Exploring the CARTA Approach to Fraud and Risk Management

Digital transformation in banking and transactions continues to grow with no signs of slowing. Unfortunately, so does the rate of fraud across digital channels. In fact, fraud is evolving alongside new technologies, often using the very same tools and techniques to commit fraud that companies use to detect and prevent it. This not only complicates security and risk management for banks and merchants but also forces companies to continually monitor and adapt their strategies to protect against evolving fraud techniques.

Research firm Gartner believes that modern fraud management requires shifting to proactive fraud detection and prevention. Gartner developed the CARTA approach that goes beyond single-point risk assessments to encompass continuous fraud prevention and detection across a customer’s journey on all channels. Using this approach, companies can prioritize customer lifecycle fraud protection to forge stronger relationships and keep security at the forefront.

What Is the CARTA Approach?

Continuous and Adaptive Risk and Trust Assessment, or CARTA, takes a proactive approach to fraud detection and prevention by steering away from one-time risk assessments (e.g. point of login, point of payment, etc.) in favor of total customer lifecycle fraud detection.

A recent Gartner report estimates that by 2024, more than a third of digital commerce merchants and banks will have implemented a CARTA approach to fraud prevention, compared to less than 5% in 2019. The goal of conducting ongoing assessment across channels is to reduce fraudulent transactions, reduce false positives, and improve overall customer retention.

Fraud Detection Benefits Using CARTA

CARTA serves to bolster the weaknesses left behind by traditional fraud management techniques. 

One of the most common failures in fraud detection is the lack of coordination between channels, especially across multiple vendors. When multiple channels of interaction are available, which is increasingly the case in an omnichannel-driven environment, information silos can lead to missed opportunities to stop fraud and the potential to decline good customers. 

CARTA trades the serial approach for a parallel one so that fraud can be viewed holistically rather than in single events. This allows organizations to break down information silos and share data across channels and reach a decision on how to proceed. What’s more, CARTA reveals risks in real time to assist in timely decision-making.

Taking the CARTA Approach to Your Fraud Prevention Strategy 

Gartner’s CARTA approach to fraud prevention and detection requires companies to continuously assess both risk and trust factors across a series of events. 

For merchants and banks, this may include understanding the specific device being used to conduct a transaction or the location of the user. As the levels of trust and risk are assessed at each event, they can be compared to historical data and predefined thresholds to enact appropriate action in real time. 

DataVisor’s comprehensive fraud detection platform supports the CARTA approach by holistically and continuously analyzing data across all channels. Moving beyond single-point assessments allows banks and merchants to incur fewer false positives, deliver frictionless experiences for good customers, and promote total customer lifecycle fraud protection. 

Download The Dummy Handbook on Account Protection to learn more!