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April 14, 2023 - Greg Oprendek

5 Signs It’s Time for a New Fraud Solution

Change isn’t ever easy. But, as GE’s most famous CEO Jack Welch said, when it comes to making the best decision for your business, “Change before you have to.”

That statement rings especially true when it comes to fraud detection and prevention. The world of fraud is evolving rapidly, as are the expectations of customers. You need to offer a fast, convenient, and smooth experience for users while at the same time finding fraud quickly and keeping disruptions to a minimum. That isn’t easy—or really even possible—if your fraud solution isn’t up to par with the best available tools on the market.

To help you decide if it’s time for a fraud prevention facelift, here are 5 signs that will tell you it’s time for a new fraud solution.

Sign #1 – You’re launching a new product or market your current solution can’t already handle

Launching a new product or entering a new market is thrilling. You’ve worked hard to create a new offering or approach that will surely net you more revenue and market share. Your team is just as excited as you are to roll out this new offering. Everything looks rosy!

But one bump lies on the road ahead—your fraud solution isn’t equipped for the new scenarios it will soon face. Perhaps it will take months to launch rules to handle new geographic trends. Maybe it will take years for models to be tuned to the levels required for safe growth. It might even be the case that your vendor has simply never handled a new use case and will have to build a bespoke solution.

While it’s tempting to tell your risk assessment team to go kick rocks, the smartest approach—and the best financial decision—is to make sure you have a fraud platform that’s prepared for your new venture. You can be sure fraudsters absolutely will be.

illustration of fraudsters stealing credit card info

Many product teams encounter some tension with their risk management counterparts when launching new ventures. They want to push for innovation and deploy differentiated product capabilities to ensure they gain market share. The risk team wants to ensure everything is safe before launching and has the—sometimes daunting—task of forecasting fraud in new markets.

Instead of looking at this tension as a source of delays for the product launch, successful firms often see it as a source for consensus that its time to explore new fraud vendors that can deliver protection from day one. The right solution, made to adapt to new use cases and markets with agility, will make a world of difference in your new product launch.

Let’s imagine you plan to launch a new mobile feature. There are obvious fraud risks that come with this. You might think your current solution can handle it as long as you add a few more scenarios to your rules-based monitoring. But is your team ready for the increase in manual reviews? Will your customers have the same smooth experience as you avoid increased false positives? If you aren’t careful, you could be burning more money in the long run patching holes while also suffering from worse customer retention.

Using an all-in-one platform that covers your new use cases or markets is most likely the best financial choice. You’ll gain the ability to detect all types of fraud, cut down on manual decisioning, and automate key monitoring like money laundering and fake accounts. Plus, these solutions accommodate agility and fast growth.

Sign #2 – You’re paying high professional service fees to manage your current solution

The average annual financial crime compliance operations costs for large (assets of $10B+) financial services firms in the U.S. is $20.5 million. That’s already a big chunk of change to be investing in a fraud solution. Depending on how your provider prices its fraud prevention solution, you might be paying per transaction, per user, per feature, or in tiers.

You can estimate paying around $50,000-$100,000 for the most minimal coverage and more than $300,000 for a platform equipped for multiple use cases. On top of that, you might be paying service fees for add-ons to cover new fraud use cases or, worse, paying for a managed service instead of a technology product.

High service fees are not a sign of a better fraud platform. It’s much better to have a fraud platform that your team can control. In DataVisor’s case, you get a no-code/low-code interface and completely flexible fraud strategies. With a truly flexible and extensible solution like this, citizen data scientists, business professionals, and analysts alike can create strategies, measure them, and tweak strategies to retain control.

Sign #3 – Your solution can’t cover real-time payment channels at scale

Real-time payments took over banking a few years ago, and they’re so common now your customers likely expect you’ll have some kind of real-time option for them by default. This might mean integrating support for an existing real-time solution or building one from scratch. Either way, it opens your institution up to a whole new can of fraud risk worms.

On top of real-time payments being one of the most popular targets for account and transaction fraud, supporting them requires a fast fraud detection solution that can work in real-time. Latency is critical, as delayed responses to fraud leave the perfect opening for fraudsters to get in and out before you even see them.

With less than 200ms latency and infinite scalability, DataVisor’s platform leads the market in solving for real-time at any scale. The solution empowers you to enable instant payments, onboarding, and decisions without compromising safety.

| See how a leading international financial institution saved $12 million in annual chargebacks thanks to 94% detection accuracy from their fraud platform. |

Sign #4 – You’re managing several fraud vendors for different use cases

Managing more than one vendor and many unintegrated signal providers not only spreads your fraud team thin, it inflates the cost of your solution overall. That’s cost in provider fees, set up, and employee hours for training. Plus, the added complexity and potential lack of transparency in managing multiple signal providers can increase both wasted time and fraud risk.

The better solution is to choose a provider that has proven expertise handling all the use cases your firm might face now and in the future and that can act as an orchestration hub for all signal providers. Choosing a solution like DataVisor’s gives you access to an extensive list of third-party integrations and signal partners, meaning your team can plug and play to them. With your third-party providers set up in one place and the powerful platform working to detect fraud for you, it’s the last fraud platform you’ll ever need.

Sign #5 – Your solution doesn’t consolidate fraud and AML/BSA

AML/BSA compliance can become a major headache if you aren’t consolidating it within your fraud platform. It’s a requirement to have, but some platforms don’t integrate this as well as others, leading to higher costs and increased risk of non-compliance.

Again, this is an area DataVisor’s all-in-one platform shines as the solution you need. It’s the one platform for all your security and risk management needs, including AML compliance and programs.

Make the move to a future-proof fraud platform

Whether you’re just weighing the cost of updating your old fraud platform or already know that you need a better solution, if even one of these signs applies to your platform then it’s time to make a change. Fraudsters’ methods only continue to get more sophisticated, and new AI technologies are empowering them to commit fraud at greater scales than ever before. At the same time, you need a platform that prioritizes customer experience and offers top-of-the-line detection speed. DataVisor is your answer—it’s future-proof, fast, equipped to handle all your fraud needs in one place, and made to scale rapidly with your business.

Get a customized demo on how DataVisor can fit into your fraud stack and replace your outdated solution by booking a time to chat with one of our experts.

about Greg Oprendek
Greg is a passionate digital marketer, avid basketball fan, aspiring fraud expert, and Content Marketing Manager at DataVisor.