Realtime Fraud Detection for listed lender

About our customer

The client is one of the biggest lender in consumer durable market in India

Industry

Finance, Banking

Use Case

Credit Risk, Fraud, Underwriting

We implemented the following solution for a leading financial institution of India. Our mandate was to reduce their defaults caused by fraud by 20%

The Challenge

The consumer durable financing is a new category in India. It is a real time and highly competitive product. Some major challenges in this market are:


1) Lack of industry wide data like CIBIL for this customer segment as they have been unbanked till now

2) Need to approve and disurbse loan in few minutes otherwise a good customer may go to the competitor

3) Consumer durable category is highly fraud prone as products bought can be easily resold in second hand market

4) There is high probability of collusion between loan officer and end customer

The Approach

We approached the problem through three different ways:

  • Figuring out customers prone to indulging in fraud based on past loan performance data. We then implemented a real time score card depending on customer attributes
  • Identifying loan officers indulging in fraudlent applications
  • We integrated with alternate data sources like True caller and Google Maps to improve the performance of score card

The solution we deployed was a scorecard exposed via an API. It was integrated with their CRM system. Some succint features of this scorecard are:

  • It rates customers on their propensity for fraud using past loan performance data of the institution and alternate data for customer
  • Initially, the scorecard was used only for manual intervention. Once the Risk team got confidence on the score card, its decisions were automated
  • We also developed an analytics dashboard for their risk team to enable them to track key metrics and flag any issues that may come up

We are now in process of deploying this scorecard for other product categories with minor tweaks. This scorecard based on alternate data is first one in India

The Outcome

The client saw a decrease in fraud of more than 21%. We are now deploying this solution for their other product categories.

Capabilities Enabled

Implemented a Real time fraud analytics solution which helps identify the riskiest segments and enables Risk team to flag fraud prone loan applications

Impact Created

Reduced the fraud in their loan application by slightly more than 20%. This enables them to grow their offering much faster