PointPredictive
Fighting Fraud with Machine Learning and AI

Auto lending delinquency rates and losses are climbing dramatically. Many lenders realize they need to place fraud and misrepresentation detection solutions at the very front of their lending decision flow to stop fraud and misrepresentation on applications before funding and curb these losses. San Diego, CA-based PointPredictive estimates auto lenders are losing between $4 billion and $6 billion per year to fraud and material misrepresentation in the application process. The company offers a comprehensive suite of AI-enabled solutions focused on fraud prevention not only in automotive lending but also in consumer and mortgage lending. “Our goal is to partner with lenders and leverage our artificial intelligence (AI)- based risk management solutions to help them avoid significant losses due to fraud and misrepresentation in the application process,” asserts Tim Grace, CEO, PointPredictive.

PointPredictive’s fraud scoring solution uses innovative AI/machine learning models to provide low false positive rates and help lenders identify all types of fraud or misrepresented information provided on a loan application. This allows them to prevent huge losses due to early payment defaults that result from these applications.

A smart underwriting decision requires complete, accurate information to be provided on the loan application. By using a PointPredictive AI-based solution, lenders can benotified of any potential misrepresentations along with real-time action steps indicating the specific data needed to validate the suspicious information. Across automotive lending, mortgage lending and online retail transactions, PointPredictive’s dedicated fraud experts work closely with lenders to ensure the solution implementation is optimized to produce a clear and compelling bottom line return on investment that usually exceeds $10 saved for every $1 spent.

A Consortium to Prevent Fraud

With lending fraud schemes constantly-evolving, the best approach to prevent and control financial fraud is through industry-wide collaboration. PointPredictive helps lenders be proactive against fraud to aggregate their fraud knowledge, identify new fraud patterns more quickly, and collaborate to reduce fraud losses throughout the lending lifecycle. “We refer to this methodology as a collaborative fraud consortium approach–where a pooled set of data fuels predictive analytic models allowing all contributors to benefit from the experiences of their fellow lenders to precisely identify risk and reduce fraud losses,” says Grace.

We make our decades of fraud prevention experience available to our customers through predictive analytics combined with end-to-end consultation— helping them re-invent their business decision-making capabilities

Unlike “bad actor” databases, the pooling of insightful lender-shared data enables the creation of sophisticated machine learning algorithms to detect patterns of fraud behavior that are causing losses across the industry. This approach offers the highest detection of fraud and misrepresentation losses with the lowest customer impact.

In many cases, lenders optimize their loan approval process by using PointPredictive scores to complement their internal scorecards or as an overlay to other tools to reduce high false positive rates. In many cases, this results in streamlining or enhancing the customer experience for their customers. “We make our decades of fraud prevention experience available to our customers through end-to-end consultation—helping them re-invent their business decision-making capabilities with the sophistication and accuracy of these new predictive AI solutions,” says Grace. The firm provides personalized services to customers by listening to their business objectives and assisting them in embedding its fraud prevention tools to detect the highest possible fraud at each point along the expense curve.

According to Grace, 2018 is going to be a year of dramatic expansion in automotive fraud management, mortgage, servicing/capital markets, and online retail for the firm as it plans to more than double its employee base. “The depth of our expertise is unrivaled; being small, nimble, and dedicated allows us to be extremely responsive to our customers’ needs.”