A dramatic shift in consumer communication preferences is taking place around the world-with a direct impact on how credit unions are managing cases of potential fraud.
According to the Fraud Cardholder Communications Survey conducted earlier this year by Harris Interactive, 89% of consumers prefer their financial institution contact them via multiple channels-including phone calls, text messages and e-mail-when fraudulent activity is suspected on their debit or credit card.
The study also suggests that consumer communications preferences vary widely. Credit unions need to take advantage of new opportunities to quickly resolve suspicious fraud transactions. Good news for many CUs comes with the availability of, and consumer interest in, multi-channel communications. As much of this can be self-service, credit unions can find a reduction in contact center costs associated with suspicious card activity and suggests the need for effective, interactive communication.
A $54-Billion Problem
Fraud is a $54-billion growing problem, one that credit unions cannot ignore. Card-issuing CUs can address the burgeoning threat of identity theft by alerting cardholders to suspicious account activity through a variety of communications channels and empowering those cardholders to resolve fraud immediately and only speak with fraud specialists when needed.
The Fraud Cardholder Communications Survey found that the way credit unions deal with fraud will have an impact on loyalty for almost 50% of consumers. Those credit unions that handle it well can increase loyalty-as it did with 33% of consumers surveyed. In addition, the primary way (68%) a credit union could improve the member experience if fraudulent activity is suspected was to know the best ways to contact the member. Understanding these communications preferences generally facilitates a faster response from the cardholder.
Despite this massive opportunity to reach members, there is a disconnect between how cardholders prefer to be contacted and how they actually are being contacted-resulting in higher fraud costs for CUs and card issuers across the country. Thirty-five percent of consumers surveyed indicated they would like to receive notification by text message, yet only 1% of fraud victims in that age group were notified that way, according to the survey.
Traditional communications channels, including the home phone and postal mail, are dependent on the indiviual being present in that location. To successfully interact with a cardholder, time-sensitive communications must honor both the member's communications preferences and the trend towards mobile communications. With more than half the global population now using mobile devices, communication strategies must include those accessible on a mobile device.
To contact more cardholders and resolve more cases in less time, credit unions must enhance their contact strategies. Credit unions should consider the following elements of an effective multi-channel communications strategy:
• Real-Time Fraud Notification. Notifications must occur almost instantaneously. For instance, if a cardholder is making an unusual purchase online, they should receive an e-mail concerning the transaction before getting up from the computer.
• Preference Management. Credit unions must optimize their contact strategy using the member's preferred communications channels. One might not have a landline phone for example, and prefer to receive text messages and e-mail.
• Multi-Channel Campaign Strategy. If a credit union cannot reach the cardholder on one channel, it must attempt to make contact through another. Enabling cardholders to interact on multiple channels and confirm that the transaction was resolved may prevent a costly inbound call to the contact center.
Personalization Is Key
• Personalized Cardholder Interactions. CUs must closely align their internal fraud detection systems with their fraud management strategy, allowing an automated dialogue between the credit union and cardholder. This allows CUs to use the member's personal information, such as mother's maiden name, ZIP code, high school or other qualifying data. This information is used to verify the person receiving the communication is the right recipient, personalize the interaction and build trust with the member.
• Case Resolution and Updating Credit Union. Once the cardholder indicates whether the transaction was legitimate, the outcome of the dialogue must be relayed to the card-issuing credit union. Members who indicate a transaction was fraudulent must be transferred into the card-issuing credit union's contact center to speak with a fraud specialist. When the cardholder confirms the transaction is valid, the communication is completed in automated mode and the case record is updated to prevent future contact attempts.
Mapping contact strategies to member preferences provide credit unions with an unprecedented opportunity to not only to minimize fraud costs and free up their agents' availability, but also improve member loyalty. In fact, the Fraud Cardholder Communications Survey reports one-in-three cardholders feels more loyal after an incident if the financial institution handles it properly. In the end, credit unions that implement a multi-channel communications strategy will reap the benefits of increased loyalty, reduced costs and limited exposure.
Colleen Ayres is senior product manager, fraud solutions at SoundBite Communications, Inc., and can be reached at email@example.com.