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As a business grows its online transaction volume, it becomes a bigger target for fraudsters. Eventually, every merchant hits a tipping point where they can no longer ignore the need to know when it is time to hire a fraud analyst to prevent eCommerce fraud.

However, it’s a tricky question to answer. Hire too early and you risk diverting resources away from scaling the core business. Hire too late and a high chargeback volume can do big damage to revenues, or even land you in the “high risk” merchant account program. 

You must also consider the responsibilities you want your fraud analyst to assume and the specific role to hire for. With so many factors to consider, it’s difficult to know the right time to act.

Below, we answer some of the most frequently asked questions about when it is time to hire a fraud analyst.

10 FAQ About When It’s Time to Hire an Ecommerce Fraud Analyst

What skill set and education should a fraud analyst have?

An analytical mind is one of the most important skills needed for the role. Fraud analysts analyze data like transactions, revenue, and chargeback rates. As a result, most merchants (and even some eCommerce fraud vendors) require a bachelor’s degree in a quantitative field such as Mathematics or Statistics and Computer Science. In addition, previous data analysis experience is preferred except for entry level roles.

What non-technical qualities should a fraud analyst have?

In addition to hard science and analytical skills, look for ‘intangible’ qualities as well. For example, statistically insignificant patterns sometimes turn out to be an early sign of a new fraud technique. An analyst with a flexible and open mind can sometimes notice these patterns and preemptively change a merchant’s eCommerce fraud prevention strategy before a large scale attack occurs.

What kind of commitment does a fraud analyst need to have?

Ecommerce is always open, and orders must be reviewed during nights, weekends, and holidays. A quality fraud analyst will work during peak holiday sales periods, long weekends. In addition, they will often need to put in overtime. Merchants should hire someone willing to make this commitment.

What are the general responsibilities of an eCommerce Fraud Prevention Analyst?

Typically this position is generalized with the analyst handling several fraud prevention aspects simultaneously. They will likely manage one or several fraud vendors such as Signifyd or Kount, and/or several data providers such as Emailage or MaxMind. They will also need to review orders and identify fraudulent transactions on a daily basis. Finally, eCommerce fraud analysts also need to review, analyze, and take corrective action on all fraud notifications and escalations.

What responsibilities does a fraud analyst have for a merchant with an in-house solution? For an external solution?

Analysts working with an in-house solution typically manage fraud prevention tools and manual order reviews, handle chargebacks and representment, analyze payment and transaction data analysis, and conduct general performance analysis. Analysts working with an external solution will find that many of the top eCommerce fraud solutions available today handle the entire order funnel. In these cases, their role is to manage the solution as much as it is to screen for fraud.

What are the responsibilities of a card and payments analyst?

This position deals primarily with fraudulent transactions and chargebacks. In general, a card and payments analyst manually review transactions for fraud, identify new fraud trends, and dispute chargebacks. Their ultimate focus must be revenue retention. Merchants with high sales volume and chargeback ratios should hire for this role.

What are the responsibilities of a data analyst?

This is a more generalized analyst position that mirrors a business analyst role. Data Analysts work specifically with eCommerce transaction data in order to support the Payments and Ecommerce departments. Their work validates decisions and risk management approaches. It’s also an invaluable tool to gather new insights in order to identify sub-optimal payments/fraud processes. 

How much does a fraud analyst make?

The average salary for a fraud analyst varies depending on several factors (location, seniority, type) but the median annual salary for a Junior level Fraud Analyst in the US is $41,394 according to Glassdoor. While the salaries for senior fraud analysts roles typically averages around $45,369 (again according to Glassdoor).

What fraud analyst courses exist?

As a merchant you want your employees to be up-to-date on the latest technologies and industry accepted knowledge. There are several fraud analyst courses offered on Udemy that can be taken to enrich existing knowledge and expertise. There is also a certified course offered Association of Fraud Examiners called the CFE (Certified Fraud Examiner) however this may not necessarily cover eCommerce related topics.

Where can you find good candidates for a fraud analyst role?

As a merchant, if you do decide to hire a dedicated fraud analyst. Merchant Fraud Journal can list the position in our Jobs Directory to help find the right candidate for you. We also recommend to discuss this topic with other merchants who have already hired for the position and can better illuminate the roles and responsibilities of the position.

Don’t Forget the Big Picture When Hiring a Fraud Analyst

Whenever you decide it is time to hire an eCommerce fraud prevention analyst, be sure to maintain quality as you scale. Your team must protect revenues as you grow. This means knowing how to prevent chargebacks without simultaneously creating too many false positive declines.

The biggest mistake is to rush the decision. If you need immediate relief from fraud attacks, consider speaking with one of the top chargeback solutions on the market. Although managing scale requires a professional analyst, many of the tools offer chargeback insurance and can help you get started while you conduct your search.

Ultimately, if you ask the right questions and remain patient, you can find the right people who know how to follow the latest eCommerce fraud trends and protect your business against fraudsters both now and in the future.

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