Is building a fraud solution in-house or buying an existing fraud prevention solution better for your company?
Online payment fraud losses are anticipated to exceed $206 billion in the coming years. To combat fraud better, you need the right fraud-specific tools. With many solutions on the market, companies can struggle to understand which is best and whether it is better to build solutions internally.
The essentials of fraud prevention
Businesses in every industry and sector lose millions of dollars annually to fraudulent schemes, making fraud prevention a crucial concern for every company. Whether you choose to purchase fraud prevention or build a proprietary system, there are five key capabilities every fraud prevention system needs to include:
- Data capture
- Machine learning
- Easily configurable workflow and rules automation
- Streamlined analytics and feedback tools
- Clear and readily actionable reporting
Even when presented with these key factors, many companies remain unsure whether to buy or build, potentially leaving them unprotected long enough for fraudsters to target their organization. Knowing the critical aspects of each option is the key to deciding which is the better choice for your business and protecting your bottom line as soon as possible.
Understand the difference between building and buying
To make an informed decision, first, you need to understand your industry, your IT architecture, and the threats that fraud presents to your organization. For example, how robust is your IT architecture? Can it handle the changing needs of your business? Look at your user interface and the skill sets available on your team. Are your production frameworks fluid? Are your vendors strong technically?
Next, ask yourself these questions:
- Does your business have the expertise in-house, or will you need to find a managed solution?
- Does your organization have the budget, fraud tools, and commitment to building a solution? (Remember that building solutions may initially seem less expensive on paper.)
- Can you build the solution over time, or do you need to go to market immediately?
- Do you need a short-term fix or a long-term organizational plan and platform for the future?
- Does your organization have sufficient fraud source data to provide an accurate analysis?
The answers to these questions will help you to create a case for either building or buying. Each option should always include a use case, budget, and timeline.
The business case for building
Your business will have a strong case for building if it meets these criteria:
- You have all the proprietary data you need and do not need to go outside your organization.
- Your business needs are so unique — due to your business model, regulatory requirements, or specific risks — that there are no suitable customizable fraud solutions or tools available on the market.
- Your business has expertise and confidence in mitigating your unique risks and following regulatory compliance requirements.
- You have enough competitive advantage in your market or domain to do everything in-house.
- You have a contingency plan that would not cause a loss of performance or failure to meet strategic goals. This plan may be to continue the build-out or eventually incorporate third-party solutions. In addition, your business can readily accommodate customizations promptly as new needs arise.
- You have the expertise to build and maintain the compliance and regulatory requirements to feed your proprietary solution.
The business case for buying
You should consider buying off-the-shelf fraud solutions if you need an easy, efficient, timely implementation that will not take several weeks or months. If your business needs key performance indicators (KPIs) and reporting to be straightforward, then buying may be more beneficial.
Your business will have a strong case for buying if it meets specific criteria.
- If your fraud prevention solution needs to be flexible enough to scale and expand as new risk needs arise and your business faces evolving fraud threats.
- If you need a customizable fraud solution and tools that you can implement quickly.
- If you need technical support and guidance available on-demand throughout the installation and onboarding processes.
- If you want built-in automation for workflows and reporting, increasing your team’s efficiency and optimizing internal processes.
Another criterion to consider is that you want machine learning to do the work of data analysis and assessment, freeing your team to focus on other priorities.
Additionally, if your business has specific capital expenditures with security requirements that must be followed or needs features that require a particular skill set not available internally, then you should consider buying.
Fraud.net Can Help
So, which is better, buy or build? Or both? When you choose Fraud.net, you get the best of both options.
We offer an off-the-shelf solution powered by the latest AI innovations that are cost-effective, easy to implement, customize and use. To fit your non-singular scope, growth, and changing needs, Fraud.net has customizable fraud solution templates and standards, including fraud detection and data-driven prevention technology features. Not only will it detect fraud, but it will automatically prevent such transactions from occurring.
With our renowned experts here to help, you’ll have access to 24/7 tech assistance via email or Slack whenever you have a question. Our team of fraud prevention specialists also offers advisory services if you need help configuring our product or assessing your risks.
With Fraud.net as a partner, you’ll have direct access to our unparalleled expertise so your IT department can focus on other mission-critical tasks.
Want to learn more about Fraud.net’s award-winning, comprehensive fraud detection platform? Get started with us today!