"I think there are two ways customer experience interacts with fraud prevention. First, and probably most importantly, successful fraud prevention shields the customer from the experience of being a victim of fraud. When a fraud suspect is appropriately acted upon and the fraud prevented, the customer is blissfully unaware of the event, and rightfully so. A failed prevention …. Well, we know how that goes. False positives on the other hand have two effects. First, in an effort to reduce false positives some may employ a strategy of raising the thresholds for certain detection mechanisms. This results in lower dollar frauds flying under the radar resulting in detection by the customer. Now we've got a bad customer experience. I don't know about you, but even if the bank makes me whole, I'm not very comfortable with the fact that a fraudulent item posted to my account. Even the explanation that it was a "processing error” (if that is used) doesn't help much. Second, customers are generally unaware of false positives…unless they are acted on in a way that affects the customer's account. If an action were taken like returning an item, or placing a hold on the account, the customer will likely be negatively impacted, another bad customer experience outcome. Customer experience needs to be taken into account when deciding how to deal with false positives. It's not just about how much that institution is willing to risk in dollar loss (as in threshold setting), but also how much are they willing to risk in bad customer experience outcomes. Every fraud event has a human repercussion. While the primary focus of most loss prevention programs is to protect the institution, I would submit to you that protecting the customer is protecting the institution. In a previous post, Don't Let Fraudsters Steal New Revenue 3/30/09, I talked about the loss prevention manager collaborating with the marketing and product management folks. By understanding the products you are planning to offer including their vulnerabilities, you can improve the business case for that product by reducing expected losses. This concept applies to existing products as well. A better, albeit more difficult way to reduce false positives is to understand what causes them and eliminate the cause. You'll never get to zero, but you can certainly make a dent. This requires meticulous, detailed work, but from my perspective it is worth the effort. I am also aware that this is much tougher for some detection systems than others, maybe even impossible. If the latter is true, start looking around. "

"There are in my view three things a fraud analyst must have • An understanding of how fraudsters attack your institution • An understanding of your institution's products (particularly from a vulnerability standpoint) • A very good understanding of how your detection system(s) work(s). (Data, rules, weightings, research capability, etc.) Having been an investigator, you have the first one down, and you probably have a pretty good understanding of the systems your institution uses. The other two, you'll have to be the judge. To me, the biggest difference to me between the two roles on a day to day basis is the analyst is all about detection, verification, disposition, and prevention, while the investigator is about discovery, recovery, process management, and reporting. Another huge difference is speed. The analyst's need for speed puts me in mind of a scene from the movie Top Gun, where our heroes are walking down the flight line and saying while they high-five "I feel the need….the need…for speed.” The analyst typically looks at hundreds of items a day. Their ability to quickly recognize what they are looking at, take steps to verify it, and quickly make a decision and disposition the item is key to their success. In regard to training, the most prominent fraud- focused certification is the Certified Fraud Examiner (ACFE.Com). Another, the Certified Risk Professional (bai.com) is popular with regulators. The primary anti-money laundering certification is the CAMS (acams.org). Hope this is helpful. "

"Mike, you are spot on. Some F.I.'s are seeing the benefits of having the open dialogue between the analysts and investigators and the sharing of data, which does many things from reducing losses, mitigating additional/future exposures, reduces reputational risk and provides better cross training for employee development. I feel there is still room for growth within many F.I's to enhance the sharing of data between other risk areas in the F.I. such as internal fraud and AML groups. Over my years in financial fraud investigations, I many times said the crooks have a better network of communication than we ever did. As long as that is the case, the crooks will continue to walk through the door while we decide who is going to watch the house. "

"Dear Mike. I staying in the top of fight against fraud process in the Ukrainian division of the international bank. And I must say according to my experience, that we can't compare work of fraud prevention and investigation teams. They are both in my unit, and can't exist without each other. The main goals of fraud prevention unit are to support underwriting process (fraud scoring, client verification methods and rules etc.) and to seek fraud schemes in current assets and liabilities databases. Fraud analytics unit - is a head of fighting against fraud system, but fraud investigation unit - is its hands. They are using information provided by fraud analytics unit, doing fraud investigations and reporting and the main - describing new fraud schemes, discovered in the fraud ivestigation process, for putting them as algorithms by fraud analytics in the fighting against fraud system. So it doesn't matter when you are expecting fraud losses - BEFORE of AFTER. You always prepared thanks to work of fighting against fraud system. "