Fraud managed services are when you outsource the management of your fraud detection and prevention services. Managed services can range from having a fraud specialist handle some of your fraud prevention strategies to fully outsourcing all your anti-fraud activities.
Outsourcing improves fraud management while also lowering costs. To help you decide if this approach to fraud is right for your financial institution, this guide provides an overview of the most commonly asked questions about managed fraud services.
How Do Managed Fraud Services Work?
With managed fraud services, a team of experts acts as a responsive extension to your fraud team. Fraud detection and prevention relies on software to scan each transaction for potential signs of fraud, and when the software notices an issue, it flags the transaction for manual review.
Then, depending on your needs, the managed fraud services team can review every alert created by the software, or they can step in on evenings and weekends while your team handles fraud alerts during regular business hours.
What Are the Benefits of Managed Fraud Services?
Outsourcing some or all of your fraud management needs brings multiple benefits to your organization including the following:
- Scalability — Outsourcing allows you to grow your fraud management team quickly as needed. You don’t have to worry about hiring or training new people. You simply let the managed service provider know that you need to scale up.
- Expertise — Internal fraud management is often handled by bank employees who wear multiple hats. These people understand many aspects of the banking industry, but they are not fraud experts. An outsourced fraud management team, in contrast, is full of experts who have extensive experience in fraud prevention.
- Compliance — The experts on a managed fraud services team are compliant with all international and domestic regulations. They have worked with financial institutions from around the world, and they understand the importance of compliance in this industry.
- Safety — Managed fraud analysts access your data remotely, but they also use a secure connection and ensure that no confidential data ever leaves the safety of your servers.
- Cost Effective — Typically, the cost of outsourcing fraud management is significantly less expensive than hiring an in-house fraud management team.
When comparing costs, keep in mind the additional expertise you get from outsourcing, and consider all the ancillary costs of hiring an in-house fraud management team such as benefits, office space, recruiting, onboarding, over-time, etc..
What Are Other Types of Fraud Managed Services?
Alert management is just one aspect of managed fraud services. Here are some additional services you may want to outsource to a team of fraud experts:
- Fraud process review — Let a team of experts review your financial institution’s existing approach to fraud and help you identify areas for improvement.
- Fraud software implementation — Hire a fraud specialist to help you choose and implement the most effective anti-fraud tools for your financial institution.
- Fraud detection and prevention training — Your team plays a significant role in fraud detection and prevention, and training from fraud experts can help improve this line of defense.
- Fraud strategy customization — Don’t use a one-size fits all anti-fraud strategy. Instead, make sure that you work with a managed fraud services team that can customize a fraud strategy to meet the unique needs of your financial institution.
- Rules management — A managed fraud services team can also review the rules used in your fraud detection and prevention processes, and they can finetine the rules to improve fraud management and catch the latest fraud trends.
Fraud management services can help you through every step of improving your anti-fraud strategy including analyzing current processes, implementing new processes, and constantly refining and improving your approach to fraud detection and prevention.
Contact Us About Managed Fraud Services
At SQN Banking Systems, we offer fraud managed services from Sigma Six trained analysts who can review your cross-channel transactions, and we also offer fraud process reviews, fraud solution implementation, and additional managed services.
To learn more about how our fraud managed services can enhance and improve your financial institution’s fraud detection and prevention processes, contact us today.