EMV chips made credit and debit cards safer, but unfortunately, the built-in security of these cards is only useful for in-person transactions. Because of that, fraud related to card-not-present (CNP) transactions has increased substantially over the last few years. In 2016 alone, CNP fraud increased by 42%, and card issuers bear 72% of the costs of most fraud-related losses. To protect your institution, consider the following tips.
Educate Your Clients
Your clients need to know how to keep their information safe. To ensure they do, you may want to give them fraud protection tips when they open their accounts. You may also want to send out informational emails or newsletters to your clients, and or even hang signs in your bank.
In particular, your clients should know to keep their card details safe. If they write the number down or have it on a document, they should always shred those papers before throwing them away. They should also know about the importance of using safe websites with valid security certificates, and ideally, you should let them know about the dangers of public Wi-Fi as well.
Invest in Anti-Fraud Technology
Ideally, you should also have anti-fraud technology in place. Your software should be able to identify strange spending habits related to your customers’ accounts. For instance, if your customer only spends about $1,000 per month on in-person transactions and all of a sudden a spate of online charges appears on their card, your fraud protection software should pick up that anomaly and flag the transactions for review.
Alert Your Customers About Every CNP Transaction
You may want to consider alerting your customers every time there’s a CNP transaction on their account. For instance, if you send customers texts or emails every time there’s a transaction, they can simply delete the messages if they authorized the transaction, but if they didn’t make that purchase, they can alert you.
Not every customer will receive these alerts right away, but as so many customers are constantly online or using their phones, this can be an effective way to reach a lot of people. The sooner they know about potential fraud, the sooner they can alert you.
Offer Identity Theft Protection
Sometimes card-not-present fraud involves someone opening an account or a line of credit in your customer’s name and using those details for card-not-present transactions. To help protect both your customers and your financial institutions from these types of transactions, you may want to offer identity theft protection to your clients.
With identity theft protection, your clients get notified when there are credit inquiries or new accounts opened in their names. That doesn’t necessarily help your financial institution directly. However, like the above scenario, it ensures that your customers find out about potential fraudulent activity right away, and in turn, it also ensures that you find out relatively quickly.
Quality fraud protection is essential if you want to safeguard your bottom line, your reputation, and your customers’ finances. To learn about our fraud protection solutions, contact us at SQN Banking Systems today. We make fraud protection easy.