Preventing fraud: how can you minimize risk and drive your business at the same time?

Published on Dec 06 2023.

reading time 10 minutes reading

The greatest challenges for issuers is to intensify fraud-prevention barriers without creating obstacles for cardholders, as this might cause complaints about transactions.

Preventing fraud in financial transactions is a regular challenge for any issuer. It is an imminent risk that has to be controlled and mitigated. According to data from SBVC, 27% of Brazilians say they have been subject to some type of fraud when making an online purchase.

Considering the fact that projected growth for e-commerce in Brazil is 22% by 2025, according to Americas Market Intelligence, there is ample room for financial institutions to improve their antifraud services for online payments.

However, it is worth remembering that the issue goes far beyond electronic commerce. Although the fraudes in this environment are notable, it is important to highlight that scams and activities fraudulents also extend to both traditional payment methods, such as credit and debit cards, as well as new means of payment, as is the case with Pix.

In addition, since fraudsters tend to go after the easiest targets, sometimes this means resorting to older types of attacks in which the focus on protection is no longer top of mind. Card cloning, for example, made up 64% of attacks in June 2022, a 16% increase compared to the previous six months, according to Radar Febraban.

Preventing fraud results in numerous benefits: it prevents financial losses, drives a company’s results, encourages financial inclusion through experience, and consequently, impacts economic development.

However, our focus in this article will be on discussing fraud prevention strategies. Considering steps that might prevent good transactions isn’t useful, because as we know, a negative experience can cause a cardholder to choose another means of payment.


The cardholder’s experience is central in your fraud-prevention operation


preventing fraud

Every fraud-prevention manager knows very well the challenge involved in balancing fraud prevention in financial transactions, while simultaneously ensuring that good operations can proceed.

Unfortunately, we know there is no way to completely prevent irregularities. Just as important as blocking fraud and preventing false positives is prioritizing the client relationship with your credit or debit card, so that the client will increasingly turn to your service.

We’re talking about the client experience. Guaranteeing that the user will not be frustrated because they were unable to complete a transaction is an assumption. In addition to contributing to a good relationship, it creates loyalty.

A cancellation or random block can destroy a client relationship, which required efforts from several areas and high investments to be achieved. When a card doesn’t go through, the sensation of security in relation to the financial service is harmed, which can lead the client directly to your competitors.

To prevent this from happening, you must keep three factors in mind:

  • Technology: preventing fraud requires tools that can detect fraud in real time.
  • Knowledge: managers need to be prepared, and should be creative so they can handle the inventiveness of fraudsters.
  • Communication: interactions and the relationship with the user must be at the center of the strategy. It is fundamental to have a holistic understanding of the client’s life cycle, from the moment of onboarding to fraud prevention.


Pillars for an efficient fraud-prevention solution


The good news is that fraud-prevention technologies proceed at the same pace as criminal activities. There are currently models based on machine learning and artificial intelligence to prevent irregular transactions.

At the same time, one of the roles of technology is to promote a good experience for the client. Therefore, a fraud-prevention solution has a few fundamental pillars:


Digital Onboarding


Digital onboarding plays a fundamental role in the efficacy of solutions to prevent financial fraud. It has become fundamental as more and more transactions and interactions occur online, thus its importance covers both the client experience as well as security.

Robust digital onboarding allows fast and precise verification of the user’s identity. This is essential to confirm the legitimacy of the client and to mitigate the risk of identity theft. The ability to open a digital accounts quickly and easily, for example, directly influences client satisfaction and the likelihood of accepting the services offered.

Validation during onboarding is essential to confirm a user’s real identity. This process of validation and verification helps significantly reduce the risk of fraud, ensuring that the person behind the account is who they say they are.


Real-time responses


Preventing fraud requires a solution that anticipates suspicious behavior in real time. With this and an integrated communication strategy it is possible, for example, to check the validity of a purchase with the consumer while they are still at the point of sale, or on the electronic commerce site, confirming the transaction (or not) before blocking it.


Availability on any day and at any time


In a scenario in which most fraud happens in e-commerce, and not necessarily during business hours, it is fundamental to invest in platform availability, which should monitor bank transactions, bill payments, and Pix 24/7.


Reducing operating costs


An antifraud solution must have operating efficiencywhich is related to reducing the need to contact the client. Gains in effectiveness are made with automated interaction (via SMS, voice bot, e-mail, and push, among others). Furthermore, personalized criteria should be defined to evaluate the need for contact.


Improving the cardholder experience


There have also been significant improvements in the cardholder experience, especially in terms of learning which communication channel is the best for interacting with each user to confirm suspicious transactions.


Reducing attrition


Any response to a transaction can cause client attrition, whether in good transactions, or in identifying fraud that might reduce confidence in the financial service.

Therefore, for the quality of the business, making these occurrences as friendly and as personalized as possible is fundamental for a successful operation.


Size, quality, and history of databases


The size and quality of the database will serve as the starting point for this predictive fraud-prevention model. The longer the history of client data in the management system , the more precise the analyses will be for predicting fraudulent behavior using Artificial Intelligence models.

Currently the best solution for fraud prevention in means of payment is offered in the Latin American market by Dock, through its Fraud Prevention pillar, which is based on data.

The platform is able to analyze a large volume of transactions, using a vast data history to create extremely sophisticated analysis models. These models are based on client behavior in conjunction with Artificial Intelligence algorithms.


Dock’s Fraud-Prevention Solution


The technology Dock has brought to the markets of Brazil and Latin America is based on machine learning, and performs analyses from behavioral scores.

Our system allows risks and fraud to be detected, investigated, and prevented throughout all stages of your operation. We provide end-to-end peace of mind, from card processing and acquiring, to onboarding your end clients.

The platform allows your business to establish lasting relationships with good clients from the outset of their journey, for both individuals as well as companies. Through detailed steps, we allow you to accept more clients, prevent fraud (100% digital), and provide services and financial products with greater peace of mind.

And to accelerate the security of your operation even further, we join forces with FICO, Feedzai, and Unique, which are technology companies which, just like Dock, are market leaders and invest in innovation to create solutions that make daily processes easier, while protecting your business and your clients.


Watch this video for more information about our solution:

Dock’s Fraud Prevention solution requires low initial investment, and implementation takes place in just four weeks. We offer a robust platform with lower response time, a pay-as-you-go model (charge per transaction analyzed), card brands from the entire market, as well as technological intelligence and constant learning.

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Fraud prevention: what you saw in this article


  • Preventing fraud in financial transactions is a regular challenge for any issuer. It is an imminent risk that has to be controlled and mitigated. Besides happening in e-commerce, fraudulent activities also extend to traditional means and new means of payment.
  • It is necessary to put the client experience first, which means finding a balance between preventing fraud in financial transactions, and ensuring that good transactions go through.
  • The pillars for an efficient fraud-prevention solution are: digital onboarding, real-time responses, availability 24x7, reduced operating costs, improved cardholder experience, reduced attrition, database.
  • Dock offers a fraud-prevention solution that is based on machine learning and that performs analyses using behavioral scores. Dock’s partners in this endeavor are market leaders in the area: FICO, Feedzai, and Unico.


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