The long-term reputation gains of your company will be achieved through a combination of factors such as the quality of the products or services you offer, the experience of your staff, or the originality of the internal procedures they use. However, a little-discussed aspect, which could have a massive effect on your overall image and profitability, is the financial security you offer to your clientele. Have you been the target of a fraud attempt that resulted in substantial economic losses? Then, you can expect this action to have a domino effect on your reputation and make customers warier about doing business with you.

Preventing credit card application fraud and improving card fraud detection is necessary to maintain customer confidence and to be in line with the regulations imposed in your field of activity. Are you a company active in a competitive industry? Are your business rivals constantly investing in their products, and are your profit margins relatively low? In this case, your reputation will be the best advertisement you can hope for. The financial impact of a successful fraud attempt will pale in comparison to the reputational one, which, in the business world, is the calling card of all wide-reaching enterprises.

Using a credit card application fraud prevention tool is the only way to keep your customers' data intact, prevent breaches that will put you in the crosshairs of authorities active in your industry, and maintain legal compliance with your collaborators. Moreover, these kinds of card fraud detection programs act proactively and can flag fraud before it even comes to the attention of your staff. The result? Increased internal productivity, more time for product or service development, and enhanced market recognition.

It’s All About Your Image

Your company's reputation is the ticket to getting through a weaker market (hbr.org/2007/02/reputation-and-its-risks) period or navigating a financial quarter sprinkled with technical issues. However, if you lose this reputation and your brand image is affected, the long-term damage could be irrecoverable and significantly affect the financial prospects of your company. A successful financial fraud attempt that bypasses your company's security systems is, for lack of better words, nothing short of a disaster that will turn your firm into an untrustworthy venture.

An effective card fraud detection tool is a way to retain your clients' business and avoid fraudulent chargebacks that would require time-consuming disputes to resolve and affect your relationship with financial institutions. Moreover, a high-quality fraud prevention tool can be a way to keep your business operations at peak efficiency without having to worry about disruptions. Have you been the target of an attack? Then, in order to resolve the vulnerabilities, your business will need to be temporarily suspended. Have you detected such an attack proactively with a credit card application fraud prevention program? Then, your efficiency will be maintained.

What About the GDPR?

Financial fraud, and more specifically credit card application fraud, increased globally from 2021 to date by more than 25% (www.security.org/digital-safety/credit-card-fraud-report/). The monetary damage to businesses is increasingly significant, and the reputational losses felt by many companies have reached record levels. From data breaches to leaks and successful fraud attempts, it seems like every day, we hear about a new company facing a minor setback. The reasons for this usually have to do with improper implementation of effective financial security measures. Using a credit card application fraud prevention tool is the only way to minimize the economic and reputational impact of fraud attempts on your venture. However, that's not all.

Do you collaborate with European clients? Then, your business must comply with GDPR or other data protection laws that put your customers' interests first. Have you been the target of a financial attack using your clients' financial data? Have fraudsters impersonated your client and managed to steal significant sums? Then, by failing to safeguard your finances and prevent illegal access to information, you could be penalized, both reputationally and legally.  Companies operating at a high level are obliged to use professional methods to ensure the security of personal information, including credit card data.

Did fraudsters obtain financial information from your customers through a vulnerability of your systems? That will have repercussions. Have financial data been obtained from elsewhere but used to conduct fraudulent transactions on your site? Then, by failing to detect this type of fraud, you could suffer. If the products or services purchased are delivered to the buyer, but the bank then operates a chargeback at the request of the credit card owner, you will be left without the product and money. Can the situation be resolved? Yes, but it will take time, and it won't be easy.

What If I am Active in Finances or Healthcare?

The GDPR states that businesses are obliged to contact their customers for any breach of security and are accountable for any action in which the financial safety of clients is put at risk. Has your European client's financial information been used for fraudulent transactions, or worse, has their data been stolen from your website? Then, you will suffer financial penalties. But things can get even more complicated if you are an organization active in finance or healthcare. Are you a bank, a private lending agency, or an insurance company? Then, failing to prevent financial fraud at all times could land you in the crosshairs of the CFPB or the FTC.

Have you failed to comply with the Payment Card Industry Data Security Standard? Then, you could be penalized directly by the credit card companies. Are you active in healthcare? Then, a successful fraud attempt that bypassed your security systems could be considered a violation of the HIPPA or HITECH Act. Can you dispute the penalties you received? To take legal action and prove your innocence? Sure, but the process is long, and in some cases, your responsibility might not be perfectly defined. Preventing fraud before it has a visible effect is the best way to avoid unpleasantness down the road and maintain reputation, profitability, and efficiency.

The Wisest Choice You Can Make

Your business reputation is a bargaining chip and a tool you can use to overcome periods of less favorable financial efficiency. Has your industry been affected by a scandal? The demand for your products has fallen? Then, the reputation you enjoy might be the only asset you have at your disposal to get you through less pleasant times. But all that can change if you are the target of a fraud attempt. Have your services been accessed through fraudulent means? If so, this could lead to economic, legal, and reputational consequences, which are avoidable if you use a card fraud detection application.

Using a credit card application fraud prevention tool is the best way to keep the profitability of your venture at a high level, sustain the efficiency of your employees, and get in line with the regulatory practices active in your field. The use of such a tool, if you are a nationally or internationally active company, is not a recommendation but a requirement that could be essential for your long-term success. Fraud prevention tools are a staple of well-managed businesses, and nowadays, it is uncommon to find a company that doesn't use at least one such card fraud detection program.