Humanity Remains an Essential Element to Fighting Fraud

Most of us love technology. Or more to the point, we love the speed, convenience and ease its various forms bring to our days. But when things go wrong with that technology, we expect a human to be there to smooth things over. It’s why retailers have so smartly situated designated employees near the “self” checkout stations. (I’ve never seen a busier employee than the self-checkout supervisor at my local grocery.)

Payments are no different. Members love the digital glow their credit and debit cards have come into over the last decade. They enjoy the seamless connections between their plastics and their watches, the no-questions-asked “buy now” ease of online shopping, and of course, the ability to send money to virtually anyone, virtually anywhere in seconds.

But when things go wrong with payments technology, they expect a human to be there.

Fraud is usually the root cause of things going wrong with payments. Whether suspected or legitimate, fraud mitigation efforts can be snags to otherwise smooth transactions.

Unsettling for some and really scary for others, fraud events are negative experiences no matter which way you slice them. Humans comprise the make-it-or-break-it layer capable of turning those negative experiences into positive engagements. Credit union employees do this by helping members understand – and in best case scenarios, even appreciate – a decline, an account hold or a card reissue.

Frontline fraud fighters already have the humanity necessary to turn frowns upside down. Layer three other elements onto that humanity, and credit unions are in an excellent position to wow members even during frustrating moments.

Transaction-Level Intelligence

For years, a service representative could see a fraud score, but would be unable to share with the member in a meaningful way why a particular transaction was turned down or how another could be prevented in the future. This only added fuel to the frustration … on both ends of the call.

Today’s data-rich fraud detection systems are much more sophisticated and can provide transaction-level intelligence to frontline staff. The machine learning Cooper Fraud Score from Co-op Solutions, for instance, includes a reason code alongside the fraud score on a contact center rep’s screen. Credit unions that deploy the technology empower their representatives to share more detailed explanations with more members. And, the credit union’s fraud team has access to data insights that prescribe necessary adjustments to fraud strategies, reducing member impact.

Wider View of Fraud Trends

Being able to reassure a member that a particular fraud event was perpetrated in a particular payment channel or geography is priceless. Not only can this information help members feel less isolated in an often-stressful situation, but it can also bolster members’ trust in their credit unions’ fraud capabilities.

Credit unions access fraud trend insights in several ways. One is a daily review of the collaborative resources available to all credit unions through their network relationships.

Another is through daily contact with outside fraud experts. Fraud professionals that work within payment processors, for instance, have an expansive enough view to see fraud trends as they appear. More importantly, they can take specific action to stop or at least reduce the impact to their clients.

This is one of the ways cooperatives like Red Rocks Credit Union ($354 million, Littleton, Colo.) are achieving dramatic reductions in fraud losses. In 2020, Red Rocks closed the year at just 26% of its expected-loss budget, enabling the fraud team to cut its 2021 expected-loss budget by 50%. Because the Red Rocks fraud team is in consistent communication with Co-op’s fraud specialists, the credit union regularly has new fraud rules in place the same day the request is made.

Cross-Functional Collaboration

A third way to boost the human fraud-fighting capabilities of a credit union team is to encourage stronger collaboration between colleagues. It’s not uncommon for fraud teams to operate completely independently of disputes teams, for instance. Bringing just those two teams under a single umbrella can work wonders in terms of protecting credit unions and improving member experiences.

It worked for the $3.4 billion, Boulder, Colo.-based Elevations Credit Union. After uniting the two departments, it was easier to see where fraud was originating and what disputes looked like so the unified team could address losses from both sides. Team members began to see in real time the transactions getting by existing fraud rules. They can now adjust on the fly. Similarly, the disputes team understands better how they fit into the overall fraud-fighting strategy.

Employee satisfaction goes through the roof in collaborative environments. Especially in fraud-fighting, team members who get to see the complete life cycle of a member’s payment experience can’t help but feel more engaged and relied upon. As Renee Hunsader, vice president, payments and controls for Elevations once shared with us, “Our team members are not just analyzing transactions. They are fraud investigators, fully involved in the mission and making a difference every day for members.”

Even as fraud-fighting technology becomes supremely intelligent, humans persist as an undeniable means for detecting and stopping fraud. Perhaps more importantly, however, people keep the increasingly digital fraud-mitigation experience personal during a time when the human touch is more sought after than ever.

Patrice Alexander-Lee is a product management director for Co-op Solutions in Rancho Cucamonga, Calif.