Three Insights on Enterprise Fraud Management

In many financial institutions, different products and/or channels are often managed by different teams. For fraud management, this means the people managing card fraud are not engaged in managing ACH payment fraud, and the person worrying about customer experience is not the person awake at night with fraud worries.

Forward-thinking banks are taking a more holistic approach to fraud management. We’ve been fortunate to work in partnership with our clients on such initiatives and these three insights have helped them to develop an enterprise-wide, holistic approach to 21^st century fraud management.

Short-Term Gains and Long-Term Goals Are Both Vital

Enterprise fraud management can be a daunting endeavour for our clients — there is no “Big Bang”. Where do you start? Be pragmatic, it’s a journey. You first need to define what is urgent and can be achieved now, and then identify and track those you can mature into your long-term strategy. As you are developing your roadmap, there are multiple aspects to consider:

• Understand your data and processing ecosystem — What is your current state? What can you directly control and what are you reliant on a third party for?  Identifying which of your products has the highest value in creating a holistic customer profile in relation to its deployment effort is a great place to start your enterprise fraud journey.
• Have a strategy to solve for the whole customer — Comprehensive customer level behavioural profiles are critical to any enterprise fraud plan. Cross channel/product customer behaviour is a must, but it is critical to understand the full ecosystem of risk. Do you know the detailed risk of devices, ATMs and merchants that may be creating havoc in your ecosystem? Do you know what normal, good behaviour looks like for your legitimate customers? Profiles are a great means to tabulate, monitor and understand the risk of these entities.
• Leverage analytics — Fraud attack vectors are constantly evolving, with the sole purpose of penetrating your defences. Machine learning analytics built on rich consortium data sets are a great means to identity intricate changes in a fraudsters attack vector. Layered protection that utilizes a combination of analytic techniques and an egress to all of your channels/products is most effective to thwart off more sophisticated attacks. Do your analytics have a complete view to your product ecosystem?
• Understand and envision the impact of your policies across channels – Do your rules and strategies have a complete view into all your products and operating channels? Are your policies and rules optimized to balance customer experience and efficiently detect fraud across channels? Can you seamlessly blend technology that automates customer management with your human-led customer engagement to drive the best possible outcomes? How will you implement short-term strategies that also inform the development of long-term enterprise-level strategies?
• Define efficient, integrated operating environments – There is a complex array of customer, alert and investigative case management tools available in the market. Does your case, alert and investigation strategy span your operating channels and products? Does your operating plan for case management include visibility into complex cyber, compliance and fraud threats? Do your systems and processes definitions support efficient execution?
• Understand where your threat vectors originate. There are external threats such as those posed by first-party and third-party fraud and there are internal risks to take into account. This includes accidental non-compliance, error and waste as well as deliberate action by employees. All of these can enable fraud.

Enterprise Fraud Management Requires the Right Technical Foundation

Your enterprise fraud management journey needs to be supported with a flexible, sophisticated platform with the capabilities required to meet your defined business objectives.

• Solutions supporting your journey must leverage the latest machine learning, artificial intelligence and consortium intelligence to adapt to evolving threats and payment channels, and work across the customer lifecycle.
• The underlying business architecture and approach must address your omnichannel, customer-level data needs, allowing you to created balanced decisions across your channels.
• Lastly, and most importantly, your platform should be customer first. Solutions that enable holistic customer views — and leverage broad sets of channel, product and device intelligence — will allow you to create meaningful customer engagement and build long-term loyalty for your institution.

A multi-tenanted fraud prevention platform gives analyst and strategy teams a complete solution suite for risk management and payment decisioning. The customers we have worked in partnership with have found it very valuable to be able to integrate various fraud defenses on a single fraud strategy platform, across multiple products and channels.

The Right Help Is Important

An expert and objective outsider can drive success. The customers we’ve worked in partnership with have found the services of the Fair Isaac Advisors to be invaluable in driving their enterprise fraud management approach.

Advisors can help you to establish the right goals for your enterprise; architect journeys that account for the people, process and technology changes required to meet your objectives; and support with expert execution. This is critical to the shared success of real-world enterprise fraud solutions and is powered by industry knowledge and on-site experience from hundreds of global advisory engagements.

If you are a FICO® Falcon® Fraud Manager customer, you may find that help from Fair Isaac Advisors is included in your services agreement — if you’re not sure, why not ask?