6 tips for building a successful fraud team

When moving your fraud prevention in-house, or even considering setting up a team for a new company, knowing what to expect can go a long way. But no matter how lean you want your fraud operations to be, it's critical to have a fraud team equipped with the knowledge and tools to protect your business.

Let's take a look at the Ravelin team's top tips for building a successful fraud prevention team.

1. Find the right place within your business

Fraud is a growing problem that touches the financial, operational and technological parts of your company.

Its actions are never confined to itself alone and impact your customer experience and conversion as well as the bottom line. Address this by considering the interfaces of the team and creating effective communication channels between the fraud team and the business.

2. Put people before tools

Hiring the right people is key to building a successful team. By focusing on people with analytical skills you can make sure your team figures out the specific fraud patterns that your company is facing.

While experience in fraud is helpful, some of the best fraud analysts came from backgrounds ranging from business to biology. The key is their ability to ask questions and answer them methodologically. Balance skills in the team by hiring people with backgrounds across domains, allows team members to learn from each other.

If you only hire people with similar skills and experience, you are only ever going to get the same solutions.

3. Ongoing training

Fraud methods are widely shared, new fraudsters join the flood every day, and new attack vectors are added daily.

Training is essential and on-going to keep your team ahead of the game. As new fraudsters learn trade secrets from their forums on the dark web, your analysts can be trained to understand fraudster behavior based on their actions.

Build an internal training program that includes fundamentals of payments systems, phone and internet comms, and solid overview on how fraudsters interact with your systems. Allow the team to professionally grow by encouraging them to routinely run internal training sessions, and also share findings across the team and company.

If you are finding that your current team is lacking the time for continuous upskilling and training, consider whether you are automating enough.

By relying too much on them for manual reviews, you are stopping them from developing their skills further and could even be hindering your company's growth. We've prepared a case study on automation here.

4. Use solutions that suit your needs

The tools that businesses used are often selected by trial and error. We've seen everything from the basic in-built functionality that their payment services provide to Excel sheets, text files and various database queries.

While those tools will take you some of the way to tackling fraud, providing the right set of advanced tools to the team dramatically improves their efficiency. It reduces the time they spend investigating each case and improve the accuracy by providing decision support information exactly where it’s needed. This translates to less fraud and less customer friction.

By focusing on these principles, you can find the optimal solution for your team. Monitoring suspicious accounts should be done automatically, without a the need to actively search for them. Blocking suspicious activity should be automatically and instantly. Repeated attempts of fraudsters to create more accounts should be blocked without further human involvement, as duplicate accounts will appear and you don’t want to create extra work for the team.

While a modern system function is fully automatic, you want the ability to change business flow based on risk scores. For instance, you may want to require more information or direct to 3D Secure challenges orders that receive high risk score. You also want to be able to recreate business policies as fraud rules to control which customers are blocked by your fraud solution. Your business requirements can change overnight and you don’t want to always rely on software to learn what you can easily tell it to do.

Even though you want to leave your analysts free from manually reviewing all orders, you do want to allow them to spot check, investigating a fraction of cases to keep the system in check and improve it.

You want a system that shows a prioritized list of candidates to investigate, reducing the time it takes to find interesting cases. You also want to enable exploration and search for patterns you see as interesting or high-risk, not limiting your search criteria to the list the vendor has pre-compiled for you.

5. Track the right metrics

Analytics are also important. When an analyst investigates a suspected fraud incident, you want your system to present all of the relevant information in a single page - you don’t want them to manage multiple notepads, excel sheets and various database queries to keep track of the relevant information. Choosing a solution with granular reporting and query tools will help with this.

After an analyst has spend time reviewing an account, you want to capture their decision so you can rank both their performance and the system’s performance, creating visibility and accountability with your team.

When setting the team's goals, it’s important to align their focus with the company’s goal. Measuring their capacity in terms of cases resolved is not sufficient, as it needs to take into account sales conversion, accuracy, time and the level of customer satisfaction.

By creating two benchmarks – number of manual reviews, accuracy of manual reviews – measurable improvements can be quantified, and each analyst can see where they need to improve. Analysts can then suggest improvements to the processes, and having a framework to evaluate the value of such improvements eases the implementation process.

6. Test, fine-tune and test again

While actual fraud levels may change depending on how hard you make it for the fraudsters as well as their motivation, you always want to stay ahead of them.

One way of doing this is by challenging your own system in a process often called red-teaming.

In this exercise, you a team member will be trying their best to commit fraud and the other team members will be trained to catch it. If does get caught by your system, it’s a great way to reevaluate your solution and find your own weak spots before someone else does.

Another way to keep up with developments is to ensure you are following fraud and abuse trends. At Ravelin, we frequently publish original research and other data that captures the latest in the world of fraud and payments.

You can read our Fraud Trends 2024 report here and sign up for Ravelin news below.