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Building trust: the foundation of banking relationships
Like all healthy relationships, banking is built on trust. Sadly, a few bad actors continue to force banks into making the credit approval process more inconsistent, opaque, and seemingly insurmountable for inexperienced applicants. Despite the most robust risk management programs, global financial fraud will spike to $41 billion per year by 2027, according to research cited by BAI.
The rising tide of financial fraud
Falsified paper documents present a particular challenge. Every day, disturbingly novel ways to fudge paperwork emerge, from DIY paystubs and detailed lease agreements to fictional utility bills and borrowed social security cards. It’s the business equivalent of catfishing – clearly not an auspicious match – and it’s costing banks far more than just wasted time. In one elaborate bank fraud case that spanned six years, a San Diego man directed “straw borrowers” to prepare loan and credit card applications on his behalf with falsified identities, pay stubs, W2 forms and bank statements. In North Carolina, a woman boasting of her niche in fraudulent documents advertised a price list for driver’s licenses, Social Security cards, paystubs, lease agreements and COVID-19 hardship letters. And in New Jersey, a woman conspired to defraud banks by collecting applications from low-income customers she’d promised to help, then altering information – such as creating bogus jobs, fabricating pay stubs or inflating income – to make them appear more qualified on paper, mostly for her benefit. The scheme cost banks about $4.5 million.
Pinwheel's Verify solution: a game-changer in fraud prevention
It is clear that credit risk departments need to innovate faster than fraudsters. To support this mission, Pinwheel developed Verify, a powerful decisioning tool that allows financial institutions to access real-time sources of current and historical income and employment data for all U.S. workers. Sourced directly from payroll platforms, our consumer-permissioned data verifies a credit applicant’s employment and income directly from the system of record. These actionable insights eliminate fraud associated with paper documents, reduce manual processing errors, and expedite application decisions. Pinwheel is also the first payroll data connectivity provider designated as a Consumer Reporting Agency (CRA), providing new, insight-rich context for improving decisioning via FCRA-permissible purposes.
Integrating seamlessly for enhanced security
Sixty percent of banks surveyed by BAI are investing in new mechanisms to address fraud. But this technology needs to do more than wave red flags. Any sustainable solution truly worth its investment should embed seamlessly with user experience, provide the broadest payroll-platform coverage, and replace paperwork with document uploads and ongoing streams of data. That agility empowers risk managers to make informed decisions while streamlining – and strengthening – banking services, especially as consumers migrate to online relationships with their trusted institutions.
Contact us to learn more about how Pinwheel solutions can bolster your credit decisioning and lifecycle management program, while discouraging fraudsters from wasting their energies and your valuable resources.
