Tune Your Banking Fraud Center of Excellence for Efficiency and Customer Assurance

How to minimize your risk and losses given the constant rise in fraud. Fine-tune five actions in fraud operations help to protect you and your customers.

Consumers and Lenders are Reeling from Banking Fraud’s Insidious and Staggering Growth

The year over year trajectory of fraud continues to bring risk to even the most prepared financial institutions. In 2021, there were over 4.2M total cases of fraud reported in the US; and 360K cases reported in the UK.

Fraud will always be a major pain-point.  Stopping fraud is not a destination, it is (and always will be) a journey.  The rapid increase in reported cases over the last five years leads us to believe that the record-setting trend of reported cases will continue.

Criminals will always look to exploit consumer and financial institution vulnerabilities. So, you must remain current with evolving technology and be savvy to the unlimited creative license taken by fraudsters.

Although it is impossible to stop fraud, you can ensure that your banking fraud center of excellence (COE) is well prepared to handle reported cases efficiently. Proper preparation can minimize losses and provide the best experience to your customers as they cope with the stress and overall inconvenience of being fraud victims.  Looking across the industry, we’ve identified five key actions that financial institutions can take in their banking fraud center of excellence. These actions work in sum or in parts to help minimize losses from fraud.

Five Areas to Fine-Tune Fraud Operations for Efficiency and Customer Assurance

Educate your customers

Noticing a fraud trend? Are you seeing emerging threats in your business as reported in the industry?  If the answer is “yes,” consistently educate your customer by sending an email or text reminder highlighting key activities or suspicious actions to watch.  Advise customers that you’ll never contact them from suspicious numbers or make requests for sensitive information via email or text.

Providing transparency in your contact practices helps customers identify instances of phishing, smishing, vishing and so on. Additionally, track behavioral trends in customer activities (e.g., an increase in peer-to-peer (P2P) transactions through options like Zelle or Venmo or adding multiple new payees). Providing this insight opens the door to targeted education on spotting scams related to their recent activity. Consider using content from the UK’s Take Five campaign for customer tips to catch identity fraud attempts.

Implement automated prompts before allowing customers to send funds

“75% of consumers expect businesses to take the necessary security steps to protect them online.” (Experian, 2022) A simple message of “Are you sending funds to someone you know?” or “Are you happy sending funds to this person?” can be the difference between a successful identity theft attempt and stopping a fraudster in their tracks.

We recommend using automated prompts to confirm transactions before processing. This serves as a preventative measure for identity fraud and meets customer expectations that you’ll help them stay alert to scams. Also, two-way verification often obtains a quick response from your customer. (e.g., “We’ve detected suspicious activity on your account. Please confirm if the transaction for $X.XX was you by replying YES or NO to this message”.) You can then block the account or put a hold on the funds depending on the response.

Ensure availability of live agents

Live agents serve as the first opportunity to set a customer’s mind at ease. Being the victim of fraud is an emotionally traumatizing experience. The uncertainty of having financial details exploited, accounts taken over or falling victim to a scam can leave an individual feeling angry, violated and vulnerable.  Then, the inability to reach a live agent due to a labyrinth of automated messages drastically compounds emotions.  Live agents should be easily reached and offered as a point of contact. By giving this option and having agents readily available, your customers know that their situation matters and you’re making an effort to reconcile the issue.

Develop a triage system for case handling (Low, Medium, High Risk)

Are you considering agent skill level and fraud risk levels when assigning fraud cases?  If the answer is “no,” you may have a process inefficiency. For an efficiency boost, triage activities that assign lower risk cases to new staff and higher risk cases to experienced agents. This way, more complex fraud cases are handled by staff with a proven ability to properly meet the demands of such investigations.

Allow access to shared systems to save time

Are your fraud specialists able to see documentation made by your disputes team and vice versa? Or must agents request potential case information?  This may be another opportunity to improve handling efficiency.  Make your fraud specialists more efficient by providing them with information from internal systems, allowing them access to external fraud tools and highlight areas of risk. This minimizes case handling times by reducing the need to engage teams outside of fraud.

Take the Next Step to Bolster your Fraud Operations

From assessments to implementing new processes and tools to better manage workflow, Bridgeforce can provide the assistance needed to bolster your operations within your banking fraud center of excellence.  We have helped clients identify bottlenecks and redundancies. We’ve also uncovered opportunities for robotic process automation to streamline tasks and improve handling times when volumes spike.

If you’re considering fine-tuning the management of your fraud case load, contact us today to see what we can do to help position your organization for success in your journey to reduce fraud.

[Editor’s note: this article was written by Quan Baker, former Bridgeforce consultant]