Tipping Point - When Simplicity Is Not Enough In A Fraud System

For at least the last three decades, fraud monitoring of transactions and portfolios has been a cornerstone of protecting the brand, be it for scheme, bank or consumer reputation.

There have been a number of heavyduty products in the marketplace in that time that target specific monitoring needs. However financial institutions can meet regulatory requirements with an excel sheet – (the main card schemes mandate that their members should use a fraud system – but do not necessarily mandate what that system should have as functionality). So, what is the tipping point?

The main concept around card scheme monitoring is to be below a certain fraud threshold defined by the scheme; and if you are monitoring transactions in batch – whether you are using a excel report to detect transactions that are above thresholds or using a simple rule based system – a confirmed alert means that you can block the card and reissue, preventing future fraud in the compromised card.

Alternatively, a digital challenger bank for example may go down the road of developing their own tools and software. Being agile in nature as part of the general start up programme means that development changes can be implemented quickly to meet the needs – and these can sometimes be very advanced in the functionality they can perform. I have seen new start ups showcase technology that appears to be beyond the scope of the traditional market leaders in terms of look and feel – and general ease of use.