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THE ROI OF MODERN FRAUD PREVENTION PROGRAMS

May 2019 Omer Minkara Vice President & Principal Analyst, Contact Center & Customer Experience Management

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This report highlights why contact centers must modernize their legacy approach to fraud prevention.

Boost Contact Center Results and Maximize Customer Experiences through Modernizing Fraud Prevention

The stakes of fraud prevention in the contact center have never been higher, and the number of customer touch-points have expanded drastically over the past decade. Contact centers collect more data through more channels — interactions with live agents, IVR, mobile, and chat — than ever before. Meanwhile, fraudsters have become increasingly sophisticated and have identified the contact center as the weakest link. This means legacy methods to prevent fraud must be updated to keep up with these changes.

Modern fraud prevention programs must focus on monitoring and preventing fraud through voice channels; Crooks commonly use phone and interactive voice response (IVR). Organizations must become proactive — instead of simply detecting whether a current conversation might be fraudulent, contact centers must also use technology capabilities such as predictive analytics and machine learning to predict the likelihood of fraud and address it before the actual attack takes place. This means helping contact centers go beyond identifying only the known threats to exposing those that are unknown in order to minimize potential damage to the business and customer trust erosion.

Between March and April of 2019, Aberdeen surveyed 354 contact center

Definition: Modern Fraud Prevention Programs

For the purposes of this research, Aberdeen defines a modern fraud prevention program as a formalized program through which contact centers monitor and prevent fraud impacting their activities.

Among the common elements included across these programs are: customer authentication through various methods such as voice biometrics and analytics to uncover patterns related to fraud and proactively manage fraud risk.

leaders around the world from companies across all industries to reveal the key trends and best practices influencing contact center programs. The findings reveal that businesses without a modern fraud prevention program (see sidebar) are 4.3x more likely to experience customer data security issues (81% vs. 19%).

Data from the Aberdeen survey shows 58% of contact centers currently use a modern fraud prevention program. While these programs help minimize the risk of experiencing data security issues, there are other benefits for contact centers deploying a modern fraud prevention program, including greater efficiency in contact center activities and the ability to deliver seamless customer experiences. Figure 1 reveals that these firms achieve far superior year-over-year growth across numerous metrics related to contact center operational efficiency.

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Figure 1: Contact Centers with Modern Fraud Prevention Programs Enjoy Greater Efficiency

15%

10%

5%

0%

Agent productivity Improvement in average cost per

customer contact

Improvement in

average handle time

Number of quality

SLAs met

Source: Aberdeen, April 2019

Aberdeen’s research reveals that at least 71% of contact centers use the metrics in Figure 1 as part of their performance measurement efforts. Hence, improving these metrics are top of mind for savvy contact center leaders. How do modern fraud prevention programs influence these outcomes? They make the customer authentication process more efficient for the company and effortless of the customer. For example, tools such as voice biometrics enable firms to use callers’ voiceprint (unique aspects of human voice) to authenticate a customer. The caller is authenticated before they’re even connected to an agent, allowing the representative to focus on serving their needs. In the background, the technology is checking that the caller is not an imposter by comparing the caller’s voiceprint to a watchlist of fraudsters' voices.

Such modern authentication methods improve agent productivity in the contact center by enabling agents to spend more time listening to and serving customers. Figure 1 shows that firms with modern fraud prevention programs reduce average handle times by 20x year-over-year, compared to firms using legacy fraud prevention programs (6.0% vs. 0.3%). Decreased handle times help contact centers reduce telephony costs associated with the time agents would otherwise spend authenticating customers.

Data also shows savvy contact centers that modernize fraud prevention programs enjoy 5.2x greater annual increase in agent productivity (12.5% vs. 2.4%). This is because the technology helps to more efficiently and accurately authenticate customers, enabling agents to focus on helping address client needs rather than authenticating callers, which at times may feel like an interrogation. Enriching agent satisfaction by empowering them to help customers improves overall agent experience and the ability to retain these satisfied, productive agents.

While improving operational efficiency is vital for contact centers, Aberdeen’s latest contact center survey shows that contact center leaders are 81% more likely to cite customer experience improvement as a top objective as compared to increasing efficiency (58% vs. 32%). As such, it’s important that

Contact centers with modern fraud prevention programs empower their agents to become more productive.

They enjoy 5.2x greater annual increase in agent productivity. This is in addition to enhanced agent experiences and a minimized risk of human error.

