Managed fraud services can refer to any fraud detection and prevention services that you outsource to a third party. This may include anything from deploying fraud detection software to reviewing fraud alerts from your software to training your employees on anti-fraud strategies. Your managed service provider can also help guide you toward the best strategies and solutions for your needs.
Fraud never stops, but your employees need time off. With managed fraud services, your bank can safely process transactions 24 hours a day, seven days a week, 365 days per year without straining your internal resources. Managed services augment the efforts provided by your in-house team, and they ensure that you have consistent protection even during nights, weekends, and holidays.
Wondering if your bank needs managed fraud services? To help you decide, this guide outlines the basics, and it provides you with links to resources with more information.
Managed fraud services are when you outsource your bank’s fraud detection and prevention efforts. Managed services can include fraud alert management, fraud process reviews, software implementation, and employee training. These services can also include rule management which updates the rule sets used in your fraud detection software.
Types of Managed Fraud Services
Fraud detection and prevention include a wide variety of services and solutions. When you hire a company to provide managed fraud services, you can select the specific services you need. Here are the most common types of managed fraud services.
Fraud alert management provides your financial institution with access to a team of fraud specialists. When your fraud detection software flags a transaction as potentially fraudulent, an analyst reviews the transaction through a secure connection. Then, they decide if the transaction is legitimate or fraudulent.
You can use managed fraud services to monitor all of your flagged transactions. Or you can use an internal team during business hours and then outsource to an external team when your bank is closed. These services are very scalable. This allows you to increase efforts easily as needed without hiring staff or investing in more equipment.
Your managed fraud services provider can also review your existing processes. They can look at your workflows and help you look for areas of vulnerability. Then, they can help you identify the best strategies, solutions, and services to improve your fraud detection and prevention processes. You can also review your own fraud detection processes to look for potential vulnerabilities.
Most fraud detection software for banks isn’t out of the box. You don’t just hit a button to download it on your computers. Rather, you need to set up the software carefully to ensure that it integrates with all of your existing systems. When you hire a company to provide managed fraud services, they can help you set up the software and train your employees to use it.
Your staff plays a critical role in your fraud prevention activities. Even when you automate fraud detection using software, your team is still involved in manual reviews. They can also help your financial institution to avoid fraud by asking the right questions to your customers.
You can have a managed fraud services company provide training to your employees as you work to create a risk-aware culture at your financial institution.
Your managed services can also include customization. When you select a company to help you with fraud detection and prevention, they can analyze your unique needs and help you implement the most effective strategies for your situation.
Benefits of Managed Fraud Services
Working with a managed fraud services company helps your financial institution improve fraud detection rates and reduce losses. Beyond that, managed services also offer the following benefits:
● Help With Deployment and Integration
Managed fraud services ensure that you deploy your anti-fraud solution correctly and that it effectively integrates with your other software and solutions. They also streamline your existing solutions and help you create a system that monitors fraud risks across all channels.
● Compliance With Industry Regulations
When you work with a managed fraud services provider, they ensure that you are compliant with the rules and regulations of the banking industry. This is why it’s critical to work with a company that focuses on the banking industry.
As a banking professional, it’s important to understand what consumers expect from their banks. Ultimately, they want convenience, but they also want security. To that end, you need to find ways to reduce fraud threats throughout the customer journey. You also need to embrace fraud detection and prevention strategies that build consumer confidence in your financial institution.
Balancing your fraud detection efforts with the customer experience can be challenging. Overly tight security controls often end up impeding customers from completing legitimate transactions, but on the other hand, if your security controls are too lax, your bank will end up suffering an excessive amount of fraud.
Managed fraud service providers help you strike the right balance. They ensure that your fraud detection tools don’t create unnecessary barriers or delays for customers.
A managed fraud services provider will also leverage cyber intelligence to help your financial institution stay on top of evolving threats. Fraud detection software uses algorithms to look for common signs of bank fraud. When your team manually verifies whether or not fraud has occurred, the machine learns from their responses. This improves your software’s efforts and reduces the risk of false positives.
However, this strategy can only detect known cases of fraud. Thieves are constantly changing their tactics to stay one step ahead of the software, and they try to employ strategies that aren’t likely to be flagged as fraudulent. Cyber threat intelligence helps managed fraud service providers learn about evolving threats, and that enhances protection for your bank.
At SQN Banking Systems, we offer several services including managed fraud services, cyber threat analysis, software as a service, hosting for fraud software, and fraud process review. We understand that financial institutions all have different needs, and we work closely with our clients to customize packages that contain the exact services and solutions they need.
Want to talk more about how managed services can help reduce your bank’s rate of fraud? Then, contact us today. We can talk with your about your risks, review your current anti-fraud strategies, and provide you with the managed services you need to protect your financial institution.