High-Risk Calls Soar to New Heights as Fraudsters Hit Financial Services Harder Than Ever Before
Last month, Next Caller began tracking the increase in volumes and high-risk calls to our Fortune 500 clients as a result COVID-19, marked by a dizzying array of consumer needs as well as fraudsters coming out in droves to exploit the chaos.
From “Week 1”–the period from March 16-23 that we deemed the start of COVID-19’s impact on contact centers–through Week 3 (March 30-April 5), we saw an explosion of activity across the board, including call volume spikes of 60% for some clients and high-risk calls increasing an average of 41% for clients in financial services. From telecom giants to Fortune 100 U.S. banks, the spikes were equally significant and worrisome. Not surprisingly this enterprise activity correlated with our findings that 1-in-3 Americans say that they think they’ve already been targeted by COVID-19 related fraud.
This report updates the trends we’ve tracked through Week 4 and 5 (April 6-19). Unfortunately, our early predictions in the last report were not far off the mark. By Week 4, as stimulus checks were poised to hit consumer bank accounts and PPP decisions were looming, a second wave of call volumes rocked contact centers and high-risk calls went nuclear.
WEEKS 4 & 5: A FLATTENING OF THE CALLING CURVE FOLLOWED BY A PARABOLIC SPIKE
Following Week 3’s worrisome spike, call volumes across our clients during Week 4 (April 6-12) retreated, a likely sign that customers’ urgent needs regarding travel, finances, and supply stockpiling began to slow. Similarly, high-risk calls dropped down towards Week 2 levels, perhaps an indication that fraudsters were finding slightly less chaos to exploit. But unfortunately, this temporary waning seems to have been a calm before the storm. In Week 5 (April 13-19) call volume across our entire client base spiked 40% above previous highs.
For one Fortune 100 banking client, the difference in call volume between the lull in Week 4 and the surge in Week 5 translated into an average of over 6,000 more calls every hour for the entire week. Another client endured a meteoric 125% rise in call traffic during Week 5 alone, nearly 3 times higher than any previous spike. This alarming trend was shared by most financial services clients, where the segment’s total call traffic topped previous highs by 800%.
The rush to the phones may be largely due to numerous online and mobile app outages for many major financial institutions and government agencies at a time when over 80 million Americans were simultaneously attempting to track the status of their CARES Act deposits.
FRAUDSTERS HIT FINANCIAL SERVICES IN RECORD NUMBERS AS STIMULUS UPDATES CAUSE CHAOS
Following the trend of other industries, Week 4 high-risk call volumes in the financial services sector dipped to their lowest level to date. In Week 5, they returned with a vengeance. High-risk call traffic rose across all clients to 35% above Pre-COVID levels, the highest mark to date and nearly 25% above the previous peak. At the end of Week 5, High-risk calls to financial services surged to 50% above Pre-COVID levels.
High-Risk Call Rate (In Comparison to Pre-COVID-19 Levels
A NEW NORMAL OR JUST ANOTHER WAVE?
As noted in our previous report, we expected the unveiling of the government’s stimulus package to unleash a flurry activity from consumers and small businesses anxious to inquire about stimulus checks and the status of PPP applications, respectively. But perhaps no one could have predicted the magnitude. Inefficiencies and confusion surrounding missing checks for individuals and the instantly depleted PPP fund are in part to blame for exacerbating the situation, as were the wide-scale outages. But, we can not overlook the spirited return of fraudsters riding the coattails. One Fortune 100 bank suffered a high-risk call increase of 60% during Week 5. Practically speaking, that amounts to nearly 400 additional high-risk calls to navigate every hour for the entire week.
Call traffic fluctuations seem to follow in the shadow of new COVID-related information and the ensuing confusion, neither of which seem to be in short supply. And while we can partially anticipate call volatility from week to week (as relief programs come and go, for example), another more unreliable agent threatens every contact center’s ability to cope with sudden influxes in traffic; fear.
