive edge.
Locaid is helping 7 of the top 10 banks to reduce fraud, stop identity theft and reduce false positives. How?
Locaid uses the location of your mobile phone as an additional layer of verification. If your mobile phone is in the same location as the one the transaction is initiated in, it's most likely legitimate. However, if your mobile phone is in San Francisco and the credit card is being run in New Jersey, there’s a good chance that it is an illegitimate transaction. Your bank can then plug that data into an algorithm to determine if a fraudulent activity flag is necessary. Watch me explain in in less than 60 seconds here.
Consumers would need to opt-in for this feature, preventing banks from tracking their customers’ mobile location without them knowing. Locaid's solution meets the strict requirements of the FTC's Mobile Privacy Disclosures.
As a CLO, it’s amazing to me that banks and merchants have this technology at their fingertips, and yet it is not being used. Credit card fraud is rampant, and it’s not cheap. A 2009 Lexis Nexis study found that, “Merchants in the United States are losing approximately $190 billion a year to credit card fraud… Banks lose $11 billion and customers lose about $4.8 billion.” If that’s not raising a red flag in the annual review, I’m not sure what is.
The money spent on fraud in the US is eye opening, and that doesn't factor in the time it takes resolve a fraud claim. Our research shows that it takes an average of 21 hours for a consumer to resolve a claim.
I've had fraudulent activity happen on my cards, and it always occurs thousands of miles from where I am. And that’s only the fraud I've noticed. Unfortunately, 65% of fraud goes undetected. Using location as an additional layer of verification is the smart thing to do for your business, your customers and your profits.