42% of Issuers Say Fraud and Disputes Are Driving Up Costs

Cybersecurity Pain Points

36%

Percentage of issuers citing cybersecurity and network threats as significant pain points, an increase from 30% last year.

Churn Prediction Analytics

51%

Percentage of high CLTV issuers using analytics to predict churn.

Investment in Scam Prevention

45%

Percentage of high CLTV issuers planning to invest in scam detection and prevention within the next 12 months.

§ 01 Executive Snapshot

What: 42% of issuers report that fraud and disputes are increasing operational costs.
Who: Card issuers, including both bank and non-bank entities in the U.S.
Why it matters: Rethinking fraud prevention as a growth strategy is crucial for maintaining customer trust and reducing churn in a competitive market.

Thirty-six percent of issuers now cite cybersecurity and network threats as a significant pain point, an increase from 30% last year.
Fifty-one percent of high customer lifetime value (CLTV) issuers use analytics to predict churn, compared to only 35% of low-CLTV issuers.
Forty-five percent of high CLTV issuers plan to invest in scam detection and prevention within the next 12 months.

Historically, fraud prevention was seen as a back-office function; however, it is now recognized as essential to customer experience and retention.
The rise of agentic commerce and AI-driven consumer interactions necessitates stronger fraud controls to maintain trust in transactions.

Immediate market consequences include a shift in how issuers allocate resources towards fraud prevention as a strategic growth tool rather than a cost center.
Long-term implications involve the integration of AI and analytics in fraud prevention strategies, enhancing operational automation and customer retention.

Potential risks include evolving cybersecurity threats that could outpace current fraud prevention measures.
There is competition among issuers to adopt advanced fraud prevention technologies, which may strain resources for smaller players.

Upcoming developments to watch include the implementation timelines of new scam detection technologies by high CLTV issuers.
Future shifts in issuer strategies towards fraud prevention could indicate industry trends in customer relationship management and operational efficiency.

§ 07

What percentage of issuers report that fraud and disputes are increasing operational costs?

42% of issuers report that fraud and disputes are increasing operational costs.

Who are the issuers mentioned in the article?

The issuers include both bank and non-bank entities in the U.S.

Why is rethinking fraud prevention important for issuers?

Rethinking fraud prevention is crucial for maintaining customer trust and reducing churn in a competitive market.

How are high customer lifetime value issuers approaching fraud prevention?

Fifty-one percent of high CLTV issuers use analytics to predict churn and plan to invest in scam detection and prevention within the next 12 months.