With over three decades in the Financial Services industry, I've witnessed the evolving challenges banks face in managing their operations efficiently. This is the first in a series of posts about how financial institutions are under mounting pressure to handle payment disputes and fraud claims across an expanding array of payment networks and types. I’ll point out some root causes, but more importantly, present a path forward.
From traditional credit card transactions to modern P2P and real-time payment methods like Zelle, Faster Payments, SEPA, or FedNow, my peers consistently note that the current rate of change is unprecedented. This shift is reflected in BAI's latest Banking Outlook Report1, where "operational efficiency" has now surpassed "delivering exceptional digital customer experiences" among the top three business challenges for 2025.
Through my work with global financial institutions, I've observed how fragmented dispute management operations create significant inefficiencies. Years of incremental changes across channels, systems, networks, regulations, fraud, and operational departments have led banks to a breaking point. Beyond the obvious issues of productivity and compliance, these disjointed dispute processes directly impact customer satisfaction, loyalty, and retention.
In my discussions with financial institutions, it’s no surprise that straight-through processing, automated compliance, and AI continue to be top of mind. A large majority, approximately 80%, are also seeking a comprehensive solution to transform their dispute handling processes. They recognize that a new approach is needed to manage this growing complexity. While I don't advocate for "universal" agents as the solution, there are clear benefits to unifying payment dispute operations through technology:
Complete visibility across operations: A unified approach provides unprecedented transparency into every dispute across lines of business and payment types. Management can monitor dispute volumes, throughput, and backlogs in real time, enabling them to identify bottlenecks and optimize resource allocation effectively.
Consistent compliance: Unified solutions ensure consistent application of regulatory requirements. For example, in the U.S., banks must apply Regulation E consistently across debit accounts, regardless of the payment method. Dynamic service level management based on regulatory requirements and automated functions like correspondence and credit application reduce risk while ensuring consistent compliance.
Enhanced productivity: Unification creates significant opportunities for productivity gains through improved workforce management. By standardizing process guidance and user experience across payment types, banks can effectively balance workloads by cross-training staff to handle lower risk disputes outside their primary role. This approach reduces training time and enables consistent best practices across all dispute types.
Streamlined IT operations: The implementation of a unified solution significantly reduces IT burden through configuration reusability across channels and payment types. Replacing multiple discrete systems with a single, integrated platform allows banks to leverage standardized configurations that are easily adapted for new payment types, reducing custom coding and maintenance while enabling faster implementation.
As financial institutions evaluate technology solutions for dispute management, unification requires more than just the latest “bells and whistles.” I believe there are three key factors to consider:
- Extensibility: Banks need solutions that can adapt without requiring extensive custom code. In an age of limited IT resources and tight budgets, the architecture must be designed to accommodate change and new payment networks efficiently.
- Speed: That extensibility also must be fast. Implementation speed and time-to-value are critical factors in today's rapidly evolving payment landscape. Let’s not forget those landscape changes also include government regulations that must be complied with.
- Experience: The solution provider should have a long, proven track record in dispute, fraud, and chargeback operations. This expertise not only contributes to successful implementations, but also demonstrates a long-term commitment to the industry.
Many vendors will satisfy one or two of these requirements, but our next-generation Pega Smart Dispute™ application2 is one of those rare solutions that delivers all three. It’s built on an enterprise AI decisioning and workflow automation platform that was recognized again recently by Forrester3 as industry leading. Smart Dispute can adapt payment dispute operations for new payment types in weeks or even days using Pega GenAI Blueprint™. With over two decades in dispute management, Pega has the knowledge and experience to help banks transform into a showcase of efficiency, compliance, and customer service excellence while rapidly adapting to market changes. After all, it's right there in our tagline – Build for Change®.
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