One of the most important aspects of fraud prevention is to know where you stand in the fight against fraud. An effective fraud scorecard makes you aware of current trends, helps identify any evolving problem areas, and empowers you to make decisions as an organization. Striking the right balance is important. Too much detail can drop adoption or cause you to miss unforeseen issues due to information paralysis. Too few details won’t deliver actionable insights, rendering the scorecard ineffective.

One way to strike that balance is to design a layered scorecard that is crisp, insightful, and appealing to all audiences.

Define the goal of the scorecard

Before you get started, you should know the answers to these questions:

• What is the scorecard supposed to say and to whom?
• Is it meant for consumption by senior management?
• Should it cater to analysts and fraud managers?
• Should it provide the ability to do deep analysis and define rules?

When any new patterns are found during investigations, it’s tempting to add additional views to the existing scorecard. Over time, such additions will bloat the scorecard and deplete its overall effectiveness. Defining a goal in advance and sticking to it will help to ensure that the value of the fraud scorecard remains intact.

After the goal is defined, the layers for a fraud scorecard can be carved out. Typically, three layers work best to offer insights that cater to different levels of consumers.

First layer: Exec summary

The purpose of this layer is to show the business impact as a snapshot. A view that can be taken as-is into executive review slides. Include only a few uber-level metrics. Profit efficiency, which measures overall impact from fraud, non-fraud, and optimization, should be the main metric in this view. Customer impact metrics, such as escalations or false positives and a split of fraud detected by automated system versus human reviews, can also be included. Representing these metrics as snapshots for a specific time, month, or week, and color coding them to measure against target or change from a previous time period will emphasize the goal of this view.

Second layer: Contributors

This layer should show what the current trends are and what is contributing to any changes in uber-level metrics. This will be the key monitor for fraud managers and the starting point for analysts. A trended view of key metrics, such as fraud rate, split by chargeback and other sources, rejection rate, top rules that were executed, challenge rate, and refund rate can be included here. Representing these as trend charts, with the ability to look back a few months, will make these most insightful.

Third layer: Drivers

This layer offers deep dive views on causation. Analysts can rely on this view to quickly identify drivers for any changing trends and react to evolving fraud patterns. Score distribution and respective fraud rates, segmentation slices such as geo-product-payment type can be included. If there are certain thresholds implemented to deter abuse, such as a maximum of five orders per month per user, then views can be added here to track users who are hovering just below the threshold.

Things to avoid in a fraud scorecard

It is important to not use a fraud scorecard as an investigative tool. A scorecard is meant to provide an aggregate view of where things stand, like the dashboard of a car. Investigations will require specific data at transaction level. Having the ability to slice data in multiple forms and link across transactions is quintessential for investigations. Trying to build one tool for both purposes can easily lead to large amounts of data, which slows down performance and dilutes value. Except for certain cases where you are using specialized Power BI and data exploratory tools, it’s always best to keep a fraud scorecard separate from investigative tools.

Next steps

If you’re already using Dynamics 365 Fraud Protection, use the account protection and purchase protection scorecards to gain business insights. Additionally, as described in our earlier post Do you monitor the pulse of your fraud protection operations?, you can also export transactional data into your existing workflows to augment your business-specific reports.

If you aren’t already using Dynamics 365 Fraud Protection, sign up for a live demo or a free trial to check out this and other capabilities that can help your business develop effective fraud protection strategies.

The post Best practices for building an effective fraud scorecard appeared first on Microsoft Dynamics 365 Blog.

Effectively managing fraud requires a multi-tiered strategy. It is essential to adopt a fraud prevention strategy with a broad view, encompassing multiple user interaction events, and phased decision-making points.

A user interacts in many ways on a merchant’s website, such as searching for products, updating account info, writing a review, adding or removing items from their cart, or signing up for events or newsletters. Each of these interactions provides tell-tale signs of their behavior and intent. Analyzing all of these interactions cohesively helps to identify fraud more accurately and provides a seamless experience to legitimate customers.

The classic approach to fraud is to look for specific events to identify certain types of fraud, like purchases with a stolen credit card or account takeovers. Most tools support this approach, to assess specific generic events such as purchases, sign-up, sign-in, or coupon redemption. Evolving beyond this classic approach requires tools that can help you tailor a fraud prevention strategy to best suit the unique interactions between your business and your customers.

Custom assessments are available as part of Dynamics 365 Fraud Protection and enable you to tailor a fraud prevention strategy that best suits your business and customer needs.

Analyzing the customer journey in your business is the first step in understanding where to deploy custom assessments.

