Banking Under Siege: Building Resilience Against Rising Fraud

[Music Playing]

Jim Marous (00:12):

Hello, and welcome to Banking Transformed, the top podcast in retail banking. I'm your host, Jim Marous, founder and CEO of the Digital Banking Report and co-publisher of The Financial Brand.

Jim Marous (00:22):

Since 2020, financial institutions have faced a perfect storm: rising funding costs, increased delinquencies, and now, a dramatic surge in sophisticated fraud attacks. We're joined by two experts from TransUnion who are at the forefront of understanding and combating these threats. Joshua Turnbull, the VP of Card & Banking Strategy, and Craig LaChappelle, the VP of Market Development.

Jim Marous (00:47):

They'll share insights on why fraud losses are becoming more painful in today's high-cost environment, how fraudsters have adapted their strategies in a post-pandemic world, and more importantly, how financial institutions can build resilience against these evolving threats.

Jim Marous (01:04):

Whether you're concerned about the 37% increase in synthetic identities, the fact that 30% of online applications now come from bots or the alarming spike in early default rates, this conversation will equip you with the knowledge and strategies needed to protect your institution and your customers.

Jim Marous (01:28):

For financial institutions navigating a very complex, threatening landscape, the message is clear: integrated approaches, advanced data analytics, and adaptive strategies are essential to stay ahead of an increasingly sophisticated fraud attack net landscape.

Jim Marous (01:46):

So, Josh and Craig, before we start, and I know you've been on the show before, could you introduce yourselves to our audience and share a little bit about your background? Josh.

Josh Turnbull (01:56):

Sure. Thanks, Jim. So, Josh Turnbull, I am with TransUnion, obviously, lead our consumer lending business. I've been with TU for, gosh, 11 years, but spent my whole career in financial services, most of that thinking about strategies for managing consumer risk and fraud.

Craig LaChappelle (02:11):

Thanks, Josh, I guess it's my turn. So, Craig LaChappelle, I lead our U.S. strategy for financial services. I've been at TransUnion over 15 years, let's leave it at that. Long experience though in banking, technology as well as management consulting.

Jim Marous (02:31):

So, Craig, TransUnion really approaches fraud categorization differently than most other organizations. Can you walk us through a little bit about the main types of fraud that you're seeing organizations contend with today, and how you frame these challenges between new account fraud, credit abuse, account takeover, whatever it may be? Because I know this just coming at us from all angles right now.

Craig LaChappelle (02:55):

Sure. Yeah. It's a great question, in many ways, it's a fundamental question. We like to simplify the descriptions of fraud abuse for our sales teams, but also when we're having conversations, because it's what we do a lot when we're serving customers, we have conversations, we offer insight.

Craig LaChappelle (03:13):

And I think whether it's us or others in the industry, we tend to get caught up in descriptions that well, they could be a little arcane and maybe not that descriptive, but we get caught up in trying to define who the fraudster is instead of what the fraudster does.

Craig LaChappelle (03:31):

So, we like to really frame it as to how our customers both tend to organize, but how they think conceptually, how they have to defend against different types of attacks, and you touched on some of them, but we like to think of it in four ways.

Craig LaChappelle (03:47):

I'll list those out and then I'll go in more detail in each. New account fraud, credit abuse, account takeover, and data harvesting. And actually, I'm going to go reverse order in describing a little more detail.

Craig LaChappelle (04:02):

Data harvesting a lot of times is the root and underpins the attacks in the other areas. And that is essentially gathering consumer data or gathering access to consumers’ accounts, doing things like inbound, call center phishing, consumer impersonation, accessing data through breach. That's data harvesting, and then essentially storage and warehousing of it.

Craig LaChappelle (04:27):

And that enables these other three, which is new account fraud, which is, as it sounds, new accounts that are open either with stolen, manufactured, or synthetic IDs that are used to commit fraud, either gain access to credit they shouldn't be theirs or to commit transactional fraud.

Craig LaChappelle (04:47):

The next category is credit abuse. And this one, it's really the same thing as what we've often heard in the industry called first-party fraud. And that is real consumers that knowingly gain access to credit or misuse the existing accounts for their own financial gain. Essentially borrowing with no intention of paying back.

