5 Tips for Building an International Fraud Mitigation Strategy

Businesses have different strategies depending on if they’re marketing their product domestically or internationally. The same holds true for fighting fraud– the way a business handles the fraud they encounter will change depending upon which countries they operate in.

For businesses thinking about international expansion, the differing rules and regulations around customer information, time zones, and more can make creating international fraud mitigation plans difficult. Use this tips as a starting point for your international fraud mitigation strategy:

1) Take language and local time zones into account.

First things first: fraud mitigation relies heavily on triaging the fraud that your business encounters. Not all fraud will be equal, and some attacks will have horrific, business-ending consequences that will need to be immediately addressed and investigated.

It’s critical that your business has a security team located in the country that you’re looking to expand in. This is so that the team can immediately respond to any critical threats and report them to the local country’s government, if applicable. 

In addition, if you’re expanding into a country that has a native language other than the language spoken in the country you’re headquartered in, it’s best to hire individuals who speak that language as their primary language. While some businesses may choose to hire translators or individuals who are bilingual and based in your current location, there are risks associated with this.

Translators are an added expense, and they also can severely slow down the team– which could be detrimental during a critical time. And individuals who are bilingual but not located in the new location could run into issues around not being in the same time zone or not having access to tools that would be necessary to report issues. For example, countries like China limit access to certain applications that would be available in other countries. This could make knowledge-sharing and collaboration difficult, especially during something as time-sensitive as fighting fraud.

2) Leverage tools in tandem with your security team.

With inflation rising, it can be tempting to rely on your existing domestic security team or tools to fight fraud in your new location. It’s important to keep in mind that fraudsters are nothing if not opportunistic, and the larger and more successful your business is makes you more of a target. 

The most successful fraud mitigation strategies involve security teams and fraud deterrence tools working together. For most businesses, this means selecting a document identity verification solution that is capable of verifying government-issued IDs globally. By relying on a tool to automatically and instantly verify identities, security teams will have more time to focus on the fraud that can do the most damage to your business– fraud caused by hackers or employees.

3) Make informed decisions using data.

The right tools can also help beyond freeing up your security team’s time. They can give your teams valuable information on the types of fraud that your platform is facing the most. For example, if the majority of fraudsters are rejected for having underage IDs, then your team could have additional reviews for IDs that are just above the age cutoff as an added security measure.

Information like this enables security teams to know where to focus the majority of their efforts to deter fraudsters with similar behaviors from targeting the company again. Fraud is an eternal cat-and-mouse chase, and fraudsters will always work tirelessly to gain access to company information.

4) Understand differing laws around how you can fight fraud.

A key facet of a successful fraud mitigation plan is one-to-one mapping– tying each user’s digital identity to their physical, real-life identity. While businesses in most countries find the most success using government-issued IDs and real-time selfies for one-to-one mapping verification, some countries will be more stringent on how identities can be verified.

For example, the General Data Protection Regulation (GDPR) in the European Union has specific requirements for how personal data– such as someone’s ID, first name, etc– must be handled. This means that businesses who store ID information to prevent duplicate accounts from being created will need to make sure they communicate that to their customers in the EU– and give them the option to have this information deleted.

Make sure your fraud mitigation plans aren’t violating laws in other countries before expanding beyond your current location.

5) Conduct consistent employee training sessions.

Employees are one of the three most dangerous bad actors that can cause the most financial harm to businesses. Employees have access to many different files that contain sensitive data, including passwords, financial information, and more. This access makes internal fraud protocols critically important– both to prevent disgruntled employees from leaking sensitive information and to protect employees from fraudsters who could target them.

While all businesses should conduct regular employee training sessions around how to spot scammers and what internal fraud protocols are, it’s especially important to schedule these training sessions during a period of international expansion. 

While an international expansion is a wonderful growth period, the internal chaos that can result during this time can create an opportunity for employees and fraudsters alike to take advantage.

Fraud will always be something that businesses will have to contend with, especially as the business grows and becomes more profitable. Use these tips to stay protected against fraudsters as your business grows internationally.