Groceries, transportation, relationships, entertainment, and more are all now “available at the swipe of a smartphone,” the team at Inscribe notes in a blog post.
Buyers have come “to not only enjoy — but expect — frictionless interactions that provide instant gratification.” Fast response times are “no longer a perk; they’re the most important attribute of the customer experience,” Inscribe writes in a recent update.
But an increasingly digital, geographically dispersed, and faster world “makes it more difficult than ever to know who you’re doing business with — leaving companies uncertain about which potential customers are trustworthy.”
According to Inscribe, these fears are justified: New research shows “that the average U.S. fintech loses $51M to fraud annually, and the impact of fraud has a negative ripple effect across the entire company.”
In response to this uncertainty, businesses have “asked potential customers to submit more and more information about themselves during the application process: where they live, how much they earn, proof of business ownership, credit history, and more.”
They often also “ask for documentation (such as bank statements, utility bills, W2s, etc.).”
Hundreds of hours each week are then “spent manually reviewing those documents to determine whether the information provided by a potential customer is legitimate.” All of this creates friction for consumers, “who can easily leave for a competitive offering.”
Assessing the trustworthiness of potential customers has now become:
- Manual: Overwhelmed with document reviews and struggle to support a growing business without increasing risk.
- Subjective: Reliant on educated guesses to identify manipulated documents, leaving their business open to fraud and credit losses.
- Painful: Customers are forced wait hours, days, or even weeks to access financial products.
Without a clear understanding of how to identify trustworthy and creditworthy customers, financial institutions may be “defrauded by cybercriminals or reject worthy applicants (resulting in millions of unbanked, “thin file,” and credit invisible consumers).”
The best risk teams are “armed with experience and intuition. When something isn’t right, they can sense it.”
But uncertainty has “become a plague for them.” While an online approach has given companies access to more data than ever, they struggle “to uncover the insights needed to assess risk and build digital trust.”
But a world powered by digital trust is possible, according to Inscribe.
The firm added:
“We set out to help solve the uncertainty faced by risk teams everywhere by building artificial intelligence based on the heuristics used by manual review teams. So for the first time ever, they 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.”
They also mentioned:
“Technologies that make what’s invisible, visible (like the telescope, the microscope, the x-ray) have always moved society forward in very powerful and important ways.”
They further noted that they got their first glimpse of the potential for this technology when fintech brands like TripActions, Ramp, and Bluevine adopted their solution and immediately shared the ROI from reduced fraud losses.
And they wanted “to see more.”
For instance, can we “reliably automate other parts of the manual review process like analyzing creditworthiness?” And “what other data inputs can we check to ensure legitimacy?”
With AI, the answer is “yes.” And it’s “only the beginning.”
According to Deloitte, 79% of financial institutions said “that enhancing the quality, availability, and timeliness of risk data was a top priority even prior to the pandemic.”
Risk leaders, like cybersecurity professionals, want “to enable their businesses to grow responsibly.”
They are looking “to eliminate uncertainty about their potential customers.”
As noted in a blog post:
“So we’re making a bold leap in 2023 to introduce Risk Intelligence, a powerful new 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. This allows them to effectively build digital trust and, ultimately, approve more customers with confidence.”
As mentioned in the update, the firm started empowering teams “with Risk Intelligence by building best-in-class document fraud detection so fintechs and financial institutions could accurately analyze the legitimacy and credibility of documents supplied by applicants.”
Then they saw companies throughout financial services adopting their solution “to determine the trustworthiness of the people they do business with as well.”
General Services Corporation (GSC), a provider of apartment homes and apartment management services, purchased Inscribe “to build digital trust with tenants and has been able to effectively mitigate evictions.”
As confirmed in the announcement:
“Now, we’ve raised $25M in Series B funding to expand the breadth of our fraud detection capabilities, as well as introduce state-of-the-art Risk Intelligence innovations.”
The investment round was “led by Threshold Ventures and joined by Crosslink Capital, Foundry, and Uncork Capital.”
They were also “joined by Forum Ventures, as well as angel investors including Box co-founder Dylan Smith, Intercom co-founder Des Traynor, Irish entrepreneur Mark Cummins, and Figma VP Sales Kyle Parrish, bringing our total amount raised to $38M.”
For more details on this update, check here.