Craig LaChappelle (05:14):

The last major area: account takeover. And this is a big one particularly recently with things like call spoofing. But that is gaining access to an existing account, pretending you are an account holder to get access either to those funds or to the ability to borrow funds. And it's enabled by a call spoofing, tech spoofing, or social engineering. So, those are really the big categories that we like to think about, and we advise our customers on.

Jim Marous (05:47):

Well, it certainly helps manage the process and as you said, when you take it in the category of where it occurs, I guess, better than anything else, it really makes it so you can get your arms around a little bit better, which is fraud is not fraud, it, as you mentioned, comes in different categories.

Jim Marous (06:06):

So, Josh, since 2020, we've obviously seen significant changes in the economic environment with both rising funding costs as well as higher delinquency levels. Have these factors amplified the impact of fraud losses for financial institutions?

Josh Turnbull (06:24):

Yeah, no, thanks Jim. So, I think, I mean, you hit on it. And when times are good, fraud can be kind of just seen as a cost of doing business. But with the last few quarters years that we've been through where there are challenges in the credit environment, all of a sudden, fraud starts being something that you pay more attention to and trying to whittle on.

Josh Turnbull (06:44):

Craig, you've spent more time, I think, with the team recently looking at some of the incidents rates and things like that. So, do you have a couple points on that that you could share?

Craig LaChappelle (06:55):

Sure. I mean, just in the last four or five years, a 30% increase in synthetic identities, and this is the next one is maybe the most shocking to me, although they're all kind of shocking. 30% of all online apps are from bots, so high volume attacks by malicious entity, so to speak.

Craig LaChappelle (07:20):

And we've seen early default rates really spiking. Credit abuse just alone, credit abuse, again, that is real consumers knowingly misusing that account, estimated to account for 25% of all credit losses, and this has grown over 60% since 2019. I think those are some pretty good or scary high-level stats, Josh.

Josh Turnbull (07:47):

Yeah, no thanks.

Jim Marous (07:50):

So, both of you, rather than trying to categorize who's going to be the best for any of these questions, we've obviously seen fraud risk actually decreased during the pandemic, but it's totally surged afterward. What do you believe has driven this pattern other than the obvious, and what were fraudsters basically doing during this quieter period?

Josh Turnbull (08:15):

I mean, I think Jim, you hit on the trend. I think the reason that they're back are a couple things. One, the quiet period for us was not the quiet period elsewhere. So, you had money that was freely flowing, tending to stabilize a lot of folks during the course of the pandemic, and that was unfortunately, kind of easy hunting grounds for a lot of fraudsters.

Josh Turnbull (08:38):

And so, that was an easier place to make your living at the moment. That's dried up, they're back at the doorstep of financial services companies, so that's one of the factors. I think the other factor is just changes in technology that have made it easier, unfortunately, for fraudsters to do what they do.

Josh Turnbull (08:58):

Craig, you mentioned that stat on bots, that's not something that was around 10 years ago. We're certainly not as easily accessible for folks to have the combination of the vast amounts of stolen data and the technology to just ping application after application after application at financial services companies.

Craig LaChappelle (09:17):

And I was going to jump in, and I think you mentioned what's changed or why is it so starkly increasing, for lack of a better term — is well, what we saw, at least for consumer fraud during the pandemic, it was quite muted.

Craig LaChappelle (09:35):

Those fraudsters shifted to where the big dollars were that were easily available with unfortunately lower thresholds or lower risk thresholds, lower fraud bid against. And those were the government subsidy programs, whether it's PPP, unemployment compensation and relief payments, those had weaker controls.

Craig LaChappelle (09:57):

So, the fraudsters were hitting that and gaining access to those funds all the while, they were gaining access to data through breaches and other things, and they were warehousing that data, keeping it alive and available for future attacks. And that's what we're seeing now, we're essentially reaping the whirlwind because of that.

Jim Marous (10:25):

Well, it's interesting, your data shows that there's been a 37% increase in synthetic identities and 30% of online applications now come from bots, and you mentioned that earlier. What technologies or organizational shifts have enabled these dramatic increases, and more importantly, what are you seeing financial institutions do today to prevent these from actually impacting their organizations directly?

