Be Sure to Calculate the Full ROI on Improved Fraud Prevention as you Plan your 2016 Budget
As you enter the 2016 budgeting season, you may be considering asking for improved fraud prevention. Many of the financial institutions we talk with are doing just this, especially in light of increased risk from the vast amount of data in fraudsters’ hands, the proven ineffectiveness of authentication, and the impending availability of Same Day ACH that will further increase fraud risk.
However, many of the FIs we talk with also make the same mistake when building their case for investing in improving their ability to mitigate fraud risk – they limit their estimated return to expected decreases in fraud losses. This is important, but it significantly undervalues what improved fraud prevention will deliver to your institution.
As you plan your budget for 2016, we encourage you to consider the strategic, business benefits of mitigating fraud risk, including:
- Adding online and mobile products and improving service levels, which can improve competitiveness as well as generate added revenue
- Winning new customers by offering faster payment processing, higher limits, and advanced payment services such as online bill pay and P2P.
- Improving operational efficiency by automatically releasing low-risk wire and ACH payments, minimizing false positives, speeding investigations, and eliminating the need to write and maintain rules
- Building client loyalty by taking responsibility for securing their assets and proactively alerting them to suspicious account activity
- Reducing the full cost of fraud that includes the nominal loss plus legal costs, time spent on investigations, damaged reputation, and customer churn
- Enhancing compliance with FFIEC Guidance that explicitly calls for using behavior to detect anomalies in banking activity.
If you’re committed to improving fraud prevention, please request a demo from a Guardian associate.