To maintain a competitive edge, banks need to be customer-centric. Well aware of this fact, many banks have claimed to embrace customer-centric transformations, but over half of these banks have experienced at least one subpar transformation in the last five years. The reason? Their transformations were driven by business needs, rather than customer satisfaction.
Of course, whether you’re revamping your brand image or just dealing with daily operational decisions, you have to focus on your bank’s bottom line. This becomes especially important in the face of increased competition from digital fintechs, labor shortages, and declining revenue. However, you can’t lose sight of your customers — your business relies on attracting and maintaining them.
To be successful in the banking industry, you must constantly think about how to streamline and improve the customer experience. This is a multi-faceted, ever-evolving challenge, and to help you out, this post looks at how to embrace a customer-centric experience in your fraud detection and prevention strategy.
Want to reduce fraud losses while also keeping your customers happy? Then, consider these customer-centric tips.
1. Have a strategy.
Fraud prevention isn’t a one-time process. You can’t just buy some software, set it, and forget it. Instead, you need to refine and improve your processes on a regular basis. Failure to do so puts your customers at increased risk of fraud, and by extension, it puts your bank at risk of losing customers when fraud occurs.
Even if your budget is tight, don’t assume that you can’t afford to upgrade. When you opt for hosted fraud solutions, you don’t have to worry about investing in expensive hardware, and managed solutions save you money on internal IT costs. Even more importantly, this investment helps to reduce losses, while simultaneously protecting your relationship with your customers.
2. Use pattern-based fraud detection.
You need a solid strategy to protect your customers from fraud, but you don’t want to impede them from freely using their accounts. Unfortunately, this is often exactly what legacy fraud detection tools do. They flag any transactions outside of certain parameters as fraudulent, and then, they stop the payment from going through.
This is great if the transaction is fraudulent, but it’s awful for customers who are trying to make a legitimate purchase. To prevent this from happening, your fraud solution should use machine learning to develop an understanding of your customer’s patterns. Ideally, your fraud solution should only trigger a fraud warning if something unusual happens on your customers account.
3. Leverage intelligence about cyber threats.
On one hand, you need tools that get to know your customers, but you also need to understand what the criminals are doing. Fraudsters are always modifying their tactics. They’re constantly trying to find the most effective ways to steal money.
To learn about the newest patterns, you have to hang out with the bad actors and learn about their latest and greatest techniques. In other words, you have to monitor the dark web, read hacker forums, and gather any other intel possible about their behavior. This is why it’s critical to work with a fraud detection partner that uses cyber threat intelligence.
4. Streamline fraud-related communication.
Communication is the cornerstone of any great relationship — and it’s critical when you’re dealing with people’s money. Don’t make your customers jump through a lot of hoops when they need to report fraud on their accounts, but also make sure that they can reach you easily about fraud false-positives.
If someone’s debit card gets rejected for supposed fraud, don’t make them call you and sit on hold to find out what’s happening. Instead, immediately send them a text or an automated phone call. Allow them to confirm or deny the transaction, and then, tell them to run the card again if the transaction is legitimate.
5. Talk about your fraud efforts.
Your customers want fraud tools that work in the background, seamlessly protecting them from fraud without disrupting their ability to use their accounts freely. The best fraud detection tools should be undetectable by the customer.
However, you obviously want your customers to know what you’re doing. Share stats about your fraud prevention successes and promote your anti-fraud efforts in your marketing campaigns. Also, stay front of mind by educating your customers about different risks in the marketplace.
Get Help Fighting Fraud at Your Bank
If you have your head in the sand about fraud, it’s time to make a plan. Stop wasting money on legacy signature verification tools, rule-based fraud detection software, and overpriced hardware. Bring your financial institution into the modern age with hosted, managed fraud solutions that work in real-time and leverage machine learning to improve their accuracy with use.
At SQN Banking Systems, we have a range of solutions and managed fraud services, and we can customize the ideal solution for your financial institution. Ready to learn more? Then, contact us today. We can start with a free fraud workflow analysis. Then, we’ll talk about the best strategies for your unique vulnerabilities.