Trust is the ultimate differentiator in banking. When customers choose a financial institution, they’re placing their financial security in its hands. And few situations test that trust more than fraud.
Today, financial institutions are in a constant race against increasingly sophisticated fraudsters. Financial institutions have long focused on fraud prevention, and rightfully so. But many overlook the fact that fraud and dispute resolution is just as critical—if not more so—for maintaining customer trust and loyalty.
It’s time to stop viewing fraud and dispute resolution as an operational burden and start seeing it as a strategic business advantage. A well-executed resolution process rebuilds trust and reduces financial losses, protecting a bank’s revenue.
But to turn fraud and dispute resolution into a competitive edge, financial institutions must first understand what customers expect from their FIs when fraud happens. An early look from our upcoming Trust in Banking Consumer Study uncovers some key learnings.
New research: What really breaks trust for fraud victims?
Our Trust in Banking Consumer Study reveals that a financial institution’s fraud response plays a major role in shaping customer confidence. In fact, 62% of customers said that the way their FI handles the resolution process has a greater impact on their trust than the fraud incident itself.
This might be surprising, but many consumers understand that some level of fraud is unavoidable in today’s world. What’s non-negotiable is how their financial institution responds in a fragile moment that leaves them feeling extremely vulnerable.
The key to effective fraud resolution: Balancing speed and transparency
If and when fraud occurs, customers want reassurance that their bank or credit union is acting in their best interest. A few key factors stand out, and one of the most important is speed, with 71% saying they would lose trust in their financial institution if the resolution process took too long.
Yet, resolving fraud quickly means little without fairness and transparency. Striking that balance between speed and due diligence is critical. The financial institutions that get this right will be the ones that earn and sustain the strongest customer trust.
The fraud resolution opportunity:
Poor fraud resolution frustrates customers and can jeopardize the entire financial relationship. When disputes drag on or communication is unclear, customer trust will erode.
The flip side is that when done well, an effective fraud response can turn a customer’s crisis into an opportunity to deepen loyalty. In fact, fraud resolution could be your next competitive advantage, and there are two ways that getting it right can positively impact the bottom line:
1) Boost customer loyalty and retention
Quavo’s upcoming research study confirms the link between strong fraud resolution and retention, with 73% of customers saying their FI’s fraud handling directly impacts loyalty. This is especially important in today’s competitive environment, where customer stickiness is more difficult to maintain, and customer behavior further fragments the market.
2) Protect revenue by improving a financial institutions’ recapture rate
Beyond strengthening trust, fraud resolution also protects revenue. Many financial institutions treat disputes as an unavoidable loss line, but with the right automation and strategy, they can recover funds that would otherwise be lost.
This is where the recapture rate comes in—the ability to reduce financial losses by optimizing dispute resolution at every stage. By streamlining processes and guiding users toward the best outcomes, FIs can turn what was once a cost burden into a revenue-saving advantage.
Are your internal dispute processes hurting customer trust?
Financial institutions face a constant balancing act between regulatory compliance, cybersecurity, and digital transformation. With so many competing priorities, fraud resolution often becomes an afterthought—despite its core role in maintaining customer trust.
Too many financial institutions still rely on outdated dispute resolution systems that weren’t built for today’s fraud landscape. These “band-aid solutions” create inefficiencies that become deeply ingrained over time. Without modernization, fraud resolution remains slow and inefficient, hurting operational efficiencies and the bottom line while harming customer trust.
That’s why more FIs are turning to Quavo’s QFD to streamline the entire dispute lifecycle, from intake to resolution. That translates to stronger customer loyalty and up to a 50% reduction in losses, making fraud resolution a true competitive edge.
Financial institutions are able to better manage their customer dispute process with a self-service intake portal that provides real-time notifications and clear claim status visibility. This not only builds confidence and trust but also streamlines case management and reduces overhead costs.
Putting fraud resolution first: A win for your customers and your bottom line
Customers have made it clear: how a bank or credit union responds to fraud matters more to trust than the fraud itself. Financial institutions that treat fraud resolution as a strategic priority can turn it into a business driver.
That starts with strengthening fraud resolution by focusing on speed and transparency. A modern approach doesn’t just rebuild trust—it makes internal teams more efficient, improves customer loyalty, and directly impacts the bottom line by increasing a FI’s recapture rate.
And there’s even more to uncover. Additional insights from our Trust in Banking Consumer Study will take a deeper dive into how fraud resolution influences customer satisfaction, retention, and long-term engagement. Stay tuned for the full report.
