Mobile phone giant 02 has slashed disconnection levels on post-pay contracts by over 40 per cent after introducing an online identity verification system into its 350 UK stores and those of major retail partners including The Link.
The company opted to bring online identity checking in-store after recognising that its traditional identity checking system - which put the onus on staff to confirm the authenticity of driving licences, utility bills and credit and debit cards - was not secure enough. 02 also wanted a faster and friendlier approach to signing up new customers.
The new system, which takes staff a matter of seconds to confirm the identity of consumers, is helping 02 to process 20,000 new customer accounts every week as well as combat fraud.
Neil Harvey, 02's Head of Credit and Risk, said: "Our old model was simply not sustainable. Any business today that deals with consumers needs to know that its systems and processes will protect not just its customers, but its staff also. With increasingly sophisticated fraudsters at work we recognised that it was not just unfair but a high risk strategy to expect our staff to be able to intercept and expose fraud."
02 recognised from its online retail experience that if it could use cards as part of the authentication process, bad debt in the form of arrears and ultimately disconnection - much of it due to fraud - could be significantly reduced.
The company engaged Chester-based identity verification experts GB Group to look at how it could electronically replicate its existing customer verification processes across the full retail environment.
GB Group's market leading URU™ solution was the only service available that could also accept cards as part of the authentication check. 02 recognised that GB Group could replicate its online sign up process - traditionally a much more customer friendly one - and reduce fraud levels while doing so.
Neil Harvey added: "In some channels up to eight per cent of new customer accounts were showing early warning signs of falling into arrears - a clear indication of potential churn.
"We had seen, through analysis of online transactions via our 02 on-line shop, that we could substantially reduce the amomount of fraud by using technology and authenticating payment cards within the process.
"Given that every new account that goes "bad" costs us hundreds of pounds in terms of lost airtime, handset and overall contract value, the losses were significant."
GB Group helped to develop a bespoke solution for 02 to manage new accounts and verify customer details in an instantaneous and straight-through process.
Neil Harvey concluded: "GB and URU are now an integral part of our customer offering, helping us to process nearly 20,000 new customer accounts every week across all channels to provide consistency in our application processing regardless of where we interact with the customer.
"Since bringing URU into the customer application process we have seen disconnection levels fall by more than 40 per cent - which represents a major saving to the business."