As a prime example, last week real estate mogul and investor Barbara Corcoran appeared on the Elvis Duran show, one of the country’s most popular radio programs, and told listeners to call their banks and credit card providers to renegotiate their credit card terms — no matter how long they have to wait on hold. Unfortunately, many listeners are in desperate need of financial assistance and with millions out of work, newfound time to spare (jobless claims exceed 20 million in four weeks). And so while Cocoran’s advice was well-intentioned, it no doubt struck fear in the hearts of anyone operating a credit-related contact center. Suffice it to say, as consumers and businesses remain hyper-focused on surviving the crisis, there will continue to be flash-circumstances to challenge the bandwidth and security of contact centers.
WHAT HAPPENS WHEN CUSTOMER SERVICE GOES FROM THE CONTACT CENTER TO THE COUCH?
It’s not just the calling patterns that impact contact centers. In many cases, the entire operating model has been turned upside-down. Next Caller clients across a variety of industries including banking and cable/internet providers have indicated that their entire agent-base has been forced to go remote. While perhaps not surprising, many consumers may not have anticipated that social distancing would apply to contact center agents, too. Rapid contact center virtualization presents a few immediate and daunting logistical challenges. For example, the minimum physical 6-foot distance required between individuals rendered many contact center layouts inoperable without significant restructuring. Meanwhile, shelter-in-place orders left little time for IT departments to prepare for things like establishing remote access to programs and systems and even less time for business leaders to develop new training plans, or distribute comprehensive policies and procedures to govern the novel working circumstances. Agents accustomed to managing dozens of applications across multiple screens were instantly quarantined to a laptop exploding with frustrated callers and clever criminals. And just how quickly could agents be equipped to maintain internet and audio quality standards?
WHAT’S IN STORE?
At times, the pandemic has revealed a stunning lack of preparedness in the contact center. But more often, a seamless (and almost overnight) transition to the new normal was a nearly impossible expectation given the complexity of the circumstances. And while there is no reliable barometer to confirm consumer sentiment, the uncharted territory that has defined COVID-19’s first 5 weeks may have also brought with it some much-needed goodwill. In recent years, consumer expectations for service and convenience have continued to rise and businesses have worked hard to keep up with the demand. We can at least hope that COVID’s indiscriminate and ubiquitous assault across the board has resulted in a little extra patience from consumers to allow businesses to adapt. But, the question that should be on the mind of every business is–how long will the good faith last?
It is already clear that criminals may be a close second to the virus itself in their test to operational readiness. While there are enterprise-grade solutions that are well-suited to mitigate certain aspects, not all challenges are created equal. Contact center security remains particularly vulnerable because of its inherent weakness: humans. Working from home can present a learning curve for anyone, with new distractions and a blurring of work/home boundaries. But there is less room for error doing business over the phone. Under normal circumstances, agents are inclined to rush through security to avoid angering callers and damaging satisfaction scores. With stakes at an all-time high, unprepared or unsuspecting agents are a fraudster’s best friend. The wide array of new avenues for fraud, along with access to information from consumers who are also more likely to reveal sensitive information, we expect to see fraud success rates ratchet up almost incalculably for the under-prepared. Particularly for financial institutions, government agencies, healthcare insurers and providers, and retail brands that sit at the intersection of high-value goods and services tied to individual identity, fraud may not just come in waves–it may simply raise the sea-level.
Unfortunately, the light at the end of the tunnel is off in the distance. For businesses that offer SBA loans, we would expect continual waves in the short term as new rounds of SBA funds become available. Two Next Caller banking clients that offer SBA loans experienced an average increase of 300% in call traffic beginning with their initial announcement (Week 3 in the graph below). A similar bump should be anticipated upon the announcement of any subsequent rounds, with an even larger spike when the fund distribution begins.
For other financial institutions, stimulus checks will be a constant source of engagement for individuals, as will the long-tail economic fallout that’s likely to result from a variety of new circumstances. For example, as some states end shelter-in-place orders to re-open their economy, the influx of spending and a potentially new wave of illnesses could spike call traffic again. Or consider the eventual rise in defaults on consumer auto, home, and personal loans, all of which will require conversations. In short, any time to ‘come up for air’ that call centers may experience in the short term should be used to plan for the next wave. Businesses must continue to find adapt so that customer experience and security don’t suffer at the hands of criminals and COVID-19. Success in that endeavor requires being proactive and using data to drive decisions.