Many organisations still find themselves bogged down by legacy systems, not only making it easier for fraudsters to manipulate them but hindering the extent to which they can manage fraud cases. Disparate systems, manual processes and a lack of a 360-degree customer view all contribute to minimising security and the effectiveness of fraud management.

Proactivity is crucial in a fraud management setting, and this is not always achievable with legacy systems. To move forward in a fraud journey, organisations must first evaluate their current systems and processes in place to handle fraudulent activity. By carrying out a current state assessment, financial institutions can:

• Understand the existing legacy systems, their capabilities and limitations
• Evaluate the technology stack, data architecture and integration points
• Identify the key components that contribute to fraud management.

In identifying potential gaps in existing systems, financial institutions can assess the ability to adapt to evolving fraud patterns, analyse big data efficiently and integrate with modern technologies. In a similar vein, this allows them to benchmark against industry practices and current legislation – we’ve outlined just how crucial this is in our previous article, Fraud24: The fraud landscape in 2024. In considering these, organisations must also assess the following to allow them to build a business case and transition plan to migrate to more secure and up-to-date cloud-based systems:

• Scalability and flexibility: Do the current systems accommodate for growth in transaction volumes and evolving fraud threats?
• Data quality and integration: Do you currently hold real-time reporting capabilities? Do your systems support integration with internal and external data sources?
• Analytics and machine learning capabilities: Do you have access to advanced analytics and machine learning algorithms to detect indicative fraud patterns?
• Customer experience: How do these systems impact customer experience metrics?

Once these aspects have been evaluated, the financial institution can develop a phased roadmap for transitioning to the new fraud management strategy. By this point, they can prioritise areas for improvement – considering dependencies and potential impacts on ongoing operations. Furthermore, investment should be directed towards employee training and change management to ensure a smooth transition. Let’s look at how this can evolve…

To ensure employees are onboard with the new fraud management strategy, financial institutions should aim to create a culture of vigilance, embedding this into their mission, vision and values. From here, organisations can set up fraud management objectives. These could include reducing fraud incidents, improving detection accuracy, enhancing customer experience and ensuring compliance with regulatory requirements.

While technology plays a pivotal role in fraud management, an organisation’s human capital is equally critical. Creating a company culture rooted in vigilance, training and compliance is essential to building a resilient defence against fraud.

Employee training programs should be comprehensive and engaging, covering the latest fraud techniques, regulatory updates and best practices for maintaining security. Regular training sessions ensure that employees are well-informed about potential threats and are equipped to recognise and report suspicious activities promptly.

In addition to training, fostering a culture of compliance is vital. Establishing clear policies and procedures for handling sensitive information, conducting regular audits and enforcing consequences for non-compliance contribute to a robust internal control environment.

Employee awareness and commitment to fraud prevention should be ingrained in the organisational culture. By promoting a collective responsibility towards security, financial institutions can create an environment where every team member actively contributes to the defence against fraud.

With regulatory bodies increasingly focusing on financial fraud, for example the upcoming APP fraud requirements, organisations without a comprehensive fraud strategy will come into the firing line. As such, scrutiny of financial fraud necessitates staying ahead of compliance requirements.

Your organisation’s technology must not only meet but also set the standard for best practices in fraud management to maintain customer satisfaction and outshine the competition. How can you do this?

Microsoft Dynamics 365 and Power Apps’ intuitive app development environment empowers financial institutions to rapidly develop tools to meet regulatory changes, while process flows and automation allow you to ensure that regulation is met as simply as possible.

A huge distraction in hindering fraud detection is manual tasks; where investigator attention lies rather than critical fraud analysis. Rest assured, we’re looking at how we can shift this…

Workflow automation is a game-changer in most circumstances, but especially in fraud detection and management. Reducing the risk of human error, automation through Power Automate ensures consistency and efficiency in fraud management. By using Power Apps, we can create streamlined business process flows to ensure that all input data is correct, and the cases are dealt with correctly – using guided processes.

