Fraud management and revenue assurance – a natural fit for closer integration?

 

 

Five years ago, we predicted a trend towards closer integration between fraud and credit management. We didn’t dream this up ourselves – it originated from a forward looking operator. There is a natural synergy between fraud and credit: both are focused on the behaviour of customers and partners, both are interested in their consumption of products and services. But we were wrong: the trend didn’t materialise. Instead, the industry rallied around the idea of integrating fraud management and revenue assurance.

 

From an organisational perspective, there is a strong alliance between fraud and revenue assurance. In 60% of operators, fraud directly or partially reports in to the revenue assurance function. But there is nothing natural about combining fraud and revenue assurance systems and analysis. I have a friend who owns an Amphicar: it’s fun, but I wouldn’t want to drive it any great distance and I certainly wouldn’t use it to cross an ocean.

 

There are valid reasons for deploying an integrated fraud and revenue assurance system, just as there are valid reasons for owning an Amphicar. Mediation is a costly part of any operations or business support system, so only doing it once is a tremendous bonus; exchanging fraud cases and revenue assurance issues can improve the operational cooperation between the two functions; and sharing data storage – especially event data – sounds appealing. But fundamentally, the core detection mechanisms, processing timeframes and investigation techniques are different between the two domains.

 

The most compelling argument for integration is cost. The perception is that a combined system costs less. There are two possible reasons for this: the vendor has chosen to discount the licence based on you buying products for two domains; or one or both domains are a compromise. Two solutions from a single vendor will likely have the same cost benefits and it is

more likely that they are up to their respective tasks.

 

Regardless of whether you opt for an integrated system or two unintegrated or loosely integrated solutions, make sure you are really getting the best option for each. Deploying a fraud management system and, especially, a revenue assurance system is a costly and time consuming activity. No matter how badly it turns out, you are unlikely to be doing it again in the near future, so you need to make sure you will get a good return on your money rather than simply opting for the lowest purchase price.

 

The first step to saving money if you are new to revenue assurance is to use the information from the systems you are monitoring. In many cases, your network is already capturing and reporting on the information you need to assure it is functioning effectively. If you invest enough time acquiring sound domain knowledge of the network and supporting systems, you’ll be surprised how much revenue assurance can be done for minimal cost.

 

Finally, before investing in a revenue assurance system, ensure the revenue assurance team has sufficient technology domain knowledge and spend some time to make sure you are getting the most from what is available for ‘free’. If you decide to buy a system, a combined fraud and revenue assurance system may not the best option. A single vendor can help contain cost and reduce the burden of contract maintenance, it may also help towards a common look and feel, common mediation and cases and issue exchange. But don’t compromise on quality for the sake of the simplicity of dealing with one vendor. Spend some time to find the best system in each domain.

 

And I still believe that fraud and credit fit naturally together. There have been some encouraging signs over the last 12 months, but it has been a long time coming.