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3 Elements of a Proactive Card-Monitoring Program

  • by Computer Services, Inc.
  • Oct 20, 2016

Managing card fraud is a high-stakes game for any financial institution. Case in point: Martinsville, Indiana’s Home Bank. Like many institutions, the bank was spending significant time mitigating card fraud and managing fraud resolution. And despite using a card-mitigation service, the bank was struggling to identify fraud trends and researching transactions became very difficult.

That’s when Home Bank selected a new technology partner and adopted a proactive approach to card monitoring, which resulted in fraud losses 65 percent lower than the industry average*.

Card-Fraud Strategies to Follow

Every bank has to make card fraud a top priority. For Home Bank, they enhanced their ability to mitigate fraud and reduce financial losses by switching to a 24/7 card-monitoring service and implementing these three elements into the bank’s fraud-mitigation program:

  1. Real-Time Denials

    An essential part of Home Bank’s strategy is using real-time denials to stop fraud at the point-of-sale. They attribute real-time denials with helping the bank identify common points of compromise and creating rules that minimize fraud damages. In fact, the bank’s loss-per-card is 59 percent lower than the industry average*.

  2. Proactive Alerts

    Home Bank’s new card processing service monitors debit card transactions and studies where fraud trends are occurring to help prevent fraudulent activity. The service sends proactive alerts to the bank’s team and to its customers when customer cards are being restricted or suspicious transactions occur. They then create rules that help prevent future events. The strategy is working—Home Bank decreased its actual fraud losses by 7 percent in 2015 using proactive risk alerts*.

  3. Dispute Resolution Process
  4. Should card fraud occur, Home Bank has developed a dispute resolution plan that incorporates requirements from both Reg E and MasterCard, and allows it to put into practice the requirement that is most beneficial to the customer.

Like any financial institution, Home Bank takes card-fraud prevention seriously. And by creating a proactive strategy for mitigating card fraud, incorporating real-time denials and proactive risk alerts, the bank not only helps prevent fraud from occurring, but also provides higher levels of customer support and satisfaction.

 

*Statistics based on an average fraud rate of 12 basis points, which is taken from information from the Federal Reserve, MasterCard and Visa.