Craig LaChappelle (10:55):

Josh, you want to handle that one?

Josh Turnbull (10:57):

Yeah, it's, I guess a couple of things, Jim. One, it's alarming to me how often TransUnion will see over the course of a weekend or on a weeknight, an abnormally large number of applications hit a customer's website, and we are the ones to notify a customer, the customer hasn't seen that. So, just still some of the lack of monitoring tools that exist, fraudsters are very aware of that and are finding those vulnerabilities constantly.

Josh Turnbull (11:33):

I think the other thing that really challenges many operators in this space is that as anyone listening to this podcast knows who works in the fraud space, there is not a lack of really powerful fraud tools from a number of companies. And so, organizations over time have kind of layered on these defenses, one after another.

Josh Turnbull (11:52):

Unfortunately, what happens is they don't talk to each other. And so, I'm left as an organization with six different signals, and some are giving red lights, some are giving green lights, and I have to sort through that. That's kind of the environment in which many of the financial services companies today find themselves. And it's tough to have the right level of control if that's the environment that you have to operate in.

Jim Marous (12:18):

It's interesting, as we look at financial institutions today, the biggest challenge is changing your old ways and moving to the new ways. What is the biggest gap you are seeing within financial institutions as far as what I'm going to call the performance gap or the alignment gap with what's going on? Where are the biggest gaps of catching up to what's going on in the marketplace compared to what was done in the past?

Josh Turnbull (12:47):

I'll start with that one, and Craig, if you want to add on. I don't know if it's necessarily a gap today versus what's done in the past, but one of the things that's really tricky if you were a fraud executive or any kind of P&L owner at an institution, is to think about where Craig started out and the variety of types of fraud that we're seeing, and the fact that Craig, I forget the number you shared, but the percentage of charge offs that are happening due to fraud, people aren't always good at parsing those out.

Josh Turnbull (13:17):

And it's really tough. If you're not digging in and looking at every single instance of fraud and kind of a post-mortem analysis, do I even know and can I quantify the problem that I'm dealing with? And so, I think that's one, is just understanding the magnitude of the problem.

Josh Turnbull (13:36):

You have to do that in order to justify investment or change in the process, and so that's part of it. And then two is, culturally, in an organization making sure that that's something that people want to do and want to tackle and feel good about the outcome.

Craig LaChappelle (13:57):

There's a couple of things I could add. I'm trying to think about which one to hit first. Maybe I'll just do the last one you mentioned, culturally, are they willing to acknowledge. Sometimes, we see our customers like knowing there might be fraud, but since the account is performing okay and they're not a hundred percent sure, it takes them a while to act on it.

Craig LaChappelle (14:27):

So, it's like, do they have confidence to act? Do they have confidence to take a potentially performing account offline and report it, and that takes them doing? So, that's some of that data, some of it's cultural, and it's just having the confidence, I think, to act quickly.

Craig LaChappelle (14:47):

The other thing culturally on this is, and Josh kind of touched on it — there isn't a silver bullet. We've talked about this, I can't remember if this was the last time we were here or elsewhere. There isn't a silver bullet in this area, you do need to layer on different solutions and point solutions. You need that orchestration to really bring it together and integrate the signals.

Craig LaChappelle (15:10):

But ultimately, our belief is fraudsters get in because there's a gap or there's insufficient signal data. And you really think about what you need to know to stop fraud, you need to be able to verify who that person is, you need to be able to assess — but when I say that person, literally that identity from a PPI standpoint, and then be able to link that to and assess their behavior, are they risky?

Craig LaChappelle (15:45):

And then really, the third tier, the third leg I should say is device, and device is a lot of things. Is how risky is that device? What's the typical behavior on the device? Is that behavior signaling that somebody might be a fraudster giving how they're behaving, how they're entering information, are they cutting and pasting? Are they slowly redoing an email and checking … are they taking too long? Is it not natural?

Craig LaChappelle (16:19):

So, when you think about, who are you? What is your history and your behavior? What's your recent behavior? What's your behavior on your device traditionally on that device itself, and what's your behavior while doing the transaction? Those are all different types of insights that companies and lenders need to be able to bring together to be confident in making these fraud decisions.

