Fortune Magazine penned an article recently, on how banks are putting hacked credit cards on ‘watch lists’, rather than canceling them immediately, thereby helping banks (and therefore their end users), reduce the overall cost of fraud to an organization. As our CEO, Ricardo Villadiego, notes in the article, ‘”Fraud is a numbers game.” Since each reissued card costs the bank around $5, the expense of retiring a card may not be worth incurring until somebody starts misusing it. “Just because data has been compromised doesn’t necessarily translate to losses,” says Villadiego.’
While at first blush, consumers may not be excited about this, they are still protected from any fraudulent charges that occur on their cards. The truth is, customers too benefit from lower fraud losses. Banks don’t just absorb these losses – they must pass them off to the consumer in the form of some fees, or cuts in service, etc. So the more banks can do to reduce fraud losses, the better overall customer experience they can create.
Industry analysts highlight that larger banks are already doing this. As the article notes, “Avivah Litan, vice president at Gartner Research, says bigger banks often find it more cost-effective to keep watch lists—and to act only if things get ugly for them, and you.” If you’re an institution not already doing this, you are putting yourself at risk of incurring higher than industry-average fraud losses. And at the end of the day, consumers will vote with their wallets, and continue to choose the banks that can keep their costs down, and minimize the pass-through costs charged to their end users.
The full Fortune article can be found here: http://fortune.com/2015/06/26/bank-credit-card-hack/.
To learn more about Easy Solutions’ card monitoring services, visit: http://www.easysol.net/products/easy-sol-products/detect-monitoring-service.