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Fraudulent activity is more prevalent than ever. Last year, an estimated $1.59 billion was lost to bank transfer or payment fraud in the US, according to Statistia and £1.2 billion in the UK, according to UK Finance.
This number has consistently been increasing over the past decade, and shows no sign of slowing down as electronic payments continue to grow as a preferred choice of payment. And as these payments increase, the tactics of cybercriminals have been evolving to target unsuspecting individuals and businesses.
A higher volume of fraud inevitably leads to a higher number of fraud claims from customers as they look to recover their losses. Banks need to find ways to effectively manage any claims of fraud that occur over Electronic Funds Transfers (EFT) via debit cards or credit cards to both appease customers and to keep their own costs down.
If customers fall victim to fraud and their banks are unable to compensate them in a timely and effective way, they are likely to take their business elsewhere. But banks should see this unfortunate situation as an opportunity to prove themselves. A study by PWC found that providing immediate relief when fraud occurs increases loyalty by 26%.
It’s a time sensitive matter, not only in terms of customer expectations, but also legally. For instance, banks in the US need to be mindful of Regulation E, which outlines that banks have just 10 days to investigate a reported EFT error in debit cards. Although, this is extended to 45 business days so long as the bank provisionally credits the customer’s account with the reportedly missing funds as they continue investigation.
Within these tight deadlines, there are multiple steps that need to be navigated to ensure the claim is accurate and regulatory requirements are met.
Using process automation, the entire claims handling process can be mapped out in automated workflows. From the initial receival of the claim, through to the investigation and decision making and ultimately resolution, automated workflows ensure that claims progress efficiently and consistently. Of course, there are some instances where human intervention will be required, but ultimately the majority of the process can become hands-off.
Here’s how process automation supports fraud claims at every step of the process:
Accelerate Claim Intake: Using a low-code automation platform, banks can design online forms that customers can use to kick-start the claim submission process. The forms help to capture the necessary information with automated business rules ensuring that there are no errors or missing elements before the information is submitted to the claims team. This self-service step reduces the pressure on call centers, which both saves costs for the banks and provides a better customer experience as they don’t have to spend time waiting to speak to an advisor.
Automated Data Ingestion: Automatically uploading the information received by customers is a huge benefit to banks, as employees don’t have to spend time manually inputting information, which is not only slow but error-prone. Instead, staff can focus on the customer rather than uploading information. This removes one of the biggest time delays at the beginning of the process and ensures that only valid and complete claims are passed on to the next phase of the process.
Claims Triage: Once claims have been submitted, they can automatically be categorized and prioritized based on criteria defined by the bank. For example, straightforward claims can proceed straight through to processing of payments, with the case management handled by the automation platform. Whereas any high risk or suspicious claims that do not pass the threshold test can be handed off to staff for judgement-based work.
Task Assignment: For claims that don’t reach the automation threshold, they can automatically be routed to appropriate teams based on the nature of the claim. They will receive automated alerts in the platform to avoid bottlenecks in the process.
Intelligent Fraud Decisioning: Once the claim has been routed to the appropriate team, automated business rules can present relevant data and information to claim handlers to help them determine the validity of the claim. In some instances, the data may be sufficient for the decision itself to be automated. This step in the process can be integrated with AI and machine learning tools to help automate more decisions going forward.
Centralized Document Management: Fraud handling comes with a plethora of documents and information that need to be reviewed, including account statements, transaction records and identity documents. These may all be stored on disparate systems and take time to gather and review. An automation platform can act as a central repository for all related information by integrating with systems across the bank, making it easier to access and retrieve information to support the claim.
Automated Customer Communication: Customers expect to be kept in the loop and know how their claim is progressing. As the claim passes through the mapped out processes, email or text notifications can be automatically sent once the claim has progressed onto the next step. So, customers receive real-time updates on approval, denials or if any additional information is required to keep the process moving and avoid bottlenecks.
Claim Resolution: The ultimate aim of the fraud claims process, automation can assist with the resolution of claims once all the aforementioned tasks have been completed. Automation can help return funds to customers by generating payment instructions and making payments to the customer accounts, or if the claim is being handled by staff, it can instruct them to initiate the recovery process.
In addition to providing customers with an efficient service when they have been a victim of fraud, banks also need to ensure that they don’t fall foul of fraudulent claims themselves.
Fraud Detection: The last thing your bank needs is to pay out on claims that are actually fraudulent activities. Integrate your platform with fraud detection tools and databases to automatically check claim details against known fraud patterns or previous fraudulent activities. Suspicious claims can then be flagged for further investigation.
Reporting and Analytics: An added benefit of mapping out your process for automation is that the platform can generate reports and analytics on the process. Reports on claims data will help you to identify trends, patterns, and areas of vulnerability to fraud. This information can then be used going forward to refine fraud prevention strategies in the hopes that less customers will have to submit fraud claims in the first place.
By leveraging a process automation platform, you can manage your fraud claims more efficiently and effectively. The benefits are plain to see, helping to improve productivity of your staff and speed up the process by automating many of the manual steps involved, which ultimately improves customer satisfaction.
Low-code automation platforms can be used to enhance a plethora of different activities across your bank, not just fraud claims. Find out more about how Bizagi’s low-code automation platform can drive efficiencies across your financial institution.
