Navigating Dispute Management: 3 Key Considerations for Streamlined Solutions

Dispute management is a critical aspect of financial services, both for identifying fraud and mitigating financial crimes. The benefits of effective dispute management include fraud prevention, minimizing friction with members, and reducing time and expenses. However, resolving disputes using a manual process is typically costly and complex.

Chargeback volumes are expected to surge to 337 million by 2026, a staggering 42% increase from 2023, according to a recent report from Mastercard. The costs associated with settling these transaction disputes are massive, costing billions each year, and the burden of debt recovery is often carried by the financial institution. The exact number of unauthorized transactions can fluctuates annually, but millions of unauthorized transactions occur each year, resulting in substantial financial losses for consumers and financial institutions.

By using automated dispute management, credit unions can improve processes to manage disputes effectively, without exhausting budget or resources.

When evaluating your current dispute management approach, there are three key considerations for automating the process without exhausting a credit union’s budget or resources: Streamlining dispute workflow with centralized management, improving productivity and maintaining regulatory compliance.

1. Streamlining Dispute Workflow with Centralized Management

Centralized management of dispute workflows is one of the most effective ways to enhance dispute management. This approach reduces the risk of defaults in disputed transactions and significantly cuts down resolution times.

Traditionally, addressing unauthorized transactions is a laborious task, requiring extensive documentation, initiating return requests, meticulous tracking, resolution and communication with stakeholders. These requirements not only consume valuable time but also pose a significant challenge to providing seamless member support.

If a credit union is currently using spreadsheets and other manual processes to manage disputes, swapping to a centralized system guarantees better tracking of disputes, ensuring that each case is handled efficiently and effectively.

By utilizing a unified platform, credit unions can manage and document all aspects of dispute resolution from a single point, making it easier to monitor progress and identify any bottlenecks that may arise. It also saves time and frees up human expertise to do higher level projects.

An example of how automation resolves cases quickly is through streamlined analysis and resolution for transactions of all types, including debit, wire, ATM, credit card and check transactions. By leveraging machine learning algorithms and advanced data analytics, automated systems can quickly identify patterns and anomalies that may indicate fraudulent activity.

These systems can automatically flag suspicious transactions for further review, reducing the time it takes to detect and respond to potential fraud. Additionally, automation can handle the extensive documentation required for each case, ensuring that all necessary information is collected and organized efficiently. This not only speeds up the resolution process but also enhances the accuracy and consistency of dispute management.

In addition, automated systems can integrate with existing financial platforms, providing real-time updates and seamless communication between different departments, which further expedites the resolution of disputes.

2. Improving Productivity

Manual data entry across multiple systems can lead to errors and decreased productivity. By automating dispute management, credit unions enhance efficiency and reduce human errors, which boosts overall productivity.

Automation can take over repetitive tasks, allowing staff to focus on more complex issues that require human intervention. This not only speeds up the dispute resolution process but also improves the accuracy of the data being processed.

Furthermore, automation tools can provide valuable insights and analytics, helping credit unions to identify trends and areas for improvement in their dispute management processes.

3. Maintaining Regulatory Compliance

Regulatory compliance is a critical aspect of dispute management for credit unions. The risks of non-compliance include significant penalties, reputational damage and the potential loss of trust from members.

Implementing automated dispute management systems can help credit unions to comply with regulations, mitigate risks and maintain the trust of members. An automated process also keeps the financial institution up to date with changing regulations and ensures that all processes are documented and auditable.

Building Member Satisfaction Through Effective Dispute Management

Effective dispute management is more than just a back-office operation – it’s a critical component in building and maintaining member trust and loyalty. When disputes are handled quickly and accurately, members will be more likely to feel valued. An efficient, automated dispute resolution process sends a clear message to members: Their financial well-being is a top priority. This can differentiate a credit union from its competitors, leading to higher member retention and satisfaction.

Choosing Between Building or Buying a Dispute Management System for Credit Unions

When ready to simplify and expedite the management of unauthorized transactions, credit unions face the dilemma of whether to build a dispute management system themselves or purchase an existing solution. Each approach comes with its own set of pros and cons.

Building an in-house system allows for complete customization to meet specific needs. However, this approach can be time-consuming and costly. It requires significant resources, both in terms of financial investment and technical expertise. Additionally, maintaining and updating the system to comply with evolving regulations can add further complexity and expense.

On the other hand, purchasing a pre-built solution can provide a faster and often more cost-effective way to enhance dispute management capabilities. These systems are designed by experts who understand the intricacies of financial regulations and the specific needs of credit unions. However, the key to a successful implementation lies in selecting the right provider.

When evaluating potential solutions, credit unions should look for providers with proven expertise in the credit union industry. It is important to choose fintechs that not only innovate but also prioritize compliance. A track record of successful implementations and the ability to offer a highly configurable system are also critical factors.

A well-chosen provider can offer a solution that streamlines dispute workflows, improves productivity and ensures regulatory compliance. With the right system in place, credit unions can manage unauthorized transactions more efficiently and enhance the overall member experience.

Reap the Benefits of Simplified Dispute Management

The improvements discussed above ensure efficient operations and regulatory compliance and lead to improved member satisfaction. In an era where chargeback volumes are expected to continue rising significantly, effective dispute management is more critical than ever. By adopting these strategies, credit unions can navigate the complexities of dispute management and achieve streamlined solutions that benefit both the institution and its members.

With a unified dispute management platform, credit unions can manage cases effortlessly and accurately. Every step of the process is meticulously completed, including posting and reversing chargebacks to the core. This minimizes the risk of overlooking critical details and allows the cases to be quickly resolved.

Unauthorized transactions can be complex to manage, but with the right dispute management platform, credit unions can navigate this challenge effectively.

Jeff Harper is Chief Growth Officer for FIntegrate Technology, a Birmingham, Ala.-based provider of loan portfolio tracking and collection recovery software for financial institutions.