The Cat and Mouse Game: Why card issuing risk management must evolve

Card issuing has become an essential growth strategy for brands diving into the fintech space. This whitepaper helps sponsored programs go from 0 to 1 in fraud and transaction monitoring.

Card issuing has become an essential growth strategy for brands diving into the fintech space and banks to grow revenue through partnerships. With the sector's revenues on a sharp rise, projected to triple by 2024 from 2021, the potential is vast.

Yet, this growth comes with its set of challenges like regulatory risk, AML compliance and fraud, which is expected to soar to $49.32bn by 2030 due to the digital shift in e-KYC and rapid onboarding processes.

This whitepaper helps sponsored programs go from 0 to 1 in fraud and transaction monitoring.

  1. Fraud Challenges: The convenience of digital onboarding has led to an increase in identity theft, scams, and account takeovers.
  2. Friction vs. Fraud: Issuers face the dilemma of balancing user experience with the need for security measures to combat fraud.
  3. Digital Vulnerabilities: The move to digital has exposed outdated fraud detection models, requiring a more integrated approach to fraud and anti-money laundering (FRAML).

We also walk through the Top 10 Card Issuing Fraud Typologies and Prevention Strategies:

  • Card Present Fraud: Combat with EMV chip technology and vigilant monitoring of POS systems.
  • Card Not Present (CNP) Fraud: Use two-factor authentication, CVV verification, and advanced fraud detection algorithms.
  • Identity Theft: Implement biometric authentication and robust digital identity verification processes.
  • Account Takeover: Employ device and behavior analysis to detect anomalies.
  • Application Fraud: Leverage AI and machine learning to identify synthetic identities and falsified applications.
  • Card Skimming/Shimming: Enhance security with EMV technology and monitor for digital skimming attempts.
  • Synthetic Identity Fraud: Utilize comprehensive data analysis tools to detect mixed real and fake personal information.
  • Scams (Phishing, Romance, etc.): Educate customers and use behavior analysis to identify unusual transaction patterns.
  • Friendly Fraud: Apply sophisticated user behavior analytics to differentiate between genuine and fraudulent disputes.
  • Rapid Account and Virtual Card Creation: Monitor for unusual activity patterns associated with fast account creation and use.

How can fintech programs get world class compliance without integrating 10+ vendors?

The integration of multiple fraud prevention solutions poses significant challenges, often leading to inefficiencies. A streamlined approach, focusing on the integration of comprehensive data and advanced analytics, can significantly enhance fraud detection and prevention capabilities without compromising the user experience.

For a full breakdown, download the whitepaper today.

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