With an increasing percentage of cybercrime and threat to businesses, this question becomes necessary especially for business owners- “what is the strategy for fraud prevention?” In this fast-paced world, it is essential to have a strategy for business development, and for fraud prevention too to keep the business safe of evil practices.
Nowadays, businesses of all sizes either practice all of their functions in-house or choose outsourced services. There are different grounds for choosing in-house or outsourced services, but when we talk about fraud prevention, which would be better, in-house or outsourced?
Organizations generally have an assumption that in-house is the best option to look for however, it is not true! Even outsourced functions can be productive and sometimes safer than in-house. Let’s take a glance at the pros and cons of both in-house and outsourced services to check which is better for your business fraud prevention:
In-house fraud-prevention solution:
Implementing in-house fraud prevention needs a budget and not every company can afford it. However, when companies consider data safety and complete control over all systems, in-house practice is significant than outsourcing services. Let’s look at the pros and cons of in-house fraud-prevention solutions to get an understanding if it makes sense for business:
- Maintaining business process in-house acts as the process control. It is authority over business orders, services that reach customers, review management, etc. and these keep the business access in-house, preventing possibilities of fraud, which is more with outsourcing.
- Companies do not feel comfortable involving an external partner into a customer-business relationship and an in-house service helps to make merchants comfortable.
- Preventing fraud possibilities is best with in-house agents at work, as they understand the business service reducing risk possibilities.
- Having services in-house, data remains within the business premise making it easier to avoid fraud disputes. Moreover, companies for which data processing is crucial, it is even more essential to opt full data privacy and perform operations in-house.
- Not taking external support, the staff that takes care of fraud prevention tools in-house get to know the business service deeply. Moreover, in-house agents are available whenever needed and thus are more beneficial.
- In-house services are a tailored system and meet business-specific needs.
- Having in-house solutions for business fraud prevention, upfront costs exceed, and in-house agents have to consider several tasks on their own. This demands huge capital investment and time.
- Hiring a team of cybercrime professionals for fraud prevention is tiring and tedious and may take a lot of time and money. Moreover, staff attrition is an issue, which companies cannot avoid.
- Implementing cybersecurity solutions is a nice idea, however, taking it forward as the business progresses is challenging. The burden of maintenance is hard and not all businesses have adequate resource and budget to afford to establish a permanent team for fraud prevention.
Outsourced fraud prevention solution:
We are taking you across the pros and cons so that before jumping in to apply a solution, you are aware of the possible threats and perquisites. Outsourcing services for fraud prevention is not a negative option always, and has both pros and cons as discussed below:
- Data precision plays a crucial role when we talk about fraud avoidance. The better the data is the more accurate results! Since external partners get data from various sources, it helps to make the business attain higher success rates.
- Outsourcing provides an adequate professional partner to the business according to requirement and reduces upfront costs to the minimum, making outsourced services more cost-effective.
- Outsourcing also helps with reduced oversight, as the professionals have to monitor operations, rather than being busy performing all the functions.
- Outsourcing fraud protection service, a business can use advance fraud protection software and other innovative techniques within budget.
- Hiring an external fraud prevention tool for the business, companies need to make sure that it is accessible with their business system. Integration to a business system can be difficult and thus it is essential to keep a check that the technology plays nice with other business requirements.
- Lack of transparency with an outsourced fraud prevention solution is a major concern. It becomes more obvious in the analysis and classification process of customer data.
- Outsourcing fraud prevention service makes it hard for the business to get services that they actually require. A tailored system is not accessible to businesses making it hard for them to work as per their necessity.
Irrespective of numerous drawbacks of outsourced fraud prevention solutions, it is still the most desirable in the market with its cost-effective benefit. Around 43% of business financials’ believe they look forward to outsourcing their fraud prevention solutions as they find it more effective.