Credit crunch is biting, but banks can fight back

Even the most optimistic of pundits aren’t really seeing the light at the end of the tunnel for the credit crunch yet. Organisations around the world have been forced to cut staff, share prices have fallen, and everyone it seems has an opinion on bankers’ bonuses.

Banks and their employees, under more scrutiny than ever, are in a very difficult situation. They know that they have to be seen to be delivering operational efficiency and a reduction in losses, but at the same time they have to be careful about what investments they are making in order to get those returns.

For the fraud department, the dual challenges of delivering operational efficiency and also reducing losses are actually achievable, and many will have already been thinking about these issues before the bottom fell out of the world’s financial markets.

Loss reduction is always an issue for fraud departments. Fraud is evolving and moving, and the growth in card-not-present or cross border fraud, plus the phishing attacks that have targeted online banking services, mean that fraud teams have to look at increasingly sophisticated tools and technology. Automation of previously manual operations and real-time fraud prevention is key to stopping losses before they happen.

Automated fraud systems (where the transaction monitoring system intelligently and accurately makes fraud assessments), and automating previously manual processes (such as alert review, transaction blocking and customer contact), can also help banks deliver the goal of improving operational efficiency. By processing more transactions, more quickly and more accurately, with minimal impact to the customer experience, the fraud department could be very well placed to meet the challenges that banks will be putting on them for the rest of 2009 and beyond.