If you’re concerned that no one knows your business as well as your employees, a trusted in-house team that you hand-pick and control may be the best solution. When you hire well, you can build a talented team dedicated to fighting fraud.
Notably, with an in-house team, you have more control over which anti-fraud criteria are used. You can determine which orders are flagged for review and which are automatically rejected with greater fine-tuning.
The risks: Ongoing training is essential to keep your team up to date on evolving fraud trends, otherwise you may miss significant fraudulent events. You also need to ensure that your team has enough manpower to download free usa email database sudden increases in sales (without overstaffing during slow times). Keeping a team on-call requires dedicated resources and ongoing work, while an outsourced solution gives you quick and convenient access to experts when issues arise or attacks are detected.
2. Budget and resources are not primary concerns
If you have access to the right talent and the right systems, maintaining an experienced in-house anti-fraud team can allow you to effectively mitigate exposed fraud. Additionally, an in-house team will allow you to control all costs.
The risks: The cost of hiring, training, and maintaining a team of fraud detection experts in-house can be significant. You should consider other major costs, such as the investment in IT hardware and software that will be required to set up a monitoring and analysis system for your team.
There may also be indirect costs associated with false rejections, which can occur if your fraud team gets overly enthusiastic and accidentally rejects valid orders that appear to be fraudulent at first glance. These false rejections not only mean lost sales opportunities, but can also lead to unhappy buyers, a detrimental user experience that can trigger negative word-of-mouth marketing.
3. Concern about protecting sensitive data.
Companies that are very concerned about privacy, data loss, and confidentiality may be more comfortable using their own in-house anti-fraud team.
For example, retailers in the healthcare industry may have access to sensitive consumer data that is federally protected to maintain the privacy of that individual. Sharing this information with company employees may seem less risky than sharing it with a third-party vendor, even though the risk of fraud is the same.
The risks: Service providers are experts in data management, so they will typically have more refined data protection policies and resources than the retailer itself.
Balancing the Costs of Internal Fraud Protection
The decision of whether or not to outsource your fraud management can be a difficult one. Your company’s circumstances will help guide you in this decision. To outsource, you must be prepared to handle 100% of the fraud management tasks and keep up with the frequent changes in fraud trends while maximizing your approval and conversion rates, as well as fraud protection. It’s a big investment that requires significant financial, intellectual and skilled labor resources, so think carefully, talk to experts and always look for what’s best for your business.