Lusaka, Zambia,

As Zambia Goes Digital, Businesses Must Improve Digital Onboarding Experience and Tackle Fraud

Driven by economic changes and an increasingly business-friendly environment, Zambia is readying itself for a digital boom – and businesses should be taking precautions now to mitigate the risks of fraud and ensure the most seamless experience possible for their rapidly digitising customer base, says TransUnion Africa.

With Zambia’s financial sector showing real signs of growth, with a steady inflow of investment and a growing number of fintech startups looking to disrupt the industry, more consumers than ever are looking for financial services products, says Samuel Tayengwa, Head of Product, Africa Regions for TransUnion. This poses the challenge to companies to reach, verify and onboard new customers at a time when issues like financial inclusion and expansion are more topical than ever.

“The move to digital has changed the way financial services institutions connect with their customers. It also offers new opportunities to acquire customers more easily and cheaply. To enable this, the ability to onboard customers remotely, and to reduce friction and costs at acquisition stage while maintaining security, is going to become critical for most entities,” said Tayengwa.

As the world moves online, the challenge of fraud looms large. According to TransUnion’s latest quarterly analysis of global online fraud trends, fraudsters continue to attempt scams against businesses and consumers. TransUnion’s quarterly fraud analysis found the rate of suspected fraudulent digital transactions against businesses worldwide decreased 14% between Q2 2021 and Q2 2022 but some industries were targeted more than others.

In Zambia, the rate of suspected digital fraud attempts declined marginally by 2% in the same period. For transactions originating from Zambia, the gambling industry saw the biggest growth in the rate of suspected digital fraud attempts with an increase 44% year-over-year. The industry with the second biggest increase was retail, which rose 17% during that same period.

That brings with it the challenge for Zambia’s businesses to protect themselves and their customers from fraud, while continuing to provide a seamless customer experience.

“As we accelerate the shift to transact online, fraud is shifting digitally as well. Zambia’s businesses must give their customers the smoothest possible onboarding experience on digital channels, but historically fraud detection and prevention solutions have negatively impacted that experience,” said Tayengwa.

According to analysis from research and advisory firm Forrester conducted on behalf of TransUnion*, more than half of financial services firms see their identity verification methods as burdensome on good customers. Forrester found this leads to customers abandoning new financial product applications before completion.

To help solve this problem, TransUnion in Zambia has launched Digital Onboarding, a new solution to help the financial services industry provide consumers with a simpler digital application and onboarding experience.

Digital Onboarding helps businesses offer greater digital access to products and services, while addressing an increase in attempted fraud that can come with a rise in digital transactions. It delivers a friction-right experience that includes combining digital and physical identity establishment and verification, while increasing conversions and loyalty, reducing fraud, and improving operational efficiencies. The service is delivered via a single API that significantly reduces integration time and effort for financial institutions.

“Until now, the focus across industries has been on identifying more of the good transactions and customers to allow them to pass with less friction,” said Tayengwa. “Strong fraud and authentication practices decrease false positives and focus fraud-fighting resources on the minority of interactions that warrant scrutiny. By reducing the pool of manual reviews and customer interrogations, organizations can dramatically reduce costs, increase revenue, and improve the overall customer experience.”

For worldwide and regional breakdowns around how much the suspected digital fraud attempt rate recently changed, what types of fraud are most prevalent in certain industries and more, please download the infographic.

* TransUnion commissioned Forrester to complete a number of research studies August/September 2018 including a look at “Fraud Detection and ID Verification in Financial Services