Magazine article American Banker

Are You Really There? U.S. Bank Tries Geolocation to Stop Fraud

Magazine article American Banker

Are You Really There? U.S. Bank Tries Geolocation to Stop Fraud

Article excerpt

Byline: Tanaya Macheel

As consumers get more comfortable letting companies know the location of their mobile phones, U.S. Bank sees this as a good way to fine-tune its fraud management.

This month the bank rolled out its Geolocation Service. Developed by Visa, it is an opt-in offering integrated into U.S. Bank's mobile apps that matches the credit card's location to that of the customer's phone. The aim is to do more to ensure transactions on customers' cards are approved when they're out of town, minimize disruption and reduce the risk of fraud.

A smartphone's "location is pretty mainstream in terms of being able to utilize it. The question is what you do with it," said Dominic Venturo, U.S. Bank's chief innovation officer.

U.S. Bank's earlier work in geolocation has been around customer service, such as providing ATM and branch locations or hours of operation. But that is just a sliver of what other sectors do. Retailers uses mobile and geolocation for marketing schemes, like automated check-in or to remind customers if they have a loyalty card they can use, for instance.

"Financial institutions may be well behind the curve as an industry," Venturo said. "We started with credit where credit and mobile intersect. We had an interesting problem to solve, it's a common occurrence," he said of transactions declining when customers leave town.

Customers with U.S. Bank FlexPerks Visa credit cards can opt-in through the FlexPerks mobile app. It's also available through the Elan partner financial institutions through the Elan mobile app and will be made available via the U.S. Bank mobile app at a later date.

There are other ways to harness location technology in financial services. For example, Citigroup is testing Bluetooth beacons in a pilot that gives customers cardless access to branch ATMs after business hours; Wells Fargo is testing location-based services to identify people as they walk into branches, greet them personally and offer them quick help; and Capital One is experimenting with sending people offers from local merchants as they walk or drive by their shops. …

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