12.5% Companies with Modern Fraud Prevention Programs All Others

7.2% 6.0%

5.2%

2.4% 3.6%

0.3% 1.5%

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modern fraud prevention programs don’t just help contact centers excel in areas such as average handle times and agent productivity, but also assist in creating and retaining happy customers.

Contact center ability to address client issues with minimal customer effort highly influences customer satisfaction; the authentication process should be completely seamless. Callers shouldn’t be asked again to provide the information they shared through the IVR system when they are finally connected with a live agent, even as part of the company’s efforts to minimize fraud risks. Figure 2 shows that contact centers adopting and nurturing a modern fraud prevention program achieve 2.5x greater annual improvement (decrease) in customer effort score (8.2% vs. 3.3%).

Figure 2: Modernizing Fraud Prevention Activities Helps Capture Customer Loyalty

15% 14.0% Companies with Modern Fraud Prevention Programs All Others

10%

5%

12.3%

7.2% 7.0%

8.2%

3.3%

0% Customer satisfaction Customer retention Improvement in customer

effort score Source: Aberdeen, April 2019

Customer effort score and customer satisfaction rate can be measured in numerous ways. While some firms use methods such as net promoter score (a measure of customer advocacy), others may use a scale of one (unsatisfied) to five (highly satisfied) or one (unsatisfied) to 10 (highly satisfied). Although companies use different measurements of customer effort and satisfaction rates, looking at the year-over-year change in these metrics allows us to understand how modernizing fraud prevention programs helps firms to improve their results across the board.

Data in Figure 2 shows that firms with modern fraud prevention programs don’t just minimize customer effort. They also improve customer satisfaction rates and improve customer retention rates year-over-year. These firms observe 94% greater annual improvement in customer satisfaction rates (14.0% vs. 7.2%) and 76% greater annual increase in customer retention rates (12.3% vs. 7.0%).

Customer retention is typically measured by observing the percentage of paying clients that maintain their business with the company during a given timeframe (such as one year). This metric is often used to gauge companies’ ability to manage customer loyalty. Firms with modern fraud prevention programs increase customer satisfaction rates and drive client loyalty

Success in fraud prevention means success in creating happy customers.

Customers don’t want to work with companies that can’t protect their information. Modernize your fraud prevention programs to boost customer trust and loyalty.

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because their approach to proactively managing the entire fraud lifecycle instills trust in customers. Combined with the ability to use modern technologies such as voice biometrics to deliver effortless customer experiences, contact centers modernizing their prevention programs truly outshine their competitors by differentiating through superior customer experiences.

Key Takeaways

Fraud prevention is of significance to a wide variety of organizations. It’s not just companies operating in heavily regulated industries such as financial services, healthcare, or insurance that must diligently prevent fraud. Contact centers of all sizes capture a wealth of customer data including consumer credit card information, addresses, and identification numbers. Firms are entrusted with this information and must put processes and technologies in place to prevent fraud. Firms using a legacy approach to fraud prevention are 4.3x more likely to face data security issues. Due to these risks, contact centers must consider modernizing fraud prevention programs to minimize business risk, instill customer trust, and ensure organizational accountability.

The performance findings in this document show that companies that adopt a modern fraud prevention program not only minimize the risk of data security issues but also achieve operational efficiency and boost customer experience. These organizations increase agent productivity and minimize handle times while creating loyal customers and reducing customer service costs.

We recommend companies modernize their legacy fraud prevention programs to achieve similar outcomes. When doing so, remember that every business is unique. Also, evaluate and identify areas in which your legacy fraud prevention program can be improved to make customer authentication easier, monitor the agent desktop to prevent fraud, and proactively manage the entire fraud lifecycle to minimize risk. The results of this evaluation will help you tailor your fraud prevention program to meet your business’ unique needs.

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About Aberdeen Group

Since 1988, Aberdeen Group has published research that helps businesses worldwide to improve their performance. Our analysts derive fact-based, vendor-neutral insights from a proprietary analytical framework, which identifies Best-in-Class organizations from primary research conducted with industry practitioners. The resulting research content is used by hundreds of thousands of business professionals to drive smarter decision-making and improve business strategies. Aberdeen Group is headquartered in Waltham, Massachusetts, USA.

This document is the result of primary research performed by Aberdeen Group and represents the best analysis available at the time of publication. Unless otherwise noted, the entire contents of this publication are copyrighted by Aberdeen Group and may not be reproduced, distributed, archived, or transmitted in any form or by any means without prior written consent by Aberdeen Group.

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