com·pet·i·tive ad·van·tage
a condition or circumstance that puts a company in a favorable or superior business position
Competitive advantage is what differentiates businesses and industries. It’s what separates and determines success. Products, business models, marketing, or sales strategy.
But what about in the context of fraud prevention?
When I think of competitive advantage, I think about how I can be more successful than my competitor. But who is the competitor when it comes to fraud? Am I trying to separate myself from my peers, or am I trying to separate the fraudsters from the consumer? The future of fraud prevention is collaboration. Through collaboration we can limit fraud at a greater scale which will ultimately limit losses and do a better job at protecting the consumer.
3 Ways To Better Collaborate
Share Trends
Fraud isn’t distinct and is typically institution agnostic. Something that I am currently experiencing has probably been seen before by one of my peers, and will most likely move on to victimize others. Develop local round tables or collaboratives with your peers and share individual instances of fraud. Collaboration at the local level will help develop the foundation of collaboration on a broader scale.
Share Knowledge
Share your experiences, responses, and outcomes. By doing this we can help get in front of fraud and stop it in its tracks. Not necessarily sharing individual trends, but identifying root causes for certain typologies of fraud and the strategies you have implemented to help curb those losses. By leveraging the successes, and even failures of one another, we can quickly learn and adapt. What worked for you, and what didn’t? Are you partnering with any key players in the market that might have a solution to this particular problem?
Share Data
This is the hardest pill to swallow. In this day and age of data privacy, no one wants to give up their data. Especially in the banking world where the majority of data is proprietary or highly sensitive. Data is king, and the institutions that learn to understand it will always come out on top. But data is also the best way to combat fraud. By leveraging big data you can spot trends, identify root causes, and adapt much quicker. The sharing of data allows fraud fighters to utilize consortium knowledge to make more informed decisions based on shared experiences, and shared suspicions.
Shared data is the ultimate goal for fraud prevention. The successful implementation of a fluid data sharing apparatus will help scale both the sharing of trends and knowledge. It will help with building better digital identities, work towards protecting consumers from identity theft, and ensure we are capturing fraud at a quicker pace. Ensuring the security and integrity of the data will be the largest hurdles, but with the larger adoption of blockchain and other similar data encryption technologies this is becoming more and more of a reality. I hope to discuss this concept in future posts, so keep your eyes peeled. And don’t ever stop chasing checkmate.