The massive increase in compromised data over the last several years impacts
all parties involved in the process – including consumers, merchants,
and the financial institutions that issued the credit or debit card. Financial
institutions are impacted in the form of fraud losses, increased operational
expense associated with managing the fraud increase and reputational damage.
However, with the appropriate operational risk controls and processes in
place, we have found that organizations are able to effectively manage
this risk. Upon a data breach becoming public, financial institutions
are often the first point of contact from the customer. Being prepared
to handle the increased call center volume and respond appropriately and
confidently to customer questions about the breach are essential for managing
reputation. For large breaches, proactive customer outreach can help institutions
control the messaging and restore confidence among their customers.
Fraud strategy teams must also react swiftly to effectively manage risk
that may stem from a significant breach event. By immediately analyzing
recent claims to identify related claims (which may include looking across
products), organizations can quickly identify populations that need to
be monitored or that need to be closed and re-issued. A swift reaction
to higher than normal fraud levels can enable remediation efforts to carefully
balance customer experience and fraud losses.
The items highlighted above are just a few examples of topics that are
covered in depth in the white paper titled,
Combating Fraud and Data Breaches: End-to-End Strategic Management Insights. Other topics that are covered in detail include consumer and merchant
impacts and mitigation strategies, and how financial institutions can
detect or prevent fraud prior to becoming aware of a breach event by implementing
effective strategies, enabling strong fraud servicing and claims operations
and robust MIS and reporting.
Download the full white paper to read more.