The Growing Field of Fraud Prevention: Insights and Career Opportunities

Hi Everyone,

I would like to draw your attention to some key insights from two comprehensive reports, shedding light on the importance of fraud prevention as a burgeoning field with substantial job prospects. The original reports can be accessed through the link provided at the end of this post.

Firstly, let's consider a couple of significant events from the previous year that remain highly relevant. Retail e-commerce sales surged to a staggering $5 trillion, with projections indicating a further increase to $8 trillion by 2026. Furthermore, the percentage of shoppers making cross-border purchases rose from 69% in 2019 to an impressive 76%.

These statistics affirm that online shopping is not a passing trend, as consumers are willing to make purchases from international vendors, even if it means enduring longer delivery times in exchange for lower prices. From a fraud prevention perspective, this highlights the escalating number of non-domestic payments and the rise in the use of lost or stolen cards for purchasing goods that can be resold in the future. Notably, refund fraud is becoming increasingly prevalent.

However, many businesses have adapted their rules to accommodate these challenges. One such positive development is the gradual disappearance of restrictions on using payment methods that do not match the account country.

As cross-border purchases continue to proliferate, alternative payment methods are also on the rise. Current global statistics indicate that an average of four payment options are now available on merchant platforms. Additionally, open banking payment transactions are projected to surpass $330 billion globally by 2027, leading to a greater diversity of alternative payment methods.

As companies embrace these methods, they are also becoming more aware of the associated risks. For instance, direct banking payment methods present unique challenges as they lack refund capabilities, while Buy Now Pay Later (BNPL) options introduce their own set of risks. This convergence of factors positions fraud prevention as an excellent career opportunity.

Numerous companies, particularly in the Fintech sector, are actively seeking fraud experts for the present and future. While the tech industry has experienced job cuts, the demand for fraud experts remains robust. Furthermore, countries in the rapidly expanding Latin American e-commerce market, such as Mexico and Brazil, are anticipated to increase their fraud prevention teams by over 20%. Australia is also actively looking to expand its fraud teams by a similar margin. Worldwide, less than 3% of merchants are expected to downsize their fraud prevention departments. If you are contemplating which industry to pursue, I strongly recommend considering fraud prevention as a promising path.

Typically, fraud teams work collaboratively across various departments, including Engineering, Finance, and Marketing. As fraud becomes an increasingly captivating topic within organizations, certain departments, such as Data Science and Engineering, are also experiencing growth. This expansion is driven by the implementation of tools dedicated to fraud prevention. Most companies utilize a combination of internal and external solutions.

Notably, there is a clear correlation between rising fraud figures and an increased reliance on external providers, which can be costly and strain budgets. Machine learning (ML) emerges as the most expensive option. In the context of fraud prevention, ML is often utilized in conjunction with rule-based systems. It is important to note that not every company requires an internal ML solution; in many cases, external ML solutions are more effective and cost-efficient.

However, larger organizations that exhaust their budgets on external solutions may ultimately benefit from implementing an in-house solution and gradually upgrading it. Although this transition may not occur immediately due to the necessary adjustment period, it proves to be the optimal long-term approach. Consequently, we observe the growth of Data Science and Engineering teams within the realm of fraud prevention.

If you still harbor doubts regarding the value and contribution of fraud prevention to businesses, let me emphasize one final point highlighted in these reports: chargebacks. This subject is widely recognized within the industry, and anyone involved in payment processing is familiar with it.

According to data from Mastercard, the global volume of chargebacks reached a staggering 615 million in 2021, resulting in an estimated cost of approximately $117 billion (based on an average chargeback cost of $191). While most merchants handle chargebacks internally through their fraud teams or dedicated dispute management teams, the global average for successfully challenging chargebacks stands at 44%, with an average success rate of 60%.

These figures serve as a strong impetus to hire more fraud experts and establish dispute management teams focused on effectively handling chargebacks and recovering funds for the company. By combining proactive prevention measures with an efficient dispute management strategy, companies can significantly impact their key metrics.

For those seeking a fulfilling career path with meaningful impact, the field of fraud prevention offers immense potential. The convergence of technological advancements, evolving payment methods, and the persistent threat of fraud make it a dynamic and rewarding domain. By joining the fight against fraud, you can contribute to safeguarding businesses, fostering trust among consumers, and driving the growth of the digital economy.

Please find the link to the original reports below for further information.

• Fraud detection specialists in short supply as industry plans hiring push
• Global fraud trend

Thank you for your attention.

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“The views and opinions expressed in this article are solely my own and do not express in any way nor are endorsed by my employer. They are not based on my experience as an employee of Bumble”