Fraud Prevention

Focusing on Consumer Fraud Operational Risk Challenges

September 2, 2015

As fraud continues to rise for issuers, it is important to emphasize a sound fraud management program that focuses on managing data breaches (if they occur) and promoting fraud prevention across all products and business areas. To do this while aligning with operational risk expectations, organizations need to make sure processes are provable, justified and documented.

In light of the growing number of data breaches, regulators may begin to examine operational risk controls in the fraud segment. To prepare for any potential scrutiny, we recommend focusing attention on three main areas:

  1. Policies procedures and execution of internal controls around customer data protection/fraud management.
  2. Solutions deployed to both prevent and detect fraud and the proper skillset of the resources managing them.
  3. Actions taken to protect the consumer while using the bank’s products.

Implementing a robust risk control framework with three lines of defense is the best way to effectively manage fraud operational risk. The first line of defense (business line control) should encompass risk assessment, prevention, detection and correction to bring the process full-circle. Planning and preparation are key when facing any regulatory scrutiny around fraud operation risk practices. For more information on this topic, a PDF version of the full white paper is available for download.


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Identity Theft and 5 Tips for Improvement

Five Tips to Prevent Identity Theft

Four Areas of Imminent Fraud and Disputes Volumes

Fraud Prevention