Josh Turnbull (16:52):

And Jim, if I could, just an example of why the change can be hard. So, this is a regional bank within whom we were working fairly recently, they have a credit card program. They give a lot of credit cards to people that have deposit accounts with them, they also do a good amount of prospecting or open up cards to … people are welcome to apply for cards who don't have a retail deposit account with them.

Josh Turnbull (17:18):

They are taking a disproportionate share of fraud losses on cards that originate to people who've had a checking account for quite some time. They also have relaxed rules for opening up a credit card for an existing deposit account holder. So, they're stuck in this situation where they've talked to their peers on the deposit side, their peers on the deposit side, say, "We don't really have a fraud problem here."

Josh Turnbull (17:42):

Even in most cases, the fraud loss is not so big. So, we're not willing to make the investment, we're not willing to introduce all that friction to the application process for consumers coming in for a deposit account on the credit.

Josh Turnbull (17:57):

So, you wind up with these situations, unfortunately, in some of these, not even huge but decent sized institutions where just a lack of kind of collaboration and people coming together kind of across organizational divides on this common goal makes it really tricky to adapt systems and to make progress on this front.

Jim Marous (18:19):

No, it's interesting because you really get into a dynamic where you're trying to give credit to what you consider to be your best customers on the other side of the balance sheet but on the same time, and you want to make it as frictionless as possible, but you're opening up yourselves to a fraud situation. So, it's those dynamics between ease and safety that really creates a dynamic.

Jim Marous (18:45):

This is like playing whack-a-mole. I mean, it’s just … wherever you're not looking is where it's going to pop up, wherever it pops up, you solve it for a moment and something else happens. You've also talked about indirectly, the involvement of the consumer. What should financial institutions do to improve the education of their consumers to help them participate in the identification and prevention of fraud?

Craig LaChappelle (19:13):

That's a really good question. You want me to jump in, Josh?

Josh Turnbull (19:17):

Go for it.

Craig LaChappelle (19:20):

So, there's a lot of things that can be done. I mean, and a lot of institutions are doing this. It's things like, don't click odd links, go to our website, we'll never ask you for information via text, things of that nature. But one of the things that we see, some of the leading institutions (I don't want to say some, a lot of them are doing it now) are really getting into what I'll call advanced call technology.

Craig LaChappelle (19:50):

Whether it's branding their call with their name or logo to give confidence to the consumer that they can answer it, and maybe even what the call might be about — things like that, particularly, because we're dealing with a lot of spoof calls as well.

Craig LaChappelle (20:12):

So, if the institutions, financial institutions can get access to solutions that prevent the fraudsters from making their call look like it's coming from a particular institution, that I think helps consumers help themselves.

Jim Marous (20:35):

I mean, it's interesting because there's something new every day. You hear about it, you talk to a friend or something like that, that's been impacted by a fraud situation, and they're all new and inventive and innovative in their own way.

Jim Marous (20:50):

Speaking of innovation, obviously, AI has been in the fraud and risk area forever. I mean, more than any other part of the financial institution. What are you seeing as far as the advancement of AI that's going to be helping prevent fraud? I know it's helping create fraud, but how do we do it to prevent it?

Josh Turnbull (21:12):

Well, I guess let me start to address the question you didn't ask, but your last point about how it's advancing fraud. And Craig, to your point, on the call center, that's one where customers that we've been talking to are particularly concerned, and this isn't just about going to bots and things like that on hitting websites anymore, but the ability to generate voice conversations, those types of things.

Josh Turnbull (21:37):

Like it's very easy for me sitting now (relatively easy) thousands of miles away with compromised data to not just use that to do online applications, but to now, all of a sudden, use some of the voice generators and things that are available to hit up call centers and have involved conversations with agents trying to harvest data, do some of the things that Craig was talking about.

Josh Turnbull (22:01):

So, our customers are spending a lot of time thinking about some of those threats in addition to the applications of AI and fraud prevention technology.

Craig LaChappelle (22:13):

And look, AI is already being used in fraud prevention solutions, have been using AI, been early adopters, and particularly when assessing signals on behaviors in particular, identifying, "Oh, this one highly likely to be predictive of fraud or something's not right here."

