Ken Elefant over at VentureBeat makes some interesting points about credit fraud. Yes, it costs $49.3bn and $6,383 average cost per customer. But most of the “solutions” are based on data analytics and data aggregation.

The solutions they offer are typically client-server based, requiring months or even years of installation and training

. And what are banks doing according to Ken?

The reality is that banks have a hard time telling if the individual in question was a fraudster or simply someone who wouldn’t or couldn’t pay their bills. It takes work to figure it out, with the effort traditionally performed by fraud analysts working the phones to try to solve it. It’s a costly approach that hasn’t scaled well as identity fraud losses have risen in recent years.

As is the way with Blog conversations, one of the comments to that VentureBeat post is very interesting. A guy called Tom Fragala of www.myTrustOn.com quotes a Javelin study on customer attitudes to Fraud, and guess what, the customer sees it as their problem! In my books this means that if companies give the customer the option of adopting a fraud prevention option, they will usually buy into it. With nearly 100% of consumers carrying mobile phones, surely their is a process that can be deployed that could call a customer to ask them to validate a transaction? I don’t think I would be giving the game away if I said that VoiceSage were talking to a number of financial sevice organisations about this very issue.

technorati tags: customer, interaction, voice, messaging, customer, contact

Explore Tags: CIM, credit and collections, credit card management, financial services

The Banking Business Review has an interesting piece on the approaching problem of credit management in the retail sector. Noting that the card sector, overdrafts and mortgages have become the latest products to be scrutinized by regulators with respect to excessive fees, the regulators are clamping down on excessive fees which will undoubtedly be a huge issue for retail lenders.

“Indeed, they are likely to lose a significant source of revenue. For instance, over limit and late payment fees accounted for an estimated 11.5% of total credit card industry revenues in 2005. Furthermore, the enforced reduction in default fees will cost the credit card industry an estimated GBP524 million in lost revenue”.

Given that these companies may no longer financially benefit from letting customers run up these fees, it is probably going to become even more important that outstanding credit is collected efficiently.

technorati tags: customer, interaction, voice, messaging, customer, contact

Explore Tags: credit and collections, credit card management, Credit Management, financial services