Robotic Process Automation (RPA – employed by Power Automate) tackles this by monitoring transactions and detecting potential fraudulent activities in real-time, safeguarding against threats and protecting customers from fraudulent transactions. As a starting point in fraud management, automation can be used to handle low-value fraud cases instantly without any user intervention – driving greater customer satisfaction and allowing fraud management teams to allocate time and energy to higher risk fraud alerts.

One seemingly small but hugely impactful aspect of this is email inbox automation. In a fraud context, this refers to the fraud alerts a financial institution receives from various sources, through multiple email inboxes – for example, inboxes for fraud reports from customers, the police and the financial ombudsman. Manually reviewing each case on a timely basis is difficult, especially with fraud cases on the rise.

By employing machine learning, organisations can use AI and real-time monitoring to categorise the level of threat from each email and its source by clearly defining what constitutes a potential fraud report or indicator. This could include specific keywords, phrases or patterns that may suggest fraudulent activity. To enhance this fraud management tool, financial institutions should utilise threat intelligence feeds to stay on top of current fraud trends, tactics and indicators to integrate with fraud alert automation.

From here, email filtering rules can be configured to automatically identify and flag emails that match these fraud indicators. Financial institutions should have dedicated fraud management teams in tandem with IT and cybersecurity teams – by using capabilities available in Dynamics Customer Services and the Power Platform, the appropriate internal Fraud teams are automatically alerted to these fraud cases and can start triaging them immediately. Clearly defined escalation processes should be in place for handling identified fraud reports to determine who should be notified, what actions should be taken and how quickly a response should occur.

Fraud management teams should periodically review and update the email filtering rules based on evolving fraud patterns and threats. Regularly adapting to new tactics used by fraudsters helps maintain the effectiveness of the automated alert system and minimises the risk of damaging customer trust and fines for poor fraud management.

When tasked with handling a fraud case, the customer experience during the process cannot be overlooked. Fraud handling and customer experience are intertwined, and even if the case is technically handled with the utmost precision, if the customer does not feel that they have been communicated with effectively, organisations risk permanently damaging the relationship.

When managing a fraud case, financial institutions should strive to keep the customer well-informed on how they’re tackling the case without being obtrusive. This could be through an automated workflow to notify the customer at each stage of the fraud management process. These should reassure the customer that their accounts and transactions are being handled with the utmost sensitivity and additional security measures.

So, how can financial institutions offer exceptional customer service when faced with fraud? Microsoft’s Digital Contact Center Platform is a comprehensive, flexible customer case solution designed to deliver seamless customer journeys. With the Microsoft Digital Contact Center Platform, contact centre services are equipped with modern tools to engage customers across voice, video, SMS, chatbots and other digital engagement channels.

The solution is powered by Microsoft Dynamics 365, Microsoft Teams and Microsoft Power Platform, delivering truly digital customer service. The platform delivers best-in-class AI for contact centers that powers an enhanced customer self-service, better agent experiences, fraud prevention and business process automation. By employing intelligent routing capabilities, the Digital Contact Center Platform uses AI to help better route service requests from all channels. The platform enables your contact centre services to automatically assign incoming cases to the best-suited available agent or team, helping to reduce time to resolution, improve agent efficiency and improve customer satisfaction.

As the new APP fraud metrics come into play, this unified platform modernises case management and resolution to drive faster, more effective results and improve customer service scores. To learn more about the Microsoft Digital Contact Center Platform, you can watch our webinar in collaboration with Microsoft here.

A multi-faceted approach to fraud management is essential as cyber-crime and fraud threats evolve. Our final instalment in our Fraud24 series delves into how your organisation can approach its fraud prevention strategy using secure, cutting-edge Microsoft technology – you can access it here.

As a leading Microsoft Partner and a member of Microsoft’s Inner Circle for the fifth year running, our Business Applications division, Telefónica Tech brings a wealth of experience in creating secure, efficient customer experiences in the Financial Services industry.

Our team of experts is dedicated to understanding the unique challenges and needs of your organisation. We provide tailored solutions that integrate seamlessly with your existing systems and processes and our relationship with our clients extends beyond implementation. We provide continuous support and insights, ensuring that your systems evolve with your organisation and industry. Get in touch today for more information, and stay tuned for our next instalment in our Fraud24 series.