Fraud analysts are akin to researchers
Fraud analysts are akin to researchers. Understanding and mitigating fraud involves incredible nuance and tenacity. Everyone in product development should be aware of fraud issues and the associated complexity. Fraud impacts both the bottom line and customer experience, and the advent of AI brings even more multiplicity. Here are some key points to understanding and combating online fraud:
Evolving Tactics: Bad actors (people who commit fraud) constantly adapt their methods.
Lack of Consensus: There's no shared definition of fraud across financial institutions, card monitoring programs, or payment gateways.
Unique Knowledge: Each organization has its own customer insights, industry variables, risk thresholds, and payment models.
False Positives: These are common in fraud detection.
Variety of Fraud Types: Includes friendly fraud, account takeovers (ATO), identity theft, disputes, etc.
Legitimate Disputes: Some disputes stem from genuine customer service issues.
Aggregated Databases: Savvy organizations aggregate customer knowledge and payment processor data.
Local Variations: Fraud tactics and mitigation can vary by locality.
Product Type: Prevention strategies differ for digital (immediate availability) versus physical (requires shipping) goods.
Design Challenges: Creating effective fraud monitoring programs and visualizing fraud data is complex.
Fraud analysts are akin to researchers. They gather evidence to inform hypotheses and test mitigation strategies. Just as user researchers explore user needs and behaviors to improve experiences, fraud analysts continuously adapt to the evolving landscape of fraud.
I dread the day when I might receive a call or video from what appears to be my daughter, with her exact voice and appearance, claiming to be in trouble—only to discover it's a sophisticated scam. Unfortunately, this type of fraud is happening now.
Be careful out there! And let your fraud analyst know how much you appreciate them. Constantly trying to identify and mitigate fraud is incredibly difficult work!
