Pub. 7 2017-2018 Issue 3

O V E R A C E N T U R Y : B U I L D I N G B E T T E R B A N K S - H E L P I N G C O L O R A D A N S R E A L I Z E D R E A M S November • December 2017 19 Executive Development Institute for Community Bankers ® April 15-18, 2018 NEW PROGRAM: Community Bank Investments School May 20-24, 2018 68th Annual School Session July 15-27, 2018 America’s Premier Community Banking School Budget Today! University of Colorado | Boulder, Colorado www.GSBColorado.org into a disgruntled one. Equip your front-line staff with processes and tools to better serve and reassure your customers. Consider, also, the possibility of self-service disputing from within your digital channel, to save your customers from hold-times and other inconveniences. 2. Back-office simplicity Replace obsolete spreadsheets, automating everything from letter-generation to posting adjustment transactions to tracking representments and regulatory timelines. Au- tomation will make your operation more resilient in times of high volume or an unexpected absence. Cross-training and distribution of duties can also help. Relying on one person to manage disputes creates an operational risk. 3. Reporting The ability to track and report on dispute activity (both fraud and non-fraud, both current-day and historical activity) is imperative. This is very difficult with Excel. Whatever tool you use for reporting should be simple yet comprehensive, with the ability to tailor reports to the needs of your staff or to the details of a specific breach. 4. Management oversight Make sure management has visibility into your fraud volume. This should include automated processes that gen- erate alerts for dramatic changes in activity, specifically sudden increases. 5. Compliance controls Automating dispute processes can help ensure the FI remains in compliance with Reg E (for debit cards) and Reg Z (for credit cards). Even if you have never had a violation, outdated procedures pose operational risk that can (and will) be exposed when there is a significant influx in fraud due to a breach. Comprehensive tracking and reporting also gives you an audit trail for regulators. 6. Fraud analysis Traditional dispute management doesn’t do much to shed light on the financial impact of fraud. The right technology will track the outcome of a dispute at the transaction level, helping management understand and monitor fraud losses—which is crucial in the face of a significant breach. 7. Systems integration A solution that integrates with your core, card proces- sor, customer service portal, and other archives and tools can help you leverage existing data to streamline dispute processes and reduce the effort to resolve disputes. 8. In-house implementation vs. SaaS Weigh the pros and cons of in-house dispute manage- ment software versus the Software as a Service (SaaS) model. The former might feel safer or more reliable, be- cause all data remains on your network, but robust SaaS processing has become a secure and accepted option. Many factors play into this discussion, including technical expertise and systems integration requirements. 9. Build vs. buy Larger FIs may have the resources to build dispute man- agement solutions, but many community Fis don’t. Even if the FI has internal programmers on staff, the scope of an internal development project can be significant—and must repeated for future upgrades. For most community FI’s, partnering with a proven vendor is the best option. 10. Going paperless In the digital age, having your front-line staff take ac- count holder disputes using pen and paper doesn’t inspire confidence—nor does it create efficiency, sufficiently sup- port compliance, or help prevent errors. However else you adjust your dispute management processes in the face of increased fraud, it’s definitely time to go paperless. For the vast majority of community FI’s, the dispute resolution process is in dire need of an overhaul. It’s time to leverage technology to more efficiently and accurately manage disputes. Fraud is an unpleasant reality, and will continue to be into the future, but the workload it creates doesn’t have to be as unpleasant, or as unmanageable, as it is today. It’s time to tame the beast! 