How Smaller Lenders Can Build Their Fraud Teams [VIDEO]

Small sized lenders may not have as many resources as bigger corporations to devote to a designated fraud department, but there are areas in which these lenders can maximize their fraud prevention.

Zahid Kassem, senior vice president of fraud & dealer management at Santander Consumer USA, gave a presentation on fraud to attendees at the Auto Finance Performance and Compliance Summit. While the company is no longer a smaller player in the space, he detailed the distinct methods lenders with smaller budgets can pursue to build their fraud teams.

“As a small lender, your resources are tapped and you can only do so much,” Kassem said. “If I was a small lender, I would focus on the prevention of fraud because you need to utilize your front end teams to identify that bad behavior upfront rather than spending time on an investigation.”

While the investigation can result in faster feedback, it’s especially important to educate underwriters and the originations team so that they can better understand the information they are seeing.

“Then I would say spend the money on analytics,” Kassem added. “Having fraud strategists on your team that can really dive into the data and build strategies that you can employ very quickly.”

Overall, for all lenders, Kassem advised devoting 40% of resources on preventing fraud and another 40% on detecting fraud. The final 20% should be focused on the investigation.

To listen to Kassem detail Santander’s approach to fraud and cases of impound fraud that it discovered in Florida, check out the video below.