The number of payment transactions has been steadily rising. Customers trust their money with the Financial Institutions and a major fraud case affecting a large number of customers or receiving widespread publicity could seriously hurt this fragile relationship.
There are many bad actors (policy holders) who try to take advantage and fraudulently post claims. These fraudulent activities can hurt the profitability of that certain product and can raise the cost, ultimately leading to an increase in the insurance premium. Therefore, insurance companies should be able to protect themselves against these unwanted activities.
Loans either secured or unsecured are considered as a high-risk product in terms of credit and fraud risk perspective. Fraud against an issued loan means a direct financial loss to the Financial Institute but there are additional costs and reputational risk that must be considered as well.