Most people know a shaggy dog story is a long-winded tale that leads to a disappointing anticlimax. Recently, some industry commentators (but not all) have been comparing this kind of campfire tale with the race toward “enterprise fraud management” in banking, concluding that it is only going to lead to disappointment in the long term.
But should we be so dismissive? I would counter that enterprise fraud management has simply not been fully understood in the past, either conceptually or practically.
Many banks have traditionally interpreted that ominous word “enterprise” to mean the adoption of a single super-system, believing that the only way to manage at a customer or relationship level, rather than at a transactional or account-specific level, is to have all records, activity and changes housed, analysed and interpreted by the same monolith. But size and complexity typically equals cost and a single system gives rise to issues of constraints, resilience, selectivity and scalability.
So there is a new thinking, reflected in FICO’s new Insights white paper, What is the Future of Banking Fraud Management? (Note: You will need to register to download the paper.) As we discuss in this paper, more banks are now moving toward a more pragmatic and practical vision: leveraging existing assets (data and systems) rather than overhauling them, and applying a component-driven approach to deliver the most effective and comprehensive solution.
Enterprise fraud management is more critical than ever, given the continued evolution of fraud attacks and the new emphasis on fraud protection as a customer service differentiator. Better fraud management, ultimately, will make a bank more attractive to customers. And that’s no joke.