Prevention, yes... but don't forget the cure

The old adage that ‘prevention is better than cure’ is especially applicable when it comes to banks’ card fraud detection efforts. The best customer service is of course to prevent fraud from occurring in the first place. However, no matter what measures banks take, there will always be some fraud that slips through the net. Therefore, banks must give careful consideration to the ‘cure’ as well as the ‘prevention’.

Imagine that you receive a call from a fraud analyst at your bank, who informs you that in the last hour a fraudulent transaction has been conducted using your account. The fraud analyst explains to you that the funds have been recovered and will be refunded to your account, and lets you know that a new debit card will be posted to you on the same day. How do you feel? In this context, customers actually report very good experiences. It tends to be very positive for the banks and really can promote loyalty. However, in an alternative scenario, if you notice the fraudulent transactions before your bank does, and are then faced with a long process to recover your money, then it is probably one of the greatest motivators for attrition.

The findings of the recent global survey that we conducted indicate that customers care about how quickly their bank identifies a fraudulent transaction and how quickly any stolen money is reimbursed. They also want their bank to identify the fraud before they do. In order to meet these expectations and retain customers, banks need to evolve their fraud strategies and ensure they are implementing the latest anti-fraud tools and techniques.

Fraud prevention may seem like a universal issue, but for banks that operate on a global level, it is also important to understand regional differences and tailor their customer service accordingly. In Singapore and Germany, for example, consumers felt the speed at which their bank identified the fraud far outweighed the importance of the speed of reimbursement. This was in contrast with the UK and Brazil, where customers were most concerned about the speed at which their financial institution reimbursed the money.

Across the globe, card fraud is not only leading to losses but is also having repercussions at the level of brand, reputation and loyalty, at a time when banks are under particular public scrutiny. Whilst banks are constantly working to develop their detection tools and stay one step ahead of the fraudsters, it’s crucial that they don’t forget to look after the customers that do unavoidably become victims. Only then can banks truly win the fight against fraud.