Identify key touchpoints of a user journey

Begin by identifying user actions that could indicate a high risk of fraud or help you track unusual behavior later in the user’s journey. These actions can vary by the type of business you run. For example, a user updates the physical address on their account. If a restaurant offers promotions for users from certain locations, an address change may indicate a risk of fraud or abuse of the promotion and you may choose to act immediately. In contrast, if you are an e-commerce merchant offering gifts and accessories, this event alone may not indicate risk, but subsequent actions may. In this case, you can add an additional check if the next action was updating the phone number, as it may indicate the risk of a compromised account.

Create custom assessments for these key touchpoints

After you have listed the touchpoints that are key indicators, you can add assessments to these events. Custom assessments have the flexibility to define every part of the assessment to match your business-specific scenario — including the API name, event name, and the payload. This helps you to easily manage all the assessments.

Using the rules engine to determine actions

After your custom assessments are created, you can use the rules engine to configure what actions you want to take on them. From the earlier example for a restaurant, you can create rules for the address change event to check the distance between both addresses or the history of orders from that user and return a reject decision to block the user. Or if you are the e-commerce merchant, return this event to a watch list for action later.

You can view the performance of your custom assessments, including the total volume of events and what rules were triggered if any, in the scorecard tab of the assessment.

Next steps

To learn more about custom assessments, check out the documentation. To see for yourself how Dynamics 365 Fraud Protection can help your business, get started today with a free trial.

The post Build a tailored fraud prevention strategy with custom assessments appeared first on Microsoft Dynamics 365 Blog.

Even in challenging times, the holiday season’s irresistible deals attract both customers and fraudsters. A differentiated fraud prevention strategy is essential to keep a merchant’s fraud losses minimized while letting legitimate customers continue to have a smooth shopping experience.

Consumers often change buying and engagement patterns with merchants during the holiday season like shipping to a new address when buying a gift or adding a new card on file that may give them higher rewards or a higher spending limit.

These new consumer behaviors pose a challenge for fraud prevention because it makes it more difficult to differentiate between fraud attempts and legitimate purchases.

Online purchases are expected to increase this year due to social distancing requirements. Now more than ever merchants need to adopt a differentiated strategy for fraud prevention—one that helps adapt and respond to changing customer behaviors and minimizes fraud loss.

Here are three tips for the holiday season to help keep fraud low and maximize gains during these peak sales times.

First: Identify your fraud attack zone

While this may sound like a no-brainer on the face of it, identify and make a list of products in your portfolio that fraudsters can benefit from, either by reselling the products or using it themselves.

One of the key strategies in fraud defense is to identify where you are likely to be attacked. A product that is of limited supply or being posted with a high discount is more likely to be targeted than a product that is abundantly available year-round and has a low discount. Digital goods, especially one-time or non-subscription digital goods, tend to be targeted more than physical goods.

Commonly, these will also be the products most of your customers want and are the star items of your holiday deals.

Loosening fraud-decision thresholds on these products could make you a soft target for fraud. Instead, evaluate if you can apply limits such as maximum quantity and then use it in a watch-list fashion for reviews and reporting.

If you have a process in place for manually reviewing some transactions, consider adding confirmation or shipping delays until the review is completed.

Second: Set up rapid internal fraud communication channels

Core sale events and accompanying fraud attempts can last from a few hours to days. During which there will be an outburst of information coming from customer escalations, social engineering attempts, reports of successful purchases, and successful fraud prevention.

Weeding out noise from useful signals in real-time is essential. Normal communication methods such as support tickets and email messages can’t scale to meet these needs.

Set up channels that promote cross-functional communication in real-time, such as incident management tools, command room techniques, or collaboration tools such as Microsoft Teams. Include fraud analysts, review agents, customer support agents, and any other teams involved in handling fraud or customer escalation in these rapid communication channels. This helps with quick resolution of any false positives (customers blocked due to fraud suspicion) and to identify new fraud patterns as well as react to them.

Third: Monitor trends as near to real-time as possible

During the rush of holiday sales activity, it is essential to monitor the trends as near to real-time as possible and as granular as possible. Set up reporting on decisions and trends such as reject rate, approval rate, review rate, and trends of total volume and score distribution with views across slices of products, geographies, and user segments. All teams responsible for fraud prevention should always have a hawk’s eye on these reports and be ready to quickly jump-in if suspicious trends are seen.

How Microsoft can help your business combat fraud efficiently this holiday season

If you are currently using Dynamics 365 Fraud Protection, you can use the virtual fraud analyst capability to get a segmented view across your products and fraud profiles. The scorecard gives you a real-time view of the performance and support tool that helps to search and investigate all transactions including risk information and history. You can also enable the transaction acceptance booster feature to share data with banks in real-time to maximize customer experience and reduce wrongful declines.

Next steps and continued learning

If you are not currently using Dynamics 365 Fraud Protection, you can learn more and start a free trial to see what additional value you can bring to your business and customers.

The post 3 ways to minimize fraud this holiday season appeared first on Microsoft Dynamics 365 Blog.