Pressure to Acquire: How Businesses Can Continue to Grow More Profitably While Preventing Fraud

With new customers being vital to your business — outmaneuvering the competition can come down to providing a smoother digital experience while better preventing fraud.

In fact, two in three consumers said they’d likely switch financial institutions for a better digital experience, according to TransUnion research conducted earlier this year.¹ Providing a positive digital experience goes beyond simply enabling seamless transactions. More and more, consumers expect — or rather demand — secure online experiences. And as the rate of suspected digital fraud grew 52.2% over 2019–2020,² these expectations will likely continue to increase over time.

For many organizations, security comes at a cost

One challenge for nearly half of organizations is their current security tools can add friction to the process, which can drive customers away.³  Another is their tools generate too many false positives, ultimately rejecting real, qualified customers, according to the TransUnion commissioned Forrester report: The Projected Total Economic Impact of TransUnion TruValidate Identity Exchange.

Organizations can find themselves in a bit of a catch-22: Introducing security measures that may reduce their chances of acquiring new customers. With fraud instances and demand for safer digital experiences both growing, investing in fraud and identity solutions can help boost both acquisition and retention rates.

Targeting new customer segments and business models

Providing a more secure, friction-right digital experience can be a market differentiator, especially in industries that are prominent targets for fraud. As well, innovative fraud solutions can also help enable organizations to land new business.

Leveraging robust, global datasets - and tools that apply multifaceted modelling and predictive analytics — can help organizations assess and improve the risk management of no-hit populations (e.g., no credit report on file), including new-to-credit consumers. This allows organizations to more confidently pursue consumers with thinner credit, expanding their available acquisition pools.

To offer personalized experiences to these new (and existing) consumers, businesses need a more holistic view of each individual. Diverse data elements that work with traditional credit bureau data like inquiry logs, application and consortium fraud data can help. This enhanced view enables the business to align the consumer experience to the appropriate risk level of each transaction.

Building consumer trust with TransUnion

TruValidate Identity Exchange is an identity risk-management solution that helps enable you to reduce fraud losses, increase acquisitions and improve profitability.

Our commissioned Forester report⁴ found after investing in the solution, interviewed customers projected these benefits:

• Increase fraud capture rates by up to 25%
• Decrease friction and dropout rates for customers applying for credit/new account approval who are low risk for identity fraud
• Reduce false positive rates — meaning fewer qualified customers are rejected
• Enable smoother onboarding, leading to more balances
• Reduce the volume of manual reviews by an average of 32.5%

For more insights on how TransUnion TruValidate Identity Exchange can specifically help your business grow more profitably, download this infographic.

¹ TransUnion 2022 Consumer Pulse Survey

² TransUnion 2022 Annual Fraud Trends Report

^{3, 4} The Projected Total Economic Impact of TransUnion TruValidate Identity Exchange, Forrester Research, Inc., March 2022. A commissioned study conducted by Forrester Consulting on behalf of TransUnion.