Partner Article

Knowing & protecting your customers

Fraud remains a massive challenge. Fraudsters are incredibly sophisticated, and only become more technically able to defeat the barriers thrown up to defend against them. The digital age’s increased access to data gives them the opportunity to in a multitude of new ways.

In order to fight the knowledge, resource and dexterity of fraudsters, developing an expanded view of customers is critical.

A multi-layered approach to authentication is regarded as the top business measure for identifying legitimate customers. The challenge is in striking the right balance of questioning so as to prevent an adverse reaction from the customer, confronted by ‘unnecessary’ or unexpected barriers. Having access and insight into universal consumer behaviour down to the transaction level is necessary for fraud mitigation in the future and builds the framework for a positive consumer experience.

To get an expanded customer view, collaboration between the product development, marketing, fraud teams and third parties is essential, a collaboration driven by the aim of growing and protecting business – sustainably.

A 360 degree consumer view: Expanding profiles with a unified ecosystem

The importance of profiling a customer runs deeper than transactions and purchase patterns. It’s important to also consider their overall patterns of interaction including their preferred devices, items removed from their online shopping carts, how much time they spent on a site, and beyond.

These patterns help merchants distinguish trustworthy activity from that which is not, a critical factor for determining the overall level of risk or trust that the merchant should have with that customer when building their profile.

But to gain true knowledge of a customer, businesses need to know what they’re doing both on and offline, not only with their business but others that individual engages with. This is where a unified ecosystem comes into play. It’s a vital component of customer profiling and many businesses now aim to achieve a single customer view by collaborating across internal silos to bring together information.

However, a company’s single-customer view may still achieve only a partial view of the consumer given their view is constructed solely based on their relationship, rather than the consumer’s relationship with other companies. This is where the fraudster has the advantage. They can have a much broader view, and businesses need to match this. Participating in a blended ecosystem by working with vendors, customers, partners and even industry competitors can bridge disparate data and internal silos, providing an enhanced will customer experience that supports business growth, without sacrificing protection.

Finding the fraud solution that fits

The growth of mobile and web traffic is increasing the volume of online purchases and so, inevitably, more fraud is being pushed there. It’s also making it more difficult to recognise true customers. Then as a consequence the rate of disrupted legitimate traffic to actual fraud attempts can jump to a staggeringly high of 30 to 1 – putting too many legitimate customers at risk of being challenged to make one catch. But it doesn’t HAVE to get to that. A multi-layered approach based on a single customer view results in a better fit for the activity level – and fewer false positives, with more completed customer journeys.

Businesses need to apply fraud mitigation strategies that reflect the value and level of confidence needed for each transaction to strike the balance of keeping customer disruption down while maintaining the necessary level of fraud management. It’s about finding the right size fraud solution.

This was posted in Bdaily's Members' News section by Gary McVie .