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Fraud is a growing problem for businesses today. In 2024, the number of suspicious activity reports (SARs) continues to rise at a rate of 4% to 5%. As criminals use more advanced techniques, companies need better ways to detect and prevent fraud.
Business process outsourcing (BPO) services provide a robust solution with advanced tools, expert knowledge, and cost-effective methods. Using BPO in fraud detection helps businesses avoid threats and concentrate on their main activities.
Read further to learn more!
The significance of BPO in fraud detection
To start, what is BPO? It is delegating non-core processes to a third-party vendor. BPO services have become essential in enhancing efficiency and strengthening capabilities in various business aspects, including risk management.
As fraud methods become more advanced, companies need specialized skills and modern tools. BPO firms offer the necessary expertise and technology. They provide solutions that can detect and prevent new types of fraud, ensuring ongoing protection.
Choosing the right BPO vendor is vital to effective fraud detection. The best outsourcing partner should have a solid track record, advanced tech infrastructure, and in-depth knowledge of specific industry threats.
Outsourcing fraud detection to a trusted BPO provider enables better accuracy, real-time monitoring, and thorough analysis to protect client assets and reputation. In the process, businesses can focus more on their revenue-generating activities.
Advanced fraud detection tools and technologies
In February 2024, Mastercard launched a generative artificial intelligence (AI) that could boost fraud detection by up to 300%. It’s not only Mastercard, as AI has also become more prevalent in fraud detection across industries.
BPO providers are on top of this trend, adopting the latest tools to support businesses. BPO in fraud detection gives access to technologies such as AI, machine learning (ML), and blockchain.
AI and ML analyze large amounts of data quickly, identifying patterns and anomalies that might indicate fraud. For example, ML algorithms can detect unusual transaction patterns that humans might miss.
Blockchain technology adds another layer of security by providing a transparent and tamper-proof record of transactions. Thus, fraudsters find it more challenging to alter personal information without detection. Moreover, this technology enhances the verification process to protect personal data.
BPO providers also use advanced analytics and predictive modeling to anticipate and prevent call center fraud. These technologies monitor transactions and activities in real time and send instant alerts when they detect suspicious behavior. The immediate response helps stop fraud in its tracks, minimizing potential damage.
E-Global, Mexico’s largest electronic payment processor, faced challenges with the rapid growth of electronic transactions. It needed a solid system to monitor transactions in real time.
The company used INETCO Insight to examine real-time transactions from various sources. By quickly spotting unusual activities and effectively securing data, E-Global improved fraud detection and operational efficiency.
A reliable BPO provider allows clients to use their cutting-edge tools and technologies and guides them on implementing and using them effectively.
BPO expertise in fraud analysis
BPO providers offer specialized skills and knowledge that enhance fraud analysis. Their expertise helps businesses identify and understand fraudulent activities, making prevention more effective.
A BPO firm hires security experts who know the latest fraud detection techniques and technologies. These professionals handle different types of fraud, such as call center fraud and identity theft. They use sophisticated tools to analyze customer data and find patterns that signal fraud.
For example, BPO experts apply complex algorithms to check transaction data for unusual patterns that signal fraud. These algorithms simultaneously analyze transaction amounts, frequency, and locations. The process provides BPO professionals valuable insights to prevent fraud before it causes significant problems.
BPO providers also stay updated with the latest trends and regulations. Fraud tactics change, so BPO firms invest in ongoing training to prepare their teams for new challenges. This proactive approach keeps them ahead of fraudsters. Further, it allows them to stay compliant and avoid the risk of legal and financial issues.
Lastly, BPO providers improve fraud analysis by using knowledge-based authentication methods and hiring skilled call center agents to verify transactions. Their contact centers enhance the customer experience by protecting credit cards and other sensitive information.
Cost efficiency and resource management
Building a team of fraud analysts equipped with innovative technology is expensive. This considerable investment might not be practical for small- and medium-sized businesses. BPO in fraud detection shines in this regard as it offers cost efficiency.
Most BPO providers operate in regions with lower labor costs. According to Indeed, the average monthly base salary for fraud analysts in California is $3,539. In the Philippines, it’s $473.84. The stark difference in labor costs makes offshore outsourcing a viable, cost-effective solution for all business sizes.
Moreover, BPO companies invest in advanced tools and train their experts to help clients stay competitive and secure without exceeding their budgets. In essence, this boosts fraud detection without increasing operating costs.
BPO vendors also enhance resource management by streamlining workflows and optimizing processes. They use advanced analytics and automation to handle large transaction volumes and detect real-time fraud. Besides improving fraud detection, it allows internal teams to focus on core business functions, such as customer service.
Continuous improvement and adaptation
BPO providers focus on continuous improvement and adaptation to stay ahead in fraud detection. One strategy is regularly training call center staff. These employees know the latest fraud detection methods and the best practices in handling sensitive customer information. They can quickly respond to threats such as account takeovers.
BPO providers also refine their systems using feedback loops and performance metrics. Analyzing data from past incidents helps them improve their algorithms, enabling them to detect suspicious activities more effectively and minimize disruptions for legitimate customers.
As mentioned, BPO firms invest in technologies to enhance fraud detection capabilities. Since fraudsters use the same technologies, BPO companies stay up-to-date with tech advancements. They reinforce their defenses before fraudsters can take advantage.
With how fast the industry changes and technology advances today, keeping up might take a lot of work, especially for companies trying to do it all independently. BPO in fraud detection relieves pressure off the internal workforce by staying on top of all these developments. Hence, businesses have more time and resources to improve core competencies.
The bottom line
How prepared is your business to protect customer information and maintain trust as fraud tactics evolve? BPO in fraud detection can make all the difference. Armed with the latest tech and committed to continuous improvement, BPO firms implement strong security measures that adapt to evolving threats.
Consider working with Unity Communications to enhance your fraud detection capabilities! Let’s connect and discuss how we can safeguard your business.
