Customers interact with merchants in numerous ways – through websites, mobile apps, and brick and mortar stores.
Today, the purchasing journey spans across devices, platforms, and locations as more consumers demand omnichannel options from merchants. With the huge demand for omnichannel comes increased risk for fraud and abuse . For example, in 2020, BOPIS (Buy Online Pickup In Store) fraud attacks grew by 55%.
Many merchants still use rules-based systems and transactional data as their main tools for fraud prevention. These traditional approaches focus primarily on transactions at the point of checkout. Such a narrow focus leaves businesses open to fraud and abuse at other points in the customer journey.
Fraudsters target touch points across the entire purchasing journey. Merchants therefore require a fraud prevention solution that can analyze and protect every touch point along the way.
Merchants must move beyond rules
Rules-based systems flag transactions or users based on specific attributes. You need human resources to set the rules the system follows, and it typically takes thousands, if not tens of thousands, of rules to prevent even basic types of fraud effectively. Fraudsters move fast, many of them using automated tools like bots and machine learning. Can your team program rules fast enough to keep up with fraudsters armed with machine learning? Probably not. This means your business will never be fully protected from new and evolving fraud. A manual process is reactive and cannot keep up with shifting and evolving fraud and abuse trends, leaving your business exposed and at risk for greater losses.
Rules-based systems typically also rely on teams of manual reviewers, where individuals review and make decisions about flagged transactions. It takes time to complete these manual reviews, and during peak periods – like flash sales or holiday season – that time also adds friction for customers. The result is a less-than-seamless customer experience and delays to fulfillment.
Rules-based systems focus on individual transactions instead of looking at identity data common among transactions or customer interactions. While effective fraud prevention does include analyzing transactions, you should never rely solely on transactional data.
You need more than transactional data
Systems that rely solely on transactional data can’t see the entire context or story around the transaction. Fraudsters often use proxies or breached personal details to manipulate transaction behavior. They also use automated tools like emulators to mimic the behavior of legitimate users. As such, your system must not only look at transactions but also the reputation of the digital identity behind them, or it will produce inaccurate results. An inaccurate system means more fraudsters get through or you inaccurately identify legitimate customers as fraudsters, and your company loses revenue and brand reputation.
Systems that rely solely on transactional data tend to focus on preventing fraud at the point of checkout, but fraudsters look for vulnerabilities at every point of the customer journey. You need a solution that can assess the trustworthiness of the user as they engage in activities at every touchpoint, such as:
- Account login
- Update account details
- Buy online pick up in store (BOPIS)
- Buy online return in store (BORIS)
- Redeem coupon codes
Fraudsters constantly change the tools and approaches they use to commit fraud. Why wouldn’t you change your approach to preventing fraud and abuse in return? Continuing to use traditional approaches for fraud prevention only makes it easier for fraudsters to win.
You need a modern, automated system with a vast global merchant network that can determine the trustworthiness of every user, at every touch point, in real time.
A better way to prevent fraud and abuse
Forter provides an integrated fraud prevention solution that looks at 100% of interactions across 100% of the customer buying journey. Our platform features a global merchant network that identifies more than 850 million unique consumers. The network aggregates data from numerous merchants across verticals and geographies allowing businesses to benefit in a number of ways, such as:
- Removing friction across touch points. Aggregating data allows businesses to offer a faster path to checkout for known, legitimate consumers. Instead of having to go through several steps of authentication, good customers can be offered the option of a “one-click” type of checkout.
- Increasing approvals for new customers. Our identity linking technology allows connections and relationships to be traced between identities even when no single data point is shared. And our network provides access to a wide set of data across geographies, touch points, industries, and clients. With this data, you can better assess the risk of transactions for new and infrequent customers.
- Detecting emerging fraud and abuse trends. Merchants within the network observe fraud types across clients in all geographies and industries. Aggregating data from this vast merchant network enables businesses to detect the activities of a single fraudster or fraud ring and connect different transaction attempts. Fraud rings often launch attacks against enterprises in a wide range of geographies and verticals in a short period of time. So, the network is crucial to detecting and stopping emerging fraud and abuse trends.
Forter’s integrated platform aggregates data from touch points across the entire purchasing journey. With this data, you can arm your business with a richer picture of consumer behaviors to better distinguish between legitimate and fraudulent activities. You can also provide customers a fast, frictionless, and more enjoyable purchasing experience.
To learn more about rising fraud trends and the fraud prevention capabilities your business needs, download our white paper “Cyber Crime is Costing the World $6 Trillion Annually. Is Your Fraud Prevention Ready?”
