How can digital verification help insurers fight fraud and foster customer trust?

Canadian insurance companies are facing one of their biggest challenges yet: mitigating rising fraud and compliance risk, while also providing a seamless, trusted digital customer experience as they modernize the way they collect, verify, and secure customer data. 

 Canadians lost almost $570 million to fraud last year, notes the Canadian Anti-Fraud Centre. Since only one in 10 (11%) of cases are reported to police, actual figures are likely much higher. 

 More Canadians than ever are concerned over the increasing levels of fraud, a recent Equifax Canada survey shows, with mortgage and identity fraud continuing to escalate amid economic pressures. Auto insurance fraud is especially rampant — costing Canadians well over $1 billion a year in added insurance premiums, according to the Insurance Bureau of Canada. Auto fraud rose 54% year over year, reports Equifax, largely due to identity theft and falsified credit applications. 

“As insurance fraud becomes more sophisticated and prevalent in Canada, the need for secure digital verification processes has never been more urgent,” explains JP Mercieca, Commercial Business Development Leader at Interac. 

Insurers handle vast amounts of data every day, but many companies still use outdated, inefficient manual methods for data collection and verification. “This leaves them vulnerable to cyber breaches and fraud”, Mercieca adds. “In this environment, it’s essential for insurers to adopt solutions that can securely verify customer data while streamlining operations.” 

This is where Interac Verified™ steps in to help the insurance industry protect against fraud, streamline processes, and enhance the customer experience through secure digital verification everyone can trust. 

 A secure solution 

The problem for the insurance industry today is multifaceted: companies need to modernize their data handling operations in order to keep up with new technologies, compete with insurtechs, and meet growing customer demands for seamless, convenient digital experiences. And they need to do this all in a secure, compliant way that fosters trust in their data collection and verification processes.  

 With fraud skyrocketing, compliance is a critical consideration. Regulatory requirements surrounding Know Your Client (KYC) procedures are becoming more rigorous, which may motivate insurers to modernize and secure their data verification. 

 “By automating identity verification, insurers can streamline KYC processes and it can help them meet compliance standards, and eliminate many of the errors that can happen with manual data submission,” explains Mercieca.  

 Interac’s direct integration with participating Canadian financial institutions allows insurers to tap into trusted verification processes, such as online banking logins or document scanning, ensuring sensitive information is securely collected and authenticated. 

This gives insurers peace of mind that the customer is who they say they are. It also gives customers peace of mind that they’re using a familiar and trusted process in an era where digital security and convenience are crucial. 

 Trust as a differentiator 

For insurers, combating fraud and fostering trust in their data verification process, while winning the digital customer experience race, will remain a balancing act that’s only becoming more complex. 

 With Interac Verified insurers can help fight fraud and offer fast, easy, compliant, and secure digital verification that enhances the overall customer experience.  

 Here’s how: 

• Enhanced fraud prevention: By leveraging trusted data sources, like bank-level authentication systems, Interac Verified enables insurers to confirm the identity of customers swiftly and securely. This significantly reduces fraud risk, especially in high-risk areas like claim disbursements and policyholder onboarding. “For example, insurers can verify account ownership before disbursing a claim,” says Mercieca. “This minimizes the risk of fraudulent claims and helps ensure funds go to the correct recipient.” 

• Stronger security protocols: Traditional methods, like emailing or faxing documents, are vulnerable to fraud and cyberbreaches. “Interac Verified employs advanced digital security measures that use biometric checks and bank-verified data, making it far more secure than manual verification approaches,” Mercieca explains. 

• Improved customer experience: Beyond security, digital verification also enhances convenience. Customers can complete the verification process from anywhere using their mobile devices. Whether scanning a driver’s licence or logging in through their banking app with their participating financial institution, these familiar processes make it easy for customers to verify their information securely, Mercieca explains. “Not only are these digital flows convenient, but the level of familiarity builds trust by ensuring customers are in control,” he says. 

• Compliance and competitive edge: Digital verification helps insurers meet compliance standards and gain a competitive edge in a market where insurtechs are rapidly transforming customer expectations. Offering a secure, customer-friendly experience that everyone can trust, can help insurers attract new customers and retain existing ones.  

 By prioritizing security, compliance, and customer convenience, Interac Verified is setting a new standard for trust in digital verification. A trust that, in this evolving digital landscape, will be a key differentiator for insurers who are ready to lead the way in fraud prevention and customer experience. 

 Take a deeper look at how insurance leaders can create digital transformation strategies that meet today’s challenges in Interac’s new report, and see what Interac Verified can do for your business. 

®, TM are owned by Interac Corp. Used under licence.