To grow or not to grow: That is the question for consumer lending businesses as the risk of fraud looms.
The P2P lending industry is seeing some pretty amazing growth of as late, particularly in developed countries with strong financial markets. P2P marketplaces in the U.S., for example, issued loans worth $889 million in 2012, $2.9 billion in 2013 and $6.6 billion in 2014. By 2016, P2P lending in the U.S. will reach $32.8 billion.
Still, there are some serious risks that could have a significant impact on the lending industry as a whole, not the least of which is fraud.
For a wide range of lending institutions, fraud is a particularly painful form of risk – one that can prove damaging to both their bottom lines and, perhaps more significantly, their reputation and their brands. As a result, online lending services that pair borrowers with investors, for example, are being forced to simultaneously balance unprecedented demand while stopping fraudulent transactions.
To control fraud risk, a healthy blend of manual investigations, rich internal analytics and requests for numerous identification documents does a pretty good job. However, while these techniques can show good results, they’re often expensive, friction-heavy, and due to their heavily manual nature, not easily scalable.
Which begs the question:
As consumer lending entities continue to experience unprecedented growth, how can the industry scale business without scaling risk?
In our next webinar – Mitigating the Risk of Fraud in Consumer Lending – we’re going to tackle that very challenge. I’ll be joined by iovation’s Matt Giberson and Kevin King of ID Analytics in what will surely be a revealing discussion about preventing lending fraud at loan origination. We'll also discuss:
- The latest lending fraud trends.
- The scale at which fraud loss impacts the lending industry, and
- How to determine a transaction’s risk level by analyzing anomalies around velocity, geolocation, Real IP and other factors.
The webinar will take place May 24th at 10:00am PDT, so be sure to register now to secure your spot.
We look forward to having you join the discussion.