Improving the Customer Experience with Self-Service Fraud Prevention

Posted by Deborah Peace on Oct 3, 2018 9:30:00 AM

ACH Alert Treasury Management White Paper

Check out ACH Alert’s latest whitepaper, “Transform Treasury Management with Actionable Fraud Prevention Solutions.”

Javelin’s 2018 Identity Fraud Study revealed that a record number of U.S. consumers fell victim to fraud last year - 16.7 million to be exact – with the amount stolen totaling $16.8 billion. After a fraud attempt, account holders may question their financial institution’s ability to keep their funds safe, so banks and credit unions, especially those seeking rapid growth, must take action to combat fraud swiftly and effectively or risk losing account holders to competitors.

Javelin’s 2018 Identity Fraud Study revealed that a record number of U.S. consumers fell victim to fraud last year - 16.7 million to be exact – with the amount stolen totaling $16.8 billion. After a fraud attempt, account holders may question their financial institution’s ability to keep their funds safe, so banks and credit unions, especially those seeking rapid growth, must take action to combat fraud swiftly and effectively or risk losing account holders to competitors.

Financial institutions must remember that the customer or member experience is an integral part of modern banking, as it is the largest influence on the way many of today’s businesses operate. Expectations for ease of use, convenience and on-demand service dominates the decision-making process and ultimately, plays a major role in determining what financial institution an account holder will do business with, or continue to do business with, after a fraud attempt.

To ensure an exceptional banking experience, banks and credit unions should rethink their current approach to treasury management and fraud prevention. Traditionally, security is hidden to the account holder while the financial institution monitors for suspicious transactions from the backroom. If an account holder detects anomalous activity, it is likely they noticed it after the fact by reviewing their online bank statement. From the bank statement, account holders can typically only see the dollar amount and the company that initiated the transaction with no additional details. By then, the funds have already left their account and the account holder must start the dispute process.

The conventional dispute process is manual and time-consuming, which frustrates account holders. For corporate account holders, the process for mitigating fraud is especially problematic, given the shorter timeframe allotted to businesses to report fraudulent activity. Businesses must report fraud within two days, compared to the 60 days allotted to consumers.

The methods used for fraud prevention will no longer cut it, as these tactics burden financial institution employees and negatively impact the customer or member experience. To illustrate how burdensome traditional fraud prevention methods are, consider the following scenario:

  1. A financial institution must manually communicate a suspicious transaction to the consumer through phone calls and recorded messages.
  2. If the account holder identifies the fraudulent transaction first, they must call the financial institution to research the transaction.
  3. Once the bank or credit union researches the transaction, the account holder has the option to dispute it.
  4. In order to dispute the transaction, the account holder must visit a physical branch and complete a dispute form.
  5. The account holder must then wait for up to ten days to resolve the situation and see the return of their money.

The key to combatting fraud in real time requires a solution that enables account holders to take action in protecting themselves against suspicious and fraudulent activity. An online banking system coupled with an automated, self-service fraud prevention solution that uses proactive, preventative security measures will encourage customers to protect themselves and take charge over the movement of their funds. After all, who knows their account better than the account holder?

Financial institutions that leverage such systems will enhance the flow of transactions, improve the overall digital banking experience and reduce the risk of losses from fraud for their institution. Imagine a streamlined fraud prevention process like this:

  1. The account holder reviews transactions and notices an unfamiliar charge.
  2. The account holder disputes the transaction from the comfort of their home or office. The institution then processes the transaction according to the account holder’s instructions.
  3. The transaction dispute is resolved immediately, prior to funds ever leaving the account.
  4. A digital and automated fraud prevention system lets financial institutions transform fraud prevention from a cost center into a new fee income opportunity.

Simple, self-service solutions that automate fraud detection and prevention can vastly improve the customer or member experience, establishing trust and boosting loyalty with their financial institution.  In a market where competition is fierce and customer experience is everything, the financial institutions that are easiest to do business with will dominate.

To learn more about fraud prevention techniques, download ACH Alert’s white paper, “Transform Treasury Management with Actionable Fraud Prevention Solutions."

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Topics: Treasury Management

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