From our daily conversations with banks and credit unions,we know that institutions are yearning for a different approach to fraudmanagement. They're tired of trying to execute countless point-in-time tacticsvia a myriad of solutions. They want something comprehensive andtransformative, that’s both agile and scalable.
That may sound daunting, but the technologies are improvingand the mindsets are shifting. The key is to have a guide to help yourinstitution along the way.
Our recent e-book: "Fraud Intelligence: Build Trust.Not Friction" lays out a step-by-step roadmap to follow.
One of the key steps is to elevate fraud prevention to an institutionwiide strategy.
Historically, fraud has been managed at the line-of-business(LOB) level at banks and credit unions, with each team buying its own tools andhandling its own alerts. But this fragmented model no longer works. Frauddoesn’t respect org charts. It moves across payment rails, channels, andcustomer segments, often in quick succession
Likely every institution has some version of a story inwhich a fraud attempt was flagged in multiple channels but couldn’t be stoppedin time because those channels weren’t communicating with each other.
Siloed fraud prevention results in:
And the business impact goes well beyond the dollars stolen. One industry estimate puts the total cost at $5.75 for every $1 stolen once you account for investigation, recovery, servicing, and downstream effects. That’s why fraud strategy can’t just be “owned” only where the loss posts. The ripple effects hit operations, reputation, and growth.
“Make fraud a institution-wide strategy” can turn into anempty slogan unless you're prepared to take these three steps:
1) Ensure there is one clear point of accountability
When you’re implementing a fraud strategy, it helps to have“one head cook in the kitchen," a single owner of results from start tofinish. You may want to consider assigning a C-level executive to this, a"Chief Fraud Officer," if you will. If you're not ready for thatlevel of consolidation, then conisder a small working group of LOB leaders,with a mandate to implement a policy across the institution and the power tomake it happen.
With a fraud leader/leadership group setting priorities andresolving conflicts across lines of business, you avoid having fraud programscompeting with each other for attention, budget, or authority.
2) Unify fraud policies across departments and channels
Like a symphony, fraud prevention works best when all partsof the organization respond in sync, Treat fraud as a shared institutional riskinstead of a collection of separate departmental issues. Developing a unifiedpolicy takes "institution-wide" from theoretical to reality: shareddefinitions of fraudulent activity; standardized response protocols topotential threats; shared objectives aligned with leadership priorities; andintegrated training so every team speaks the same fraud prevention language.
When policies are unified, an alert in one channel cantrigger coordinated action across others, closing the gaps and limiting therisk.
3) Consolidate tools and data under a single platform
Disconnected tools mean disconnected data, which prevents atruly accurate risk picture. In a recent Datos Insights study, when fraudprevention leaders were asked to identify their biggest pain point, nearly allof them (94.7%) selected “Critical customer data stuck indisconnected systems.”
It's not surprise then, that in the same study, 63% saidthey struggle with visibility across channels, while 58$ cited poororchestration between their fraud tools and controls. These findingspoint to the dire need need for a centralized hub that compiles signals,applies analytics and pushes decisions back out to to the solutions and systemswhere action is taken.
This centralized approach reduces duplication, acceleratesdecision-making, and positions the institution to adapt quickly to newthreats. Having this in place opens all sorts of new possibilities, likeCommercial and Consumer teams leveraging one orchestration system, or SmallBusiness and Commercial using the same Positive Pay solution.
Click here to learn more about Fraud Intelligence. It's an identity-centric, real-time approach that harnesses advanced technologies to customize security measures dynamically for each account holder. Fraud Intelligence doesn't just stop losses. It builds trust, unlocks growth, and positions your institution to outpace fraudsters, not chase.