Battle of the Budget: Prioritizing Scam Classification for Future Cost Savings
- Date:February 27, 2025
- Author(s):
- Suzanne Sando
- Report Details: 12 pages, 2 graphics
- Research Topic(s):
- Fraud & Security
- Fraud Management
- PAID CONTENT
Overview
A lack of resources and disorganization are two major roadblocks to mitigating the effects of scams. Financial institutions already fight to get enough budget allocation for fraud and scam prevention strategies. Thus, the overhaul of an FI’s legacy procedure for scam tracking, however inefficient or inaccurate, often is not prioritized. It’s not that FIs don’t want to be accurate in tracking scam threats, but too many hurdles sit between an FI’s good intentions and the practical application of an industry-standard classification system.
Without a way to fully grasp the impact and damage of scams on U.S. consumers, FIs cannot effectively allocate annual budget toward improving processes and procedures. Improved tracking of scam incidents leads to clearer understanding of the biggest threats to consumers. These improvements position FIs to more advantageously prioritize system enhancements to not only identify scam trends and thwart serious attacks but also strengthen relationships with customers and members.
Key questions discussed in this report:
- What hurdles do financial institutions face in adopting a model like the Federal Reserve’s ScamClassifier model?
- How should financial institutions better align modest fraud budgets to mitigate scams?
- How can better scam classification and tracking processes improve consumer trust and confidence in their financial institutions?
Companies Mentioned:
Federal Reserve Bank, Federal Reserve Financial Services
Learn More About This Report & Javelin
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