Fraud is a serious issue that has unfortunately become commonplace in our consumer culture. Although fraud may be top of mind for us in the outbound communications industry, for the typical consumer it still may not be despite a number of helpful proactive communications solutions.
A friend of mine recently took a trip with their family to the Caribbean. When they checked into the hotel, they used a different credit card to cover incidental expenses than they used to book the trip. Almost immediately they received a text message on their mobile phone that alerted them of the suspicious transaction, authenticated their identity, and verified that the transaction was legitimate and not fraud. Impressed with this interaction, they are certainly a more loyal customer now after receiving that proactive communication.
Fraud notifications are a win-win for both the customer and financial institution. In our recent white paper, The State of Fraud – Using Proactive, Real-Time Interactive Notifications to Fight Fraud and Increase Customer Loyalty, based on a Javelin Research survey, we found that while financial institutions absorb most of the fraud costs and limit a customer’s exposure, they still experience significant customer churn as nearly 18 percent affected by fraud will switch to another provider.
Financial organizations looking to reduce their customer churn and financial risk are turning to fraud management solutions that feature proactive communications to:
- Reduce time to confirm fraud, lowering risk and total dollars lost
- Resolve fraud automatically via interactive self-service communications — freeing up agents to focus on higher priority tasks
- Reinforce cardholder relationships with timely and personal communications that build loyalty and minimize disruption in card spending
- Augment current contact information to in order to contact cardholders quickly and effectively, and
- Capture and communicate in the cardholders’ communications preferences to ensure higher response rates
The ability to use a outbound multi-channel solution is key for a successful fraud management solution. Let’s take my friend’s travel experience again – they were standing at a hotel desk in the Caribbean and received the proactive communication on their mobile phone. It is very likely they would not have received a call to their home number or checked their email. Instead they received a text message in real time and could authenticate and verify the expense immediately. If it had been fraudulent activity, they would also have benefited by knowing immediately while the exposure to the bank would have been minimized. By reaching the customer immediately, the bank reduced their own risk exposure and built customer loyalty.
For further reading into how technology helps defeat fraud, download our study with Javelin, The State of Fraud – Using Proactive, Real-Time Interactive Notifications to Fight Fraud and Increase Customer Loyalty.