Development of a Total Cost of Fraud Model
Client
- A leading global electronic payments network
Challenge
- Develop a tool to measure the true cost of fraud in card issuing and acquiring
- Improve fraud risk management and business decisions
Engagement
- Established common analytic framework and standard process for identifying and allocating all costs associated with fraud in the payment system
- Conducted a regional benchmarking study among 10 issuers and acquirers to validate the applicability of the methodology against the stated objectives
- Assessment framework and financial model developed to allocate payment system costs
Among the engagement results, the framework helped identify recommendations for one member bank to reduce fraud-related opportunity costs by more than US$5.8M.
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