Risk Intelligence: A Complete Overview

In today’s digital world, customers expect the same fast, seamless experience whether they are shopping for a sweater or applying for a loan. Unfortunately, for financial services organizations, such as banks, credit unions and credit card providers, making smart decisions about which customers to serve and which products they are best suited for takes time.

The underwriting process for a mortgage, for example, can take several days or even a month. The underwriter or risk analyst manually reviews the documentation submitted with the application and verifies key points, like the person’s salary and employment status. Estimates for other requests, like personal loans or housing applications, can be similarly painstaking, often taking up to a week or more.

Unfortunately, as digital fraud continues to rise, it’s likely that these timelines will only stretch longer as decision-makers at banks, financial institutions and rental agencies request more information to establish the creditworthiness of their potential clients and ensure they are not doing business with high-risk individuals.  

But here’s the catch: More information doesn’t always equate to better decisions, especially when fraudsters can easily manipulate documents or use online templates to create fake ones. What it does mean is longer wait times for your customers, as reviewers manually pore over those documents, like bank statements, employment contracts, pay stubs and utility bills.

The cost of fraud for businesses and customers

This issue has a real impact on companies: New research shows that the average U.S. fintech loses $51M to fraud annually – and that’s to say nothing of secondary costs, like dips in productivity during the underwriting or application process, time spent following up on delinquent accounts, legal fees and more.

There’s real pain on the customers’ end too. When a suspicious application is flagged for further review, it slows down the process for all clients. That means legitimate and creditworthy customers must wait longer for decisions at a time when they expect instantaneous results. With every hour that ticks by, the chance that they will move on to a competitor increases.

So what’s the solve? In today’s high-risk, fast-paced, and ultra-competitive landscape, risk teams need to combine their hard-earned experience and intuition with new and powerful technologies to enable better, faster decision-making. In this post, we’ll explore the emerging field of risk intelligence and how it is changing the underwriting and application process for the better.

What is risk intelligence?

Risk Intelligence is an emerging and evolving field – and Inscribe is at the very forefront of the movement.

Risk Intelligence is the most powerful way for risk teams to identify fraudulent/legitimate and risky/creditworthy customers. Instead of relying on tedious, subjective, and error-prone manual reviews, teams that use risk intelligence software are equipped with AI-powered fraud and credit insights that eliminate uncertainty and make risk decisions easier. With risk intelligence, companies can effectively build digital trust and approve more customers with confidence.

The value of risk intelligence

Risk intelligence can help your company:

• Reduce fraud and credit losses 
• Identify signs of manipulation or fraud in seconds
• Identify fraudulent documents with enhanced precision and accuracy
• Approve creditworthy customers with a high degree of confidence
• Eliminate tedious, subjective, and error-prone manual reviews
• Build digital trust and expand your competitive edge

Traditional risk assessment vs risk intelligence

To understand the value of a modern risk intelligence program, let’s review how this capability differs from traditional risk assessments.

Traditional risk assessment processes are…Modern Risk Intelligence is…Manual
Risk teams are overwhelmed with document reviews and struggle to support a growing business without increasing risk.
Digital
AI-enabled software produces clear and actionable insights that help risk teams make the best decision – fast.Subjective
Risk analysts take educated guesses to identify manipulated documents, leaving their business open to fraud and credit losses.
Objective
Risk Intelligence is based on AI-enabled technology that is guided by clearly defined standards and metrics – not hunches, guesses, or intuition, which may also be clouded by human perception and bias.
Painful
Customers are forced to wait hours, days, or even weeks to access financial products.
Efficient and effective
Companies review documents and identify signs of fraud or manipulation in seconds –giving customers the answers they need and the experience they expect, while freeing up staff to focus on higher-value tasks

The benefits of risk intelligence

Risk intelligence drives growth and profitability.

Risk intelligence is an important way for companies to not only reduce risk, but also fuel growth and profitability. This is done primarily through process automation, which increases speed and reduces the cost of reviewing each document. 

What’s more? By eliminating pain-staking, time-consuming manual reviews, the organization can cut down on workforce fatigue, which may contribute to poor or incorrect decisions. Finally, by automating routine and repetitive tasks, risk teams are free to focus on higher-value, customer-facing work – activity that helps the business flourish.

Risk intelligence improves accuracy and reduces risk. 

Risk intelligence also prompts the organization to think about risk in a more structured and comprehensive way. As part of this process, businesses must define risk and outline the standards by which to measure them, as well as mechanisms that will be used to identify them. 

In so doing, risk assessment is no longer subjective, but objective – and therefore more consistent and effective. Instead of manually reviewing all documents for signs of fraud, analysts can now spend time focusing only on those cases that truly need their attention. Best of all, with the help of risk intelligence software, analysts typically have more confidence in their decisions and can more easily articulate the logic for questionable cases.

Risk intelligence helps create a more fair and equitable financial system for all. 

On a broader level, risk intelligence can also help create a more fair and equitable financial system for people by helping millions of unbanked, “thin file,” and credit invisible consumers access the products and services they need. 

When banks, financial institutions and other companies eliminate obvious cases of fraud with the help of a risk intelligence tool, they have the option to take on legitimate customers that they may not otherwise be able to serve.

What can modern risk intelligence software do? Key capabilities and use cases

Risk intelligence software is invaluable to modern businesses, helping them drastically improve both time- and cost-to-serve, while also reducing fraud and credit losses. Taken together, these metrics help reduce risk while also fueling growth and profitability.

Risk intelligence capabilities

Identity verification: Review documents that are flagged by an identity verification platform for further review.

Document collection: Collect any additional proof of identity or ownership documents during onboarding. 

Data digitization: Automate tedious activity like classifying, parsing, and matching names and addresses when additional info is needed.

Fraud detection: Identify instances of fraud within a document in seconds. Pinpoint exactly what’s been altered

Automatic decisioning: Auto-accept, auto-reject, or get notified when to review documents. Support clear, fact-based decisions.

Risk intelligence use cases:

• Account opening, Know Your Customer (KYC) and Know Your Business (KYB)
• SMB lending, personal lending, underwriting
• Auto loans
• Mortgages
• Tenant screening
• Cryptocurrency
• Insurance and claims processing
• Debt verification and income verification
• PO processing and invoice processing
• Expense reports
• Tax forms
  

Get to know Inscribe – the leader in risk intelligence

At Inscribe, our mission is to help solve the uncertainty faced by risk teams everywhere by building artificial intelligence based on the heuristics used by manual review teams. For the first time ever, companies can build digital trust by quickly analyzing billions of data points with a high degree of accuracy and uncovering insights that were previously invisible to the human eye. We consider ourselves to be the latest example of a technology that makes what’s invisible, visible– not unlike the telescope, the microscope, or the x-ray.

To learn more about Inscribe’s award-winning risk intelligence technology, please contact us to set up a free demo.