Financial criminals continue to devise new methods to defraud merchants, credit unions, banks, their members and customers, making it crucial to remain proactive in their strategies for preventing costly attacks.

Rule-based fraud management, which uses pre-defined criteria based on patterns, behaviors, or characteristics associated with fraud, to identify and flag potential fraudulent transactions, is a time-tested method in the fight against fraud, but it is only as effective as the quality of the rules devised and implemented by its users.

One way for financial institutions to maximize the benefit of their rule-based systems is to engage an expert to review your fraud rules and results and make recommendations for improvement.

The Case for Personalized Fraud Rule Reviews

Personalized fraud rule reviews and recommendations are particularly effective in combatting new or evolving fraud patterns, which can be a daunting task – especially for community banks and credit unions, which are often more resource constrained than big retail banks. In addition to helping financial institutions combat emerging threats, the advantages of having a fraud expert help with fraud include:

  • Reduced false positives and increased accuracy: False positives occur when legitimate transactions are flagged as fraudulent, the impact of which ranges from eroding customer and member trust to actual losses from reduced transaction volume, and costs associated with correcting individual issues
  • Improved customer experience: Accurate fraud detection and prevention strategies reduce friction in customer journey and increase customer confidence, both of which positively impact customer and member loyalty.
  • Loss Prevention: it goes without saying that successful fraud attempts have direct and indirect financial consequences. Generally speaking, the more proactive banks and credit unions are, the less cost they will incur, and adding regular expert-led rule reviews is an excellent way to ensure that fraud teams keep their eyes on the ball.
  • Efficient resource allocation: Bringing a niche specialist like a fraud rules expert frees up internal fraud teams to manage high-level fraud prevention activities and respond more rapidly to active threats.

Implementing Personalized Fraud Rule Reviews

Rules and Recommendations consultants are typically easily integrated into community banks and credit union fraud operations. Getting started typically involves familiarizing the analyst or consultant with systems, processes, rules, and goals and establishing a schedule for meeting to review findings and recommendations, as well as discuss any emerging threats.

As specialists in fraud solutions for community banks and credit unions, REDi’s experts are uniquely qualified to address the challenges and opportunities unique to smaller financial institutions, and we would be happy to discuss with you how we have helped others, and what we can do for you.

Join the REDi Fraud Forum