How Can a Financial Analyst Help Your Business Mitigate Credit Card Fraud?

05|2023

As the digital world and technology advance, fraud and cybercrimes continue to evolve. In the US, 389,737 credit card fraud cases were reported in 2021, with losses totaling $181 million. Credit card information is also now more easily accessible thanks to sophisticated phishing scams and card skimming equipment; criminals no longer need access to the physical card to steal money or use it for purchases. Besides its impact on consumers, credit card fraud can also heavily affect businesses. Financial losses and damage to reputation from these cases can make it difficult to recover, and customers will likely do business elsewhere. Security and verification measures are often used to prevent fraud, but detecting these cases may be difficult without the help of a professional.

Financial analysts are an underutilized asset in these cases. While their primary role is to analyze the organization’s past and present financial data, they also evaluate a lot of business transactions, including operating records and financial statements. Organizing this information allows them to advise investments and recommend financial strategies. By making sense of the information, they can inform decisions and plans to help organizations guard against fraud. Here’s how financial analysts help your business mitigate credit card fraud:

Applying for a safe card payment provider

After analyzing a business’s data, financial analysts can advise investments and financial strategies. One possible solution they could offer is to invest in or shift to a safe card payment provider to ensure customer transactions are more efficient and safer. With card-skimming devices and schemes on the rise, using trusted payment service providers and safe readers can protect consumers from having their credit card information stolen. Financial analysts can evaluate financial statements and other required documents, ensuring all the information is accurate. They can then use them to apply for a merchant account to start accepting card payments. Once card readers are in use, they can be used to analyze the data to make sure there are no behaviors present that may indicate a potential case of credit card fraud. They can also be used by businesses to make predictions and insights that will improve the company’s performance based on the information from the terminals.

Flagging suspicious activity

Financial analysts work with a lot of data to evaluate and forecast a business’s performance and financial position. While analyzing, they may spot irregular behaviors and patterns indicating a potential credit card fraud case. Larger than usual orders, multiple transactions to one card in rapid succession, or seeing multiple quantities of the same item charged to one cardholder can be red flags. Financial analysts can also work with auditors to spot and address inaccuracies in financial accounts and data that could lead to potential fraud going unchecked. With their eye for detail, they can make recommendations to the necessary staff or authorities to ensure these abnormalities are investigated and addressed.

Suggesting strong preventive measures

Financial analysts go beyond data analysis and evaluation; their expertise is required to advise on what else the business can do to boost performance and its financial strategy. They can recommend investing in relevant software if they notice that abnormal transactions and behavior occur too often. Financial crime prevention software is on the rise due to more cybercriminals targeting electronic and digital payments, putting consumers at risk of credit card fraud. AI and machine learning are also viable tools for detecting fraud. AI has already been transforming fraud prevention in the e-commerce sector, and these programs can assist financial analysts in evaluating large amounts of data and spotting anomalies. This ensures that possible credit card fraud cases are spotted and mitigated accordingly, preventing damage to the business and protecting consumers.

Written by Camila Ethan for charge-it-now.com