5 tips for building a successful fraud team

5 tips for building a successful fraud team

Payment fraud has been with us since the beginning of ecommerce and unfortunately, there are no signs of this type of fraud slowing down anytime soon. Within the recent years, fraud has evolved to be a complex and costly problem for most of the online businesses. In order to protect their revenue, many online merchants now need to create in-house fraud teams to handle the fraud threat. With the scale and variety of fraud evolving, what is needed to build an effective fraud team? Ereli Eran, a data scientist and security expert at Ravelin, gives his tips.

Make sure the team is in the right place within the business

Fraud has grown to be a problem that affects companies across multiple departments from finance to operations. Fraudulent actions are not only limited to individual cases but together they can significantly impact the whole customer experience, conversion and bottom line. Creating effective communication and collaboration ways between the fraud team and the rest of the business becomes crucial in the fight against fraud.

Get people from different backgrounds

Getting the right people on board is key to building a successful fraud team. In order to understand the specific fraud patterns facing the business, the focus should be on people with strong analytical skills. Experience in fraud is helpful but strong talent can come from various backgrounds from business to biology. It all boils down to asking questions and answering them methodologically. Hiring people with contrasting skills and experience offers new viewpoints and solutions, allowing the team members to learn from each other.

Provide internal training

With the ever changing nature of fraud, training is essential in order to keep the fraud team ahead of the game. As new fraudsters learn fraud tricks from the forums on the dark web, fraud analysts can be trained to understand fraudster behaviour based on their specific actions. It is important to build an internal training programme including fundamentals of payment systems, phone and internet communication and to encourage the team to run routine training sessions.

Measuring the right things when assessing efficiency

When assessing the efficiency of the fraud team, it is important to integrate the team’s focus with company goals. Measuring only the cases resolved is not a sufficient variable as sales conversion, accuracy, time and customer satisfaction need to be taken into account too. Measurable improvements can be quantified by creating two benchmarks; reviews numbers and reviews correctness. Having a framework that evaluates the value of suggested improvements eases the improvement process.

Challenge and test yourself

A successful fraud team is always one step ahead of fraudsters. Red-teaming, a process where one of the team members tries to commit fraud while others are trained to catch it helps to challenge your own system. This makes it possible to find weaknesses and blind spots before someone else does it for you.