JULY 2022ENTERPRISE SECURITY| | 19customer validation criteria should be strong and clearly defined in procedures. While I speak of data and technology later in this article, its impact begins here. Your data management system,along with its quality and integrity, is the key to successful payment fraud management. Successful data management includes controls for validating the correctness of the KYC data captured during customer onboarding and throughout the customer relationship. Without good data, the conclusions made that are based upon subsequent reporting and models will be flawed or questionable at best. In short, bad data is a primary driver of fraud loss. Failure to maintain this data is a key bad tactic and according to General Patton, it will destroy your best strategy. An organization that firmly commits to this principle, even with no other controls in place, will be more effective in the long run than an organization that may have advanced technology but bad or missing data.Perspective: The Service Request ­ Submitting the TransactionBeing able to correlate recent customer activities with usual transaction types and amounts can help to identify red flags to verify before processing. For instance, a customer instituting a password change at the same time as requesting a large payment just under the approval limit may be a red flag requiring a courtesy call to verify before processing. Other red flags may include multiple transactions of the same amount to different sources, large transactions to a new payee, and a transaction sent from a newly established business approver with a personal email address.Perspective: Technology and Analytics - AI with Big DataIt takes a combination of technology and human inspection to be successful at finding fraud and expediting valid transactions. Artificial Intelligence technology is available to pull data from multiple sources to compare a transaction against different scenarios and conditions. This data covers the different perspectives I have described. It includes customer identity and profile data, transaction history, dispute, and fraud event investigations and resolution information, and the same from other institutions. Having this information easily accessible in a big data ecosystem, rather than disparately maintained manually in a sea of spreadsheets and reports, will allow you to unlock the power of this information.Invest in a quality fraud system and make sure to take advantage of all its functionality. Calibrating the models within this technology is an ongoing task to minimize false matches of fraud. Being staffed to maintain the system and its models while also being able to quickly respond to potential fraudulent alerts is key to success and customer service excellence.The Status Report: Performance Metrics, Risks, and OpportunitiesAnother great benefit of leveraging technology is that the results can be gathered in a single location to review and query. Data mining transactional data, includes approved transactions, prevented transactions, disputed transactions, and recovered transactions. Mining this data can provide emerging trends, top types of fraud for immediate action, and insights into what is happening. This drives policy updates, emerging alerts and controls to implement, and targeted awareness topics for your customers and your organization.ConclusionCombating payment fraud requires a comprehensive strategy that implements controls that establish reasonable limits and approvals, provide customer and employee awareness and training, establish mature identification and authentication, detect questionable situations, identify concerns with quality technology solutions, and specify specific procedural actions to take to deny fraudulent transactions.An effective strategy includes gathering data from various sources and pulling queries together for identifying emerging trends, common root causes of fraud prevention failure, and the impacts of customer and organizational financial loss. Use this data to refine your strategy, which will in turn fine-tune your tactical execution of fraud prevention. Take the words of General Patton to heart with these recommendations and build the discipline needed to prevent payment fraud. ESIT TAKES A COMBINATION OF TECHNOLOGY AND HUMAN INSPECTION TO BE SUCCESSFUL AT FINDING FRAUD AND EXPEDITING VALID TRANSACTIONS
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