Merging Physical Data With Digital Identity Offers More Realistic View of Consumers, Businesses

A year ago, with the pandemic in full swing and many stores and businesses shuttered or operating under restrictions, digital commerce was pretty much the only game in town. With that surge in online activity came the growing expectations that commensurate gains in digital fraud and identity theft would not be far behind.

For consumer credit reporting agency Equifax, that ominous prediction played out in the form of its $640 million acquisition of Kount. It was a purchase called a “big deal” at the time and one that looks to be every bit as prescient today, as the digital shift has shown no signs of abating.

“You take Equifax as a parent,” Kount Chief Revenue Officer Jared Kernodle told PYMNTS, and combine that 120-year-old data-centric company with Kount, which has been using digital analytics and artificial intelligence (AI) for the past 15 years, “and fraud prevention is just table stakes of these companies coming together.”

Just one year in, Kernodle said Kount is just hitting its stride by pulling from its parent’s vast physical data sets and combining that with its wealth of digital data to combat a fraud and chargeback wave that’s harming consumers and endangering businesses in 2022.

See also: Equifax Completes Purchase Of Kount

Differentiated Data at Work 

When Kernodle said fraud prevention is “table stakes” for the Kount/Equifax tie-up, he was referring to other keenly needed capabilities of the combined companies.

Using what he calls a “unique blend of differentiated data between physical and digital,” he said it goes beyond the common fraud signals, and sometimes even beyond fraud itself.

“The way I look at it is 5% of CFOs have a fraud problem, but 100% of them have a revenue problem. [Kount and Equifax] can help these businesses drive a better experience, but also reduce fraud and reduce bad actors,” he said.

It’s more than figuring out who’s a fraudster or a bad debt credit risk, he said. It’s the ability to look deeper at things like debt-to-income ratios or a consumers’ propensity to pay. As a result, Kernodle said the combined entities could help merchants and institutions make better decisions on good and bad customers.

With an ocean of differentiated data now at Kount’s disposal, the Idaho-based firm can now “drive a more optimal, customized and frictionless experience,” a common refrain in payment circles presently but one that Kount began talking about over five years ago.

“When you start appending physical information to [digital], you start getting into the actual nitty gritty of who [the consumer] truly is,” Kernodle said. “What other data elements represent [them]? All of this evolved over time, and this combination of physical and digital allows us to interact with consumers and businesses as if they were physically present.”

See also: Fraud Control Is Switching Slant to Digital Enablement and Frustrating Fraudsters With Data

Digital Identity and the Customer Journey 

At the time of the deal, Sid Singh, president of United States Information Solutions (USIS) at Equifax, said the acquisition further positioned Equifax as a “major global player in digital identity trust,” which is increasingly important as eCommerce and consumer finance converge.

Then, as now, trust is at a premium as evildoers grow more sophisticated by the day — sometimes through the backing of rogue states — and upping the value of trusted digital identity.

Kernodle uses his own experience of being able to buy a house, sight-unseen, as part of his move to Kount headquarters in Boise as an example of both digital progress, as well as an eye-opener that many digital screens and document requirements were still “very clunky” and ripe for improvement.

“What I’ve seen change [in] the year that the two companies have been together is that we’ve been able to deliver this digital data, this digital identification of who you are, cap that with a persona and a customer history,” he said, adding that they’ve done so without compromising the white-glove treatment that merchants, mortgage firms and banks want to deliver to the consumer.

Kernodle said, “We always want to be able to prevent fraud. That’s going to [remain a] big focus for us, and now we get to combine some of the data that we have across the globe with Equifax to be able to enhance that and make it more strategic. We’re going to be able to enhance the customer journey through actionable insights.”

See also: Equifax to Include BNPL Plans in Credit Reports