Customer catches fraud more often than not
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According to the survey results recently released by Bank Info Security, the most common way fraud is detected is when a customer notifies a financial institution. Below are all responses to the question, “When is a fraud incident involving your organization usually detected?”
- 76% - When a customer notifies us
- 48% - At the point of transaction
- 41% - Third party notification
- 26% - At the point of origination
- 23% - During account audit/reconciliation
Really? I find these results troubling on multiple levels. First, as a professional working in the fraud management industry I find the reliance on detection and notification by customers simply unacceptable. Customer vigilance will always play an important role in fraud management, but it should not be #1 in the category, let alone the highest ranked category by almost 30 percentage points! Second, as a member of the general consumer banking population, I think it is risky and inappropriate to put the onus on the account holder to uncover fraudulent transactions. Consumers place a high degree of trust in financial institutions and one of the primary responsibilities in keeping that trust is making sure that financial and information assets are protected from fraud. Technology solutions exist that allow institutions to take a more proactive stance against fraud. These solutions offer banks and credit unions the ability to take more responsibility for protecting the assets of a customer and for continuing to engender trust while fostering better relationships. The results of this survey should be viewed as a big red warning flag to bankers, fraud management professionals and to customers. We can do better!