Financial companies are faced with an escalating threat of fraud. This is fueled by the rise of digital adoption and emerging payment types more likely to be targeted by bad actors.
As a result, financial companies are facing increasing scrutiny from regulators and customers. This has prompted them to prioritize fraud management strategies and focus on the consumer’s experience.
Invest in Technology
As financial companies face fraud threats and increasing regulatory scrutiny, they are turning to technology as a weapon to fight back. Using a new fraud detection system in the fight against fraud can reduce costs, improve customer experiences, and help regulated companies comply with regulations such as Know Your Customer (KYC) and Anti-Money Laundering (AML) sanctions.
While investing in technology to combat fraud is essential, ensuring that your technology suits your business needs and infrastructure is vital. Fraud detection solutions that fit your business environment can be very effective and catch sophisticated criminals who might try to defraud you in the future.
While many companies rely on manual fraud detection systems, these systems are no longer the best way to keep up with a fast-paced environment and an explosion of digital transactions. Businesses must invest in a comprehensive data analysis solution that can give them real-time insight into their customers’ behavior and prevent fraudulent activity such as a first party fraud.
Take Steps To Prevent Fraud
Fraud is a serious threat to any company, especially to small businesses. It can result in substantial financial losses, legal costs, and a ruined reputation.
Taking steps to prevent fraud can help your business fight back. This includes implementing internal controls that make it harder for fraudsters to commit their crimes and ensuring staff are trained up on fraud prevention (give them a refresher if they need to check fraud prevention best practices).
For example, limit employees’ access to your company’s accounting system. Ensure all transactions are properly authorized and documented before they’re made.
Review sales receipts and incoming bank deposits often. If there is a discrepancy in the number of checks and receipts, consider it an indication of fraud.
Scrutinize credit card statements and bank account activity online and in person to verify numbers line up. This is a crucial internal control for any company to know how to reduce credit card chargebacks.
Improve Customer Service
Financial companies must improve customer service across all touchpoints to fight fraud effectively. They need a team of rockstar support professionals dedicated to providing excellent service and a culture that prioritizes it.
Giving agents the resources they require to solve issues quickly and effectively is one way to achieve this. This helps reduce the time customers wait for their queries to be answered, improving the overall customer experience and lowering churn.
Another way to improve customer service is to communicate better with potential customers. This involves guiding them through the sales process and constantly answering questions they may have about your products or services.
For both false positives and actual fraud, communicating with customers can reassure them and make them more willing to take an extra step, which helps prevent fraud in the future. This can help financial companies protect their customers’ accounts and boost their reputation.
The financial services industry encompasses a broad array of companies. It includes banks, credit card companies, investment firms, insurance and other types of businesses that manage money and financial transactions on behalf of consumers.
In the realm of fraud prevention, one of the most effective methods is to educate your employees about best practices and pitfalls that could lead to fraudulent activity. Employees can receive this education by learning about the latest technologies and how to protect themselves and their customers from cyber fraud, identity theft, phishing scams and other personal and business data threats.
Another way to fight fraud is to clarify that your company cares about its employees and the communities in which it operates. The best ways to do this include offering benefits that help employees with their financial needs, such as education and advice programs for saving money and managing debt. These benefits not only benefit your employees, but they also boost productivity and save your company money.