Turn every dispute into a moment of trust
Unify dispute and fraud operations across every channel, network, and payment rail
What is dispute & fraud management?
Dispute and fraud management is how a financial institution handles every claim when a payment goes wrong – from suspected fraud and scams to errors, non-delivery, and billing disputes – across all channels and payment types, end to end. Because fraud drives roughly two-thirds of the volume, fraud and dispute operations are best treated as one discipline.
Why dispute & fraud management matters now
Payment volumes are climbing, fraud is surging as bad actors weaponize AI, and regulations keep shifting. Real-time rails raise the stakes: Faster payments mean faster fraud – and scams are the fastest-growing threat. Handle a dispute fast and fairly and you deepen loyalty. Handle it slowly or incorrectly, and you teach your best customers to leave.
Benefits of modernizing dispute & fraud ops
- Lower losses and write-offs: Smarter handling lets you safely lower write-off thresholds, minimize friendly fraud, and cut losses due to error.
- Protect trust and loyalty: Fast, fair resolution at the moment of truth deepens loyalty – often cited at around a 25% lift when handled well.
- Scale without adding headcount: Deflection to self-service, automation, and straight-through processing (STP) absorb rising volumes, so cost to serve falls as case counts climb.
What modern dispute processing requires
A single dispute places six simultaneous demands on the operation: Capture it once and completely, classify with precision, resolve straight-through where clear, assemble the evidence, honor every network rule and government regulation on deadline, then move money and close cleanly with an audit trail.
See how AI and automation transform dispute & fraud operations in Pega's Smart Dispute guide
Why dispute operations break under pressure
Most operations were built for a slower, card-only era. They rarely fail outright. Instead, they quietly leak losses, miss deadlines, and erode trust. And the symptoms are easy to mistake for “just how disputes work.”
- Inconsistent intake across channels: Different entry points lead to incomplete or inconsistent data capture.
- Manual evidence gathering: Teams spend significant time collecting information from multiple systems and sources.
- Backlogs under high volume: Manual processes struggle to scale, creating delays, inefficiencies, and losses.
- Costly late-stage processing: Incomplete early decisions push more cases into complex, expensive stages.
- Compliance and deadline risk: Missing timelines or handling rules incorrectly creates financial and regulatory exposure.
- The other side is automating too: Merchants and acquirers use AI to auto-generate representments and push disputes back at scale.
The compliance burden: Every dispute must satisfy several rulebooks
A single case can sit under a payment network's rules and a consumer-protection regulation at the same time – each with its own eligibility, evidence, deadlines, and liability – across cards, ACH, SEPA, and real-time rails. Applying all of it correctly, at volume, is beyond a challenge for manual processes.
- Network rules differ by rail: Visa, Mastercard, American Express, ACH/SEPA, and real-time rails (Zelle, TCH RTP, SCT Inst, UK FP, NPP) each add their own rulebooks.
- Consumer protections add a lens: Reg E, Reg Z, C86, Section 75, and new APP-scam reimbursement rules all apply.
- Customers have rights; networks have rules: You must honor both, together, on deadline.
- The rulebooks keep growing: Any system you choose must adapt to changing regulations, not just today's.
Traditional vs. modern dispute operations
Capabilities of modern dispute & fraud management
Guided & complete intake
Structured, guided capture upfront collects everything needed – reducing rework and downstream cost.
Intelligent triage & routing
Accurate early classification routes each case to the right workflow immediately.
Policy- & regulation-driven
Rules, deadlines, network requirements, and regulations are embedded directly into workflows.
Evidence orchestration
Data, documents, and external inputs are coordinated automatically – less effort, more accuracy.
Straight-through processing
Where eligibility and evidence are clear, cases resolve automatically – cutting cost and time.
Right AI at the right time
AI automates the clear cases, assists on the complex ones, and steps aside where judgment must lead.
Deflection & avoidance
Resolve concerns before they become disputes – talk-offs, requesting detail, and guiding customers.
Channel deferral
Meet customers in their channel – assisted or self-service – moving work without losing context.
Operations unification
Cards, ACH, wires, and real-time payments – every dispute type managed in one solution.
Where AI can help across the lifecycle
Use cases for dispute & fraud management
The role of governance in dispute & fraud AI
As AI and agents take on more of the work, governance becomes a competitive advantage. Every automated action must be explainable, auditable, and defensible – because regulators, customers, and your own risk teams will ask.
- Explainable, auditable decisions: Capture the rule, evidence, and policy behind every automated action.
- Human in the loop where it matters: Straight-through where clear; people where liability or ambiguity demands it.
- Versioned rules and models: A regulatory change becomes a governed update – testable, traceable, and reversible.
- Role-based control and guardrails: Automation stays inside the bounds risk and compliance teams set.
The future of dispute & fraud management
The only certainty is more change – new rails, new fraud tactics, and new regulations will keep arriving. The operations that thrive won't be tuned perfectly for today – they'll be designed to adapt continuously, moving from automated tasks to governed, agentic operations.
Pega's approach to dispute & fraud management
Pega Smart Dispute unifies dispute and fraud operations across systems, channels, and payment networks for all the moments that matter. Built for change, Pega uses AI to reimagine, build, run, and adapt – so you can add a new rail, regulation, or agent without a multi-year rebuild. Customers have automatically resolved up to 95% of fraud disputes, improved total resolution time by 86%, and cut systems used from 15 to two.
Illustrative customer-reported outcomes. Results vary by implementation.
