How Financial Institutions Can Prevent Costly Phone Scams and Improve the Call Experience for Customers

An interview with Henry Hayter, Senior Director of Product Management at TransUnion®

Extensive research confirms that phone calls continue to play a central role as an indispensable communication channel for financial institutions. According to data derived from October 2022 Forrester Consulting  research commissioned by Neustar, a TransUnion company, which was cited in The State of Customer Outreach: Top Ten Findings for Finance, an astonishing 90% of financial firms regard the phone as the primary and most frequently employed method of connecting with customers.

Unfortunately, this valuable communication channel has some hurdles to overcome. Robocalls and phone scams have created a lack of trust, leading to low answer rates. And new analytics tools that service providers are using to help protect consumers are having the unintended consequence of preventing some legitimate business calls from getting through.

Below is an interview with Senior Director of Product Management at TransUnion, Henry Hayter, about what consumers want from a calling experience and how banks can protect their customers from phone scams. Additionally, we explore steps you can take to help guarantee the delivery of an exceptional customer experience over the phone, fostering strong relationships and improving communications.

What are the biggest challenges when it comes to reaching customers through phone calls?

While customer service representatives in financial institutions are well-trained and provide excellent service, the challenge lies in getting customers to answer. People often hesitate to answer calls from unknown numbers due to the annoyance of robocalls or concerns about fraud and the possibility of being scammed. These factors really hinder the effectiveness of the voice channel as a means of communication.

How important is the voice channel for banks and other enterprises?

Neustar, a TransUnion company, recently commissioned a survey through Forrester Consulting, which included 455 business and technology decision-makers with experience in the outbound contact domain. It revealed that 90% of respondents consider voice the most important outbound channel. However, 70% of them identified customers’ ‘failure to answer calls’ as one of their top challenges.

Why won’t people answer their phones?

Unfortunately, there are a lot of reasons. According to the survey, 58% of respondents said customers will not answer calls from unknown phone numbers. Around 50% said customers are not answering calls due to fraud concerns. Additionally, nearly 45% cited the volume of robocalls and telemarketing calls as a reason customers are not answering, and 41% cited customer concerns with fraudsters spoofing legitimate companies with whom they’ve done business.

What common issues do banks face in managing the voice channel for customer interactions?

They can be divided into two problem statements. The first problem has to do with call spoofing. This is where a bad actor hijacks a bank's phone number and poses as an employee to deceive customers and steal their money. In 2022, 70 million Americans lost nearly $40 million to phone scams like this.

The second problem is that nearly a quarter of all legitimate outbound calls are being mislabeled as spam. Based on internal research, call mislabeling results in a significant percentage (88%) of legitimate calls going unanswered and can prevent a bank from reaching its customers to discuss important issues.

The challenge is that we want all the fraudulent spoofed calls to get blocked, and we want all the legitimate calls to get through – but this doesn’t always happen.

How do phone scams impact banks and other financial institutions?

The most significant attacks we’ve seen recently are scammers pretending to work for a bank and tricking customers into revealing personal information over the phone or authorizing fraudulent transactions.  For example, you’ve probably read about Zelle® fraud in the news recently. Zelle is a digital payment platform for transferring funds from one account to another.

Zelle fraud is more targeted than other phone scams, and it often begins with a spoofed call, where a fraudster poses as a bank representative. The scammer then convinces the victim to reveal their personal information or security details so they can log into their account and help correct a banking ‘error’ – which doesn’t actually exist. The fraudster may then initiate an unauthorized wire transfer or convince their victim to transfer money themselves into the scammer’s account under the guise of fixing the error. These scams often employ complex social engineering schemes, making them highly convincing and harder to detect.

Download the eBook: Financial Service Firms: Reduce Account Takeover by Signing Your Own Calls.

What solutions does TransUnion offer to address these challenges?

TruContact Trusted Call Solutions help enterprises optimize outbound call operations, increase contact rates, improve the customer experience, and protect their brand reputation. Several of our solutions are described below:

• Caller Name Optimization ensures the name of the calling institution appears consistently on outbound calls, providing consumers with the information they need to help them decide if they want to answer. In addition, this protects a company’s phone numbers from being mistakenly blocked or mislabeled by service providers’ analytics systems.
• Caller ID Authentication deploys technology to authenticate outbound calls coming from the financial institution's telephony environment. Instead of the telecom provider guessing if the call is legitimate, the bank can provide its own verification. Any call that doesn’t have this verification will be identified as a spoofed call, which the service provider will then stop before it ever reaches the consumer.
• Spoofed Call Protection verifies the call was originated by the enterprise and enables calls to be blocked before reaching and unsuspecting consumer - preventing fraudsters from spoofing enterprise telephone numbers. 
• Branded Call Display authenticates the call and enables a name, logo, or other branding to appear on the mobile display. When a customer receives a call, they see the essential information: it verifies the call, confirms it is from the bank, and indicates the reason for the call – such as an appointment or payment reminder.

Read: Building Two-Way Trust for Financial Services with TruContact Branded Call Display

Can you share any statistical data on the tangible impact that these solutions have had on financial institutions?

Here’s one example. A financial institution customer faced low answer rates during its collection efforts, which led to payment delays and elevated delinquencies. To address this, we conducted tests with the bank where they incorporated their brand using TruContact Branded Call Display as part of their outbound calling strategy. The results were impressive, with a 122% increase in right-party contact rates and a 135% increase in payment rates. Moreover, they delivered the calls in a high-value way, improving the customer experience and their business results.

Watch the American Banker webinar with Henry Hayter, Senior Director for Product at TransUnion, featuring guest speaker Max Ball, Principal Analyst at Forrester Research.