Although the festive season is still five months away, restaurants are
already taking bookings for Christmas. They are not alone - retailers and
ecommerce outlets are also gearing up for what is generally their busiest
spells. 

And there’s now some big numbers at stake.

Some perspective - last year’s Cyber-Monday saw some online retailers
report sales of more than 60 items every second. This came after Black Friday,
when some ecommerce outlets’ recorded sales topping five million goods.

Given the volume of customer demand there is an inevitable
pressure to ease off some online fraud controls, but with this comes issues.

Firstly, our data shows that the rate of attempted fraud
tends to peak around December, so even without relaxing fraud rules, there is
an increased risk. 

Secondly, merchants will need to carry out more manual
reviews driving up operating costs, not to mention increases customer friction.

So what should retailers do?

1.       One-size-fits-all just doesn’t work. For
many, fraud-prevention rules are temporarily adjusted at Christmas, supplemented
with additional manual reviews to accommodate increased volume. This means
higher operational costs and a higher insult rate (incorrectly identifying good customers as potential fraud). The right fraud-prevention measures at the right time can avoid insulting 29% of customers to tackle a 0.9% true fraud problem.

2.       Think beyond your business area. The explosion of channels and devices means much more information that can be used to authenticate identities across the digital ecosystem. Establishing and maintaining a single customer view would give companies additional, actionable insights throughout the customer
journey. Our analysis shows that 89% of marketers globally have trouble
achieving this. Technology is key to linking data and identities together —
like customer loyalty data with customer transactional data, social and digital
behaviour, demographics and more.  Those that do it successfully get a clearer picture of their customers and how they engage across channels.

3.       A marriage of fraud and marketing efforts. The past can often help predict the future. Fraud and marketing teams should jointly review past holiday performance in terms of both top-line growth (successful
campaigns) and successful risk strategies that complement those growth
objectives and use the insight to form future strategies.

4.       Who is responsible for the customer
experience?  More financial services companies are reporting notable success with digital teams, those bringing together marketing, risk and consumer experience experts to create and maintain a directional and strategic customer understanding across channels. Formalising the sharing of data, processes and best practices among these departments is a way to process more customers while reviewing fewer transactions, catching more fraud and providing a hassle-free customer experience.

5.       Fraud evolves with technology. Fraudsters
will continue to look for ways to beat the system. New technology, while it
helps the customer experience, also means a greater exchange of personal and/or
financial information. Don’t get complacent – keep on top of these developments
and have a plan to react quickly. It can significantly increase