Financial institutions face a growing wave of fraud
by John Winstel
A growing wave of fraudsters is targeting the financial services sector. The industry has suffered 75 breaches year to date through November 22, 2017, with a total of 2.9 million customer records compromised. Today, card breaches are the number one source of fraud in financial services. According to an October 2016 Gallup poll, 27 percent of U.S. adults say they were affected by stolen credit card information over the prior twelve-month period, an increase of 22 percent over the same period ending in October 2015.
Financial institutions have access to several effective tools to combat this rising tide of fraud. One solution is to choose the right card processor.
Above the surface, most card processing vendors seem much the same. But dive down a few feet, and stark differences begin to appear. Ask yourself the following questions to evaluate the effectiveness of your current processing partner:
- Has your vendor battened down the hatches? Leading processors take a multi-pronged approach toward fraud mitigation, by focusing on People, Process, and Technology. The best firms employ the most advanced tools, such as predictive analytics, to detect fraud quickly and reliably.
- Does your processor have an eye on the horizon? The payments seascape is undergoing tectonic upheaval, reflecting technological breakthroughs and a shift in cardholder preferences toward more flexibility and personalization. Is your vendor keeping up with the latest in person-to-person (P2P) payments, mobile wallets, and EMV chip cards?
- Does your ship have too many sailors? If you use multiple vendors to provide credit, debit, and ATM services to your cardholders, it’s time to look at consolidating these relationships. By contracting with a single vendor with expertise across all major payments platforms, banks and credit unions have realized significant cost savings, along with fraud loss reductions of 50 percent or greater.
Your card processor serves as a critical lifeboat in today’s raging ocean of fraud. Choose your raft wisely.