I just got back from the Merchant Risk Council Fall Platinum Meeting in Chicago. It was an incredibly interesting event with fascinating speakers and content. One of the themes that kept arising in conversations with merchants is the intersection between security and privacy.
Fraud managers are used to clashing with different departments in their organizations in order to push ahead with their agenda. Probably the most traditional conflict is between fraud and marketing teams. Fraud managers are incentivized to keep fraud rates low and this often can be achieved by adding some extra friction to users. Marketing will forever be opposed to friction.
While this internal battle will probably always continue, we are seeing a new organizational battle commence between fraud managers and legal departments.
Unfortunately, many fraud and legal teams can have competing agendas within a company. Some of the inherent reasons for this conflict include:
- Fighting fraud relies on historical data and profiling consumers. Legal can see this type of information as a liability.
- Fraud teams benefit greatly from sharing negative and positive lists with other companies. Legal teams will often see this as a privacy violation.
- A lot of the emerging tools for fighting fraud involve tracking user behavior. There is a ton of legislation around the legality of this and many legal teams are wary of walking the line.
These battles — marketing v. fraud and fraud v. legal — will only continue if organizational goals are not aligned. For example, I talked to one company where marketing is incentivized by the number of signups (real or fake). Metrics like these will always create conflict with fraud teams. Legal teams also need to be educated about the cost of fraud to understand the monetary cost of not taking advantage of some fraud fighting technologies.
Ultimately, management needs to do a better job of aligning organizational goals and avoiding competing agendas. Otherwise fraud teams will be spending more time arguing their agenda and less time finding ways to combat fraudsters.