Fraud prevention is truly a fascinating world. Every day, I have the opportunity to help companies harness new technology to fight back against some of the sharpest criminal minds.
Addressing global challenges is not new to me, but the wide variation of fraud issues in each market is something that never ceases to amaze me.
My career has spanned vastly different industries. I’ve learned some valuable lessons and came to some interesting conclusions. Sharing them will hopefully highlight the importance of a few key issues in the fraud prevention industry.
The big issue: Overcorrection
My first lesson in overcorrection came when I was in charge of an important project, working with the risk management department at a major oil company.
Be it in an oil rig or a ship on the open ocean, there are certain operational risks that are assumed. To expand toward new horizons, you have to assume additional risks. This is very similar to companies attempting to expand their online presence, which I will discuss later in this piece.
In my role, I was tasked with reducing health and security related risks that could negatively impact operations. On an oil rig, workers are isolated. It’s a big challenge to keep them healthy and productive in such unnatural and harsh conditions.
As a representative for a major global healthcare technology company, I was excited to bring my expertise to bear. We started by revising and tightening pre-employment physicals. I was certain this approach would reduce overall risk and costs of the operation.
After a few months, I presented the results of my plan. Despite all the positive results, I hadn’t planned for one thing: overcorrection. While our stricter pre-employment physical standards helped mitigate some very risky health factors, they also caused the company to experience a critical shortage of qualified workers. The results not only increased costs, but crews ran the risk of working longer due to the lack of relief labor.
How balance saves the day
In business, just like in life, you have to realize that things just happen. It’s simply not possible to correct for every risk element that exists. I’ve found the same to be true in my current industry, fraud prevention.
In this scenario, what ultimately saved the day was applying technology in a way that sought balance. Not control.
We reverted back to the existing pre-employment standards. But this time, we utilized telemedicine technology to provide remote care and mitigate instances where health issues or accidents happen on board. There’s parallels to this approach in fraud prevention.
As companies look to expand online market share, it’s only natural that fraud will rise. You can try to control that fraud risk by tightening up the checkout process and requiring customers to submit additional forms of verification.
But in this one click world, customer experience matters. If your controls make it difficult for customers to get what they want, you will lose business to competitors who provide a better experience. At the same time, you can’t drop all of your controls; it won’t take long for someone to exploit that, and soon, you’ll be facing off against organized fraud rings.
To grow with confidence, companies should embrace new technologies that work to achieve the balance between stopping fraud and approving customers. This reality is what underpins our approach at Emailage. Our team works very hard to ensure this balance is represented in our product and how our customer use it.
Even though I’ve changed industries and learned new lessons in the incredible world of fraud, my role remains the same. I help companies companies to grow by balancing risks, rather than working on entirely eliminating them. Stopping a fraudster prevents a one-time loss, but every time a good customer is blocked, lifetime value is on the line.
I’m proud to work alongside the team at Emailage. It’s very exciting to see the fusion of technology and industry knowledge put into action to help companies win more business.