Facilitating Cross-Channel Fraud Resolution

In a recent Bank Fraud Forum blog post, Discussing Multi-Factor Authentication, Shirley Inscoe stated that cross-channel fraud detection enables the analysts "...to see the complete picture with regards to a customer or account, and detect suspicious events that would otherwise result in losses...” Having been an investigator as well as a manager of a cross-functional fraud team for over 2 decades, I could not agree more.

However, it must be said that even if you provide a holistic picture of fraud to the analysts, it does not do them - or your customers - any good if they are not skilled in investigating and properly mitigating cross-channel fraud alerts. For those who have worked fraud over multiple channels, there are varying rules and regulations that may entail some compliance issues, including Reg E, Reg CC, UCC Articles 3 and 4, Reg J, Check 21, Clearinghouse Rules such as Rule 8, BSA, the bank’s Depositor’s Agreements, etc. I think you get my drift. Because most fraud teams are disparate, having truly skilled cross-channel analysts is not commonplace.

In looking across the vast array of existing alert and case management systems, the majority are not designed in a manner to properly record and track cross-channel loss categorization. Your only option is to select one loss type category or transaction channel. In addition, there is no option for a root cause breakdown, nor any way to track losses within an alert by transactions when you have a cross-channel alert. Also, training the analysts and investigators to handle the vast array of financial fraud takes serious time, energy and money as well as a commitment by everyone to stay on top of the changing rules and regulations. And, unless you are extracting various data from all of the alerts and cases and then performing manual trending on these alerts and cases, you likely are not reporting accurately on how your bank is losing the money. In effect, this leads to inefficient and often ineffective risk mitigation efforts.

One way to help get ahead of the training curve is to have an alert and case management system that at minimum enables you to:

- Aggregate alert output from multiple detection systems

- Track more than one loss type category and more than one fraud channel per alert or case

- Record losses in the alert or case by transactions as well at the alert or case level

- Automate reminders as well as workflows for specific time frames based on the fraud loss type and applicable rules or regulations

- Report on root cause analysis and fraud attempts across product, channel and market

- Quickly access ‘Help’ functionality as a quick reference on various rules and regulations to include reporting and return time frames

Having this functionality will help ensure consistency in the alert disposition and investigation, provide a better customer experience, and provide better root cause analysis for loss reporting and tracking. 

Fraudsters are not waiting for the analysts and investigators to be trained to handle cross-channel fraud. Commercial and retail customers expect their financial institutions to have the most skilled fraud analysts and be aggressive about protecting their money. That’s why they entrust their money to the bank and not stash it under a mattress! Having state of the art alert detection and an aggregated alert and case management system that incorporates cross-channel functionality not only provides more time to cross-train analysts but also provides enhanced reporting and improved loss reduction efforts, saving everyone time and money. Bottom line - is it not about cost savings, efficiencies, positive customer experience, and (often overlooked) protecting your brand?

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