Craig LaChappelle (22:37):

But also, a lot of folks and the vendors are taking a look at not only inbound calls, but other behaviors to try to sass out and identify what risky behaviors are, and then use that as a signal or an alert during an interaction.

Josh Turnbull (22:59):

And just a very simple example of some of the promise we're seeing just advances in different ways you look at data. So, historically, Craig would apply for an account, he would provide a phone number, and a lot of the fraud prevention tools that are out there would do something like look at that phone number and say, "Is this associated with Craig historically, yes or no? Okay, what's the velocity with which Craig has been applying for an account or this phone number's been applying for an account?” But that's kind of the linear ability of some traditional kind of data models and fraud prevention models to look at those data.

Josh Turnbull (23:36):

Now, things that we can do are look at that phone number that Craig provided in the application and look across kind of a broad set of data and understand, "Okay, well, how many other people is that phone number tied to? What other things do those people have in common? What's the velocity on those things?"

Josh Turnbull (23:51):

And so, all of a sudden, it's the ability to tie all these pieces of data together and Craig, to your point, come back with a much more meaningful signal than just kind of this, let me look at Craig and Craig's data in isolation, which is what some of the legacy models have done for a long time.

Craig LaChappelle (24:09):

And just give you a real, very specific point. A type of behavior is not risky at all until you couple it with the fact that that phone is new within the last couple of weeks. That tips it over, oh, that's a problem.

Jim Marous (24:26):

Well, speaking of that, how important is phone data, and what other data sources become more critical recently in the prevention of fraud? Because I know when I went to China at the very beginning of COVID, WeBank, the biggest digital bank in the world, basically builds their entire financial institution on phone data.

Jim Marous (24:48):

Now, there's different things you can use but they're giving credit justification based on how the phone's being used, is the person in the same place, the phone, all these other things. What other data has become more critical recently in the prevention of fraud?

Josh Turnbull (25:06):

I guess instead of rank ordering the value of the data, I think we've seen so many applications or so many examples, rather, Jim where you can have good data, more better data, but it's really about how you deploy it, and how you deploy it in the context of everything else, going back, Craig, to your point. So, phone data incredibly powerful.

Josh Turnbull (25:34):

Some of the signals that Craig mentioned, things about how I use it, but that in isolation, not as powerful as maybe coupling that with other things. So, at least for me, the way I think about it is, yes, powerful data, phone data is incredibly powerful, but it's how do you use that in context with everything else? And again, not just wind up with a series of 10 signals that I somehow have to make sense of, but bring that together in an intelligent rendering.

Craig LaChappelle (26:03):

And look, there are a lot of signals out there, almost more than sort of folks can handle without AI, so the application of AI is important. But some of the other things that we're seeing are I don't know … I can't speak to the details on this, but people are looking at social media behaviors.

Craig LaChappelle (26:29):

Being able to link to social media activity, how active are they on particular sites? What's the size of their, I'll call it network or whatever the right word is depending on your friend set. So, things of that nature are being used as well. I know definitely from an investigation standpoint, I can't speak to how that's being used sort of in model builds or real time analysis.

Jim Marous (27:06):

I think it's interesting because the whole game is trying to stay ahead of how good the fraudsters are doing their job, and I know that's a key element of what your organization does in working with finance institutions.

Jim Marous (27:21):

What do you see as you look forward, just a very small space of time because it's hard to look too far forward. What do you see as the most important elements that financial institutions really have to be looking at and taking care of as the landscape is evolving over the next 6 to 12 months?

Josh Turnbull (27:43):

I guess so, so two things that come to mind for me. One, making sure your people are working together and have aligned incentives, so that's one, has nothing to do with fraud necessarily, but just two, some of the nuances that we spoke to earlier in medium size or in complex organizations aligning folks around a common goal is one.

Josh Turnbull (28:05):

And then we don't have a crystal ball, we don't know what's happening, what the economy's going to look like six months from now, 12 months from now. But Craig, you touched on this with some of the credit abuse fraud.

Josh Turnbull (28:19):

We've already seen a big tick up there, that's something where as times get tougher, if they do, that kind of moral hazard creeps in, and you start to get a blurring of the lines more so than you do probably in really easy times in terms of what's fraud versus what someone who just wasn't able to fully handle their credit obligations.

