Why Report on Fraud and Abuse?
8 Nov 2018
You’ve got a team of analysts fighting fight fraud and abuse. You’re doing what you can to delight your customers and keep them safe. You seem to be doing everything right….but are you?
Without the right data, it’s impossible to know. To understand your business’ health, it’s vital to have accurate, comprehensive measurement. But many companies aren’t tracking fraud and team performance as effectively as they should.
The 2017 Merchant Risk Council (MRC) Global Fraud Survey found that 68% of MRC members rate improving fraud analytics as one of their top three priorities. Yet nearly four in 10 (38%) of organizations do not track any metrics beyond chargeback rate, according to the 2018 CNP Fraud Operations Study. Why report on fraud and abuse?
Fraud and abuse come with a unique brand of business costs and operational costs. Business costs include things like lost inventory, chargeback fees, and legitimate orders incorrectly blocked. Operational costs cover expenses such as employees hired to review orders, fraud tools, and internal resources devoted to maintaining legacy fraud prevention rules. To succeed and scale, it’s vital for companies to monitor their performance in both of these areas.
The problem, of course, is that merchants don’t always know what data to monitor or how to interpret the data they’ve collected. They also feel that creating and maintaining KPIs can be unnecessarily cumbersome. What they don’t know is that tracking and reporting on metrics can give you an edge over your competitors.
- Reporting gives you the full picture of how fraud is affecting your company. You’ll be alerted to potential problems, and be able to tie your strategic decisions to trends in the data.
- Measuring your team’s performance and the effectiveness of your business logic enables you to optimize operations, manage team resources, and build better rules. You can provide data-based justification for budget planning and hiring.
- Ultimately, you’ll be able to fight fraud better, making smarter data-driven decisions that keep you ahead of fraudsters and keep your customers happy.
Most businesses agree that measuring their fraud and abuse prevention efforts is important, but how they approach this goal may vary based on specific needs.
According to our research, these are some of the most common questions that fraud managers and executives are trying to answer about their business:
- How will I know when fraud is happening on my site?
- What types of fraud are we facing?
- How are these fraud trends changing over time?
- How effective are our rules?
- Are there opportunities to reduce manual review?
- How is my team performing in terms of speed and accuracy?
- How do I optimize operational efficiency?
- How do I best allocate budget and resources?
Ready to start answering those questions? Download The Definitive Guide to Reporting on Fraud and get started today!