Every day, fraudsters are developing new ways to attack cardholders. They often do so through multiple channels, from the contact center to mobile banking, and through authorization and authentication.
To ensure a positive member experience, credit unions must maintain a successful fraud-fighting strategy. But if protections are not established with members as the foremost consideration, credit unions risk creating a negative member experience such as a member’s transaction being declined when fraud is not present. Data-backed tools such as PSCU’s Linked Analysis can help walk the line and cultivate a consistently positive member experience.
What Is Linked Analysis?
In recent years, fraud has been perpetrated not only across authorization channels but also among any avenue where a fraudster can access member data. Once fraudsters gain access, without protection in the authorization stream, they are able to commit even more types of fraud.That is why it is important to look at members’ data holistically from every channel so as not to allow any fraud to slip through the cracks.
PSCU’s most advanced fraud detection tool, Linked Analysis, populates data in real time from multiple sources and channels, leveraging machine learning to effectively look for trends and anomalies. Using a data lake approach, it monitors every transaction, interaction, and event across all channels. By aggregating all monitored activity, it allows a financial institution more power to fight fraud or even stop potential fraud before it occurs.
Here is an example of how Linked Analysis can help combat fraud:
- A fraudster attempts to make a transaction, but Linked Analysis uses connected data points across all channels to identify this unusual activity for the cardholder on the account.
- When this happens, the system is alerted and an immediate hold is placed on the account. Future transactions are blocked to avoid additional losses, preventing the need for further fund recovery.
- An experienced case management representative reaches out to the cardholder using their preferred contact method and walks them through the recovery process.
- A new card is swiftly sent in the mail and is also provisioned to the member’s digital wallet for immediate use.
- The cardholder is able to move on with their day with peace of mind and without the need to spend hours recovering hard-earned money and canceling cards.
Breaking It Down
By employing intelligent software that can quickly identify potential fraud, the credit union is able to ensure a positive member experience in several ways.
The cardholder’s losses which can often be large and debilitating are either blocked altogether or extremely minimized due to the immediate identification of fraudulent activity, leading to the hold on future transactions. Additionally, instead of having to wait days or weeks to continue using their card, the member is immediately provisioned a card to their digital wallet so they may continue on with their day without any significant interruptions.
Although the potential for a negative experience is substantial when it comes to fraud, the use of Linked Analysis helps create a positive experience. Trust is built between the member and their credit union, and a lasting favorable impression is established.
It is vital for a financial institution to consider how it can prevent, stop, and even predict fraud. While most credit unions have fraud protection measures already in place, the missed opportunity is scalability and reach. Credit unions must deliberately invest in technologies and capabilities that allow them to protect and serve members more intelligently. When doing so, the most important consideration is always the cardholder’s experience, and how you, as their credit union, can create the most frictionless, stress-free experience possible.
Karen Postma is Managing Vice President of Risk Analytics and Fraud Services at PSCU, where she helps clients implement comprehensive fraud mitigation strategies that encompass authentication, transactional fraud, and account takeover, just to name a few. Her background of more than 20 years of payment processing experience, with direct leadership of fraud prevention, fraud detection, chargeback, and risk management expertise, has allowed her to understand both detailed and strategic practices that allow credit unions to balance their fraud and member experience. She also has extensive client management and engagement experience within the credit union industry.