It’s getting rough out there. If you’ve worked in dispute resolution as long as I have—helping financial institutions understand how to repair the tens of thousands of frauds and fails they’re hit with each year—you know how much more complicated the landscape has become.
Regulatory frameworks have tightened. The subscription economy has made payments harder to unwind. Phenomena like ‘first-party fraud’ makes safeguarding your bottom line challenging. And widely available advanced technologies have been adopted by global fraud rings, expanding the fraudster’s reach at one end of the food chain while triggering increased losses at the other.
Over my 20 plus-year career—first as a leader in the Fraud and Claims department at Bank of America and now leading Quavo’s Dispute Resolution Experts service—I know well that financial institutions are squeezed on all sides, with risk to both profits and reputations rising.
The reality is that customers arrive at the resolution process stressed and vulnerable, while institutions must strike a careful balance between cost minimization and maximizing positive customer experiences. It’s a clear disconnect and it can be costly, leading to misaligned resolution processes that drive silent attrition, erode trust, and invite regulatory action.
I’ve learned that banks and credit unions tend to do better when they give dispute resolution the strategic focus it deserves while at the same time never losing sight of its human implications. Certainly, AI can play a supporting role, as it does at Quavo, where it assists human analysts by, for example, helping to surface intent in a customer’s words or handling repetitive tasks that slow the resolution process down.
But it’s essential to recognize that disputes are a rare chance—a moment of truth—for financial providers to show what they stand for when it really matters. Institutions that succeed in this can turn dispute resolution into a driver of loyalty and greater lifetime customer value.
To turn dispute resolution from pain point to strength, financial institutions need to overcome some entrenched assumptions, and in line with that, adopt relevant KPIs to keep their operating teams focused on the right things. Here are six essential lessons I’ve learned—anchored in performance benchmarking research published this year by Quavo—that will help you reset your institution’s approach.
Lesson 1: Timely Credits Build Trust
One of the first things I learned is that time isn’t neutral in dispute resolution. When money is missing, every extra day without a compensating credit feels like a penalty to the customer—and a test of their trust in you. I’ve seen that dynamic play out at scale: a slow process leaves cardholders feeling abandoned, while a quick response earns loyalty you can’t buy with marketing dollars.
Our data—based on the 2024 performance of over 50 financial institutionss—demonstrates that there is room for improvement. The industry average to issue first credit is 11 days. By contrast, Quavo’s best-in-class institutions return provisional or permanent credit in under one day. For example, top performing credit unions, applying higher automated provisional credit thresholds, can consistently achieve a one-day turnaround. Such speed signals to customers that their well-being comes first; institutions can recover funds later.
Lesson 2: Strategic AI Elevates Your People
Early in my career, investigators lost hours to routine steps—accounting entries, template letters, duplicate data checks. AI takes that work off their plate so they can focus on higher-value analytical work and decision-making that needs human expertise and judgment. When investigators aren’t buried by repetitive tasks, they have the time to review evidence, weigh recovery options, and communicate clearly with cardholders.
The distinction to make is between processing and investigation, and the KPI to watch is the disputes processed per month per user. Its operational effect shows up in workload mix and employee experience: If your organization has a high number of processed disputes per user that means you’re doing a good job of sparing your team members rote tasks—and by implication keeping them focused on value-added work. In practice, the swing between high and low performing organizations can be large: top teams approach 2,500 per user; the industry average is below 1,000.
The outcome for customers is faster, cleaner handling, and for institutions it’s about establishing a scalable model that doesn’t depend on adding headcount as volume grows. Team leaders can start to think about productivity in terms of focus rather than simple volume: As AI absorbs simple steps, managers can set fair expectations and coach to improve analysis, not keyboard speed.
Lesson 3: Strong Recapture Protects Both Sides
Recapture rate is a “money metric” that matters to both institution and customer. It tells you how much value you truly retained—across refunds, denials, and successful chargebacks. The pattern that drives higher performance follows the arc of a disciplined investigation: a) thorough evidence, b) fair denials where appropriate, and c) recovery filings that stick. Programs modeled in this way take longer: more than two weeks to resolve claims—and sometimes 30+ days—because they pursue the full recovery path rather than rushing to closure. But it’s worth it. Industry average recapture is 62% while best-in-class can hit 95%, which can represent upwards of $3 million to a mid-sized FI.
The KPI to manage is recaptured dispute dollars (%); it helps strike the right balance between customer timeliness and investigative completeness. The practical takeaway: define when you issue provisional credit quickly and when you invest time to substantiate recovery or denial; then measure recapture to ensure the trade-offs are working.
Lesson 4: Fraud Losses Can Be Contained
Loss rate is another key money metric, one that most institutions recognize but don’t necessarily keep in perspective. The fact is, fraud will never be zero, but the spread in performance is wide. The financial industry fraud loss rate is 40%; best-in-class players reach 13%. That gap reflects process discipline and tooling: filtering first-party fraud, automating strong chargebacks, and tightening deflection—blocking or limiting fraud before it enters your system—so fewer questionable claims convert into losses.
The practical move is to track fraud loss rate (%) separately from billing and tie it to concrete levers: e.g., intake quality, deflection, auto-chargeback criteria, and denial governance. The cultural point is simple: treating fraud losses as an unchangeable “tax”—a cost of doing business—leaves money on the table. Treating them instead as a managed outcome—visible in a KPI with well-defined owners and thresholds—creates room for improvement without adding friction that hurts legitimate victims.
Lesson 5: Billing Disputes Are Opportunities
Billing cases (merchandise / service issues) test whether you can solve a customer’s problem when their merchant falls short. Performance varies: best-in-class programs keep billing losses near 5%; credit unions average 24%—often reflecting a member-first posture, with the rest of the industry hovering in the mid to high teens. The practical levers are intake (collect what’s needed once), automated refund checks (fired off to the customer as soon as resolution happens, throughout the lifecycle), and routing only the right cases to humans. While billing loss rate (%) is an important KPI to drive down, lower isn’t always the goal if it comes at the expense of the cardholder’s experience. At the same time, rising losses do signal process gaps. Done well, this category becomes a trust builder: fast, accurate, minimal back-and-forth, and clear status as you move from intake to resolution.
Lesson 6: Recovery Rewards Speed, and Persistence
Acting early through merchant collaboration creates room for representments and normal-course-of-business refunds, rather than chargebacks. Filing late compresses your options. The average industry player takes more than two weeks to submit chargebacks; processors (not surprisingly) and best-in-class do so in as few as four days. On dollars recovered, best-in-class performers clear 85% of disputed funds. The working KPIs are days to chargeback and recovered dollars (%). Set a minimum dollar threshold for chargebacks, revisit it periodically, and automate in-network filings so investigators can focus on evidence and merchant monitoring. Early, systematic filing plus diligent tracking of merchant activity turns recovery into a repeatable motion rather than a scramble at deadline.
These benchmarks and lessons mark a clear way forward for institutions looking to elevate dispute resolution from cost center to strategic competency: Leverage AI where it builds customer trust and frees your team to make a difference; treat every dispute as a chance to prove your institution’s values; and manage to performance metrics that support these goals. When grounded in data and guided by experience, dispute resolution becomes a strategic advantage, not just a cost center—and creates durable loyalty in the moments that matter most and over the long term.