Josh Turnbull (28:45):

And so, sharpening your tools so that you are able to per se, "Hey, here comes an applicant who historically seemed good, but there are signals here that this is someone that may not have the best intentions and we may wind up in a credit abuse situation."

Craig LaChappelle (29:05):

Another thing I would say is — and this is not new, but it's something that every institution needs to focus on, is like alright, overall, what's your tolerance for losses, credit or fraud? And has that overall losses hit that threshold, or you're looking for enhanced profitability — really makes sense to be able to identify which of those are frauds and what can be mitigated without putting too much friction in the system to hamper growth.

Craig LaChappelle (29:43):

It's a trite sort of phrase, but I can absolutely guarantee you zero fraud. You know how I do that? I don't create any accounts. So, you got to figure out where your threshold is or where your tipping point is.

Jim Marous (30:00):

Very interesting dynamic, Craig. Because I talk about it quite a bit on the road where I mention that one of the biggest challenges in the marketplace today is the trying to eliminate fraud as opposed to managed fraud. And you just hit upon it because I think we sometimes get so worried … not that we shouldn't be worried, I don't want to make it look like I'm the market and not thinking about the dynamics of risk.

Jim Marous (30:25):

But if you get to a risk intolerance phase, then you're really run up against a growth phase. And there's a balancing act there that says, “At what point am I optimizing the revenue against risk at a point where I have some risk tolerance because the benefits on the other side are so much greater?”

Jim Marous (30:46):

It's again, looking at a WeBank, and in a degree looking at a Chime and saying whether or not it's going to work out or not, they're evaluating risk in a different way than many traditional financial institutions. What's the next phase of what can be done so that you can grow at the same time that you're assuming some elements of risk.

Jim Marous (31:08):

I mean, I'm going to put this out to both of you as our final question. If I was to put you into a traditional financial institution (now that can be framed any way you want), but let's say an organization that's more or less typical, what would you do first from the standpoint of risk management? I'm not going to say risk avoidance, but just risk management. Josh?

Josh Turnbull (31:31):

I think my first move, Jim, would really be to understand, again, organizationally, how do we address this? Who's incented with what? Are objectives aligned?

Josh Turnbull (31:45):

A decent sized credit card issuer, retail bank that has a large credit card portfolio that we were talking with recently, that there's a person who owns the P&L and she basically said, "Look, fraud is not a goal of mine — other than the P&L, but the fraud responsibility falls well outside of my remit. That said, I'm not interested in growing until we can tackle this fraud problem over here because I know that it hits my P&L. So, I'm going to take some of my budget, help my colleague in fraud, make some investment, make some change.”

Josh Turnbull (32:22):

That's the kind of behavior that I think I would look for in alignment of incentives or at least cooperation within an organization versus other organizations that Craig, you and I see every day where they don't have that luxury, and you have people with very different agendas.

Josh Turnbull (32:37):

So, it's maybe an unsatisfying answer in terms of systems or processes or tools, but really the first place I would look if that were my role all of a sudden, would be to see how are we tackling this, and are people kind of all rowing in the same direction or not?

Jim Marous (32:54):

That's a great case study.

Craig LaChappelle (32:57):

I'll say this, Josh is more strategic than I am, I think a little more tactically. Easiest way to stop fraud I think is to prevent them from getting in. So, at a minimum in my marketing programs, I would filter out synthetics, spend money to prevent synthetics. And then I would say from an account takeover standpoint, that's a big one.

Craig LaChappelle (33:29):

And both from origination and account management perspective, I would be checking device IDs in addition to the human element that I talked about, device ID and behaviors all day long, all day long. And then I would get into some of those call technologies as well that help the consumers help themselves, help them avoid giving up data that gives them the keys to accounts at your institution.

Jim Marous (34:01):

It interesting, we take for granted some of the things that obviously you both, and some cases myself, look and say, "Geez, I'm not going to click that on no matter what it looks like." Or you look at email IDs and you go, "This doesn't even have anything to do with who sent me something." And you go, "This is just written all over it. If I don't take advantage of something, I'm better off not taking advantage of it than making mistake taking advantage of it."

