At this time of year, we see a lot of St. Nicholas — originally a fourth century Christian saint who seems to have had a reputation for secret gift giving, and who is part of the legend we now know as Santa Claus. The fables derived from the historical figure are many, varied (especially from country to country) and a source of joy to many people across the Christmas period.
Of course, at any other time of year the very idea of someone sneaking uninvited into one’s home — and not through the front door — at night while the household sleeps would be considered most unwelcome! But Santa Claus embodies trust; he’s a giver, not a taker. In The Miracle on 34th Street, Kris Kringle is threatened with losing his freedom and his livelihood because of his outlandish claims about his true identity, until (spoiler alert!) he is saved by the belief and trust that others place in him.
This is a timely reminder for all of us who are involved in trying to authenticate individuals for reasons of regulatory compliance, customer confidence and assurance, or fraud protection: It’s critical to be able to build absolute trust in the person and the interaction.
Many of the front-line staff in service industries are trained to provide empathy, help and assistance to customers. It is essential that these staff get the customers to trust them, but it’s equally important that they recognize when individuals might be trying to leverage a sense of trust for their own purposes. If a burglar were to dress in a red coat and hat, and slap on a white beard, would you welcome them into the house?
We absolutely do not want to see staff viewing every interaction with suspicion, nor challenging trust and belief in what customers are representing. After all, the overwhelming majority of customers will be acting completely in good faith, and fraud loss levels in mature credit markets, such as EMV payment card markets, are less than 10 basis points, or 0.1%, of genuine spend. And yet, this year I’ve written about several cases of social engineering, involving phony PC support, property scams, and even fake announcements of Prince George’s birth, all of which involved criminals pretending to be someone or something else in order to gain access to customer data that they can monetize, or to funds that do not belong to them. These are clear-cut cases of fraud, and they speak to the need for all customer-facing staff to be watchful, if not wary.
So how do you verify your customer without alienating them? How do you check Santa’s ID without tugging at his beard?
We at FICO have been focusing on several important technological advances that permit customers with legitimate intent to carry on their business unhindered, whilst making it increasingly difficult for those who might otherwise call into doubt the integrity of supposedly legitimate actions. These advances include application fraud management, customer communications services, identity resolution and proximity correlation.
More innovations are to follow in the authentication and trust space throughout 2014. Just like on 34th Street, in your business with customers you should be able to say with confidence, “I believe in you.”
Have a safe and trouble-free holiday season.