4 Hints that it's

time to CHANGe
your Fraud
Management
System
You might be losing money
and don't even know it.

A WEDO TECHNOLOGIES
PRODUCT POSITIONING PAPER

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4 Hints that it’s time to change your Fraud Management System 2

Your company probably has a software solution in place to help manage and
mitigate instances of fraud. If you don’t, the never-ending stream of high-profile
data breaches in the news today, should be enough to convince you that your
business needs one.

Jack Welch once said that “If the rate of change on the outside exceeds the rate
of change on the inside, the end is near.” The question faced by companies in
dynamic markets is whether their existing fraud management systems can scale
up to accommodate planned growth, or will there be limitations that constrict
growth? Even if current systems can scale up in the short term, what are the
prospects for the medium and long term?

Given the rate of change across practically every business today, there will
come a point at which the existing collection of software systems just can’t
accommodate the organization’s needs.  For example, can those applications
support new governmental regulations? With natural attrition, there is a growing
gap between new and existing employees. Do you really want to invest in training
new employees on obsolete applications?  Therefore, the question becomes not
“Should we change?”, but “When should we change?”

Read this document and get to know four hints that now is the time to consider
updating your fraud management system.

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4 Hints that it’s time to Replace your Fraud Management System 3

HINT #1:
Employees complain about using the current
system... and other departments start
complaining about the fraud team.
Any Fraud Management System that is not able to scale and remain responsive
and reliable will be resented—and eventually bypassed—by the fraud team.
And when that happens, it affects both revenue security and the perception of
the fraud team amongst others in the company. For example, when we learn of
companies getting hit with instances of fraud even though they say they have
fraud management systems in place, it often turns out this happened because
the fraud management team wasn’t able to extend coverage to a new service
that was being launched. Companies need a fraud management product that’s
easy to manage, and grows as the company grows, so the burden of protection
is minimal. A product that empowers the fraud management team to protect new
revenue sources from fraud risks and allows them to prevent new types of fraud
without waiting and paying a vendor or supplier to make configuration changes to
the system.

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4 Hints that it’s time to Replace your Fraud Management System 4

HINT #2:
Your original requirements are outdated.
The first step in answering the “keep or change” question is to create a
comprehensive list of requirements. Since we’re looking at Fraud Management
systems, this will run into thousands of requirements, but it’s important to
consider all the issues.

An inadequate analysis can lead to the wrong answers - and even the wrong
questions.  Should you decide to look for a new Fraud Management System
(FMS), any significant requirements that were not identified during the initial
analysis phase (10 years ago???) will more than likely be missed, unless special
precautions are taken. If there are a significant number of new requirements
necessary that were missed during the initial qualification phase, it is entirely
possible that you need to change your fraud management system. Even if you
chose the best solution at the time, every “new” requirement discovered that can’t
be met “out of the box” means more implementation work and associated costs.
Requirements that should have been discovered during the requirements analysis
phase are the primary cause of implementations that are late and over budget.

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4 Hints that it’s time to Replace your Fraud Management System 4

HINT #3:
The gap is widening.
When it comes to performing a gap analysis, begin by collecting and examining
the features of the current software system and rewriting them as requirements.
This process is also called reverse engineering - gathering requirements from
features. It is critical to use this same technique when looking at potential
replacement systems, because that is how you find requirements you don’t even
know you need; the type of requirements where people look at them and say,
“Hmm, I never thought of that, but I can see where it would be really important.”

With the requirements profile complete, you can then measure how well your
current and potential software systems meet these needs. Start by using the
requirements profile to list the requests that should be fulfilled by potential
vendors, then use the completed RFI or RFP to perform the gap analysis.

Begin by using a normalized scoring system, where 100% means a perfect match
with your requirements.

By now you probably have insight regarding how your system should link with
your daily fraud management operations, and how it should complement your
department’s skills. Use these insights to analyze the gap analysis. For instance,
if the existing system comes in somewhere around 65%, and the best new
systems score around 90%, that makes a strong case for starting the project now.
If a new project is in the cards, you will then want to double check your analysis
by estimating the project’s ROI.

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4 Hints that it’s time to Replace your Fraud Management System 6

HINT #4:
External dependencies are growing.
It’s important to emphasize how critical it is to also list all the feature-based
requirements from the various related products that help support your fraud
management activities. If you don’t include these requirements, the results will
be skewed and your current system might actually score very well on the gap
analysis. Although you will have gathered requirements based on pain points of
your current fraud management system, you also need to account for features
and requirements from other associated products, to help you uncover critical
requirements you may not even realize are needed.

For example, Do you need 3rd party tools to access self-service analytics to help
prevent, detect and mitigate fraud? Do you need to export data outside of your
fraud management system to access advanced analytics capabilities to support
your fraud management investigations? It is critical to account for these types
of requirements as well, even though they aren’t directly attributed to the fraud
solution.

Today’s fraud management requires a holistic approach, where various systems

and departments play an increasingly important role in fraud prevention.
Understanding and accounting for these growing interdependencies can be the
tipping point for moving to a solution that is flexible enough to manage this new
reality.

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