Jim Marous (34:29):

And the dynamics continually evolve. There's just a ton of money being put into the whole risk and fraud prevention area. It's a matter of saying, “The technology is there for both sides of the game. How can I get smarter with the technologies as opposed to …” or maybe it's that saying about the bear in the woods, I don't have to outrun the bear, I just have to outrun the person that's running also with me.

Craig LaChappelle (34:58):

I wonder what bear in the woods story you were going with.

Jim Marous (35:03):

Good point, yes. But it is one of these dynamics that it's an ongoing challenge, it impacts as Josh mentioned, all points to the financial institution, the people that are product managers that are being asked to generate more accounts than they possibly can based on the risk tolerance of the financial institution and those parts of the organization that are in charge of risk management, they're saying, "I'm strangling the growth of this organization because of our parameters and risk."

Jim Marous (35:32):

And so, as you said, it's having the organization figure out what their North Star is, what they're trying to achieve, how you can make these ends work together, and I think the key element you brought up, both of you brought up today is looking at new data sources that provide insights because you're able to tap into things that you weren't able to tap into before.

Jim Marous (35:54):

The beauty of digital is also the bane of digital in that you have access to better data that helps and hurts. It doesn't matter which side of the equation on, there's elements to that. I always enjoy getting together with both of you because you're used to this, you're used to working with each other, dialogue is great.

Jim Marous (36:14):

I'll stop putting names to my questions because I'm going to always guess wrong because you guys overlap so much, but you also have interesting, unique perspectives on the way you look at the business.

Jim Marous (36:25):

It's been a great conversation, and obviously, you shared a lot of insights that are important for my audience. I know you both are also hosts of the TransUnion Extra Credit Podcast. Can you tell me a little bit more and our audience, a little bit more about what that is and where people can listen?

Craig LaChappelle (36:43):

Sure. Josh, you want me to run with that one?

Josh Turnbull (36:45):

Go for it.

Craig LaChappelle (36:46):

So, Jim, initially we … gosh, I don't remember three, four years ago, Josh and I realized that we were spending time with our sales teams advising and consulting with our customers, but there's only a few of us. So, we were a bit of a bottleneck. We thought, "Hey, we get more scale and sort of advanced conversations more if we use a different form." So, that's where we came up with the podcast.

Craig LaChappelle (37:11):

Initially, targeted to card and banking perspectives and, but we've since broadened it to address issues that extend beyond that to other sorts of lenders, consumer lending auto, you get the point. So, we continue to do that, we continue to get great engagement. If folks are interested, you just need to search for Extra Credit, TransUnion, wherever you get your podcasts and it'll pop up.

Craig LaChappelle (37:42):

We are particularly excited in the next month or so, we're going to do a couple of recordings at our financial services summit and we're going to have a leading macroeconomist on our podcast, which we're excited about, particularly in this environment, how do we navigate the chaos?

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Jim Marous (38:06):

Thank you both again for being on the show, I really appreciate your insights. And the good news is even when we're talking about fraud there's light at the end of the tunnel for those that go toward that light, it's just a matter of staying intelligent about it.

Jim Marous (38:23):

But also, my son says this often about so many different things, he goes, "It's not an on and off switch, it's a dimmer” and we've got to find that perfect element of light to go towards and make sure that we don't shut off the light because then growth shuts off, and we don't open up the doors and take in everybody, it's a-

Craig LaChappelle (38:45):

I'm going to steal that analogy.

Jim Marous (38:46):

Boy, yeah, it's kind of interesting. So, thank you again, both of you.

Josh Turnbull (38:50):

Thank you, Jim.

Craig LaChappelle (38:51):

Thank you.

Jim Marous (38:54):

Thanks for listening to Banking Transformed, the winner of three international awards for podcast excellence. If you enjoyed today's interview, please take some time to give our show a five-star rating. Also, be sure to catch my recent articles in The Financial Brand, and check out our recent research we're doing for the Digital Banking Report.

Jim Marous (39:12):

This has been a production of Evergreen Podcasts. A special thank you to our producer, Collins Blakely; audio engineer Chris Fafalios, and video producer, Will Pritts.

Jim Marous (39:21):

Until next time, remember: now more than ever, financial institutions must understand the risk and opportunities in the marketplace and take immediate action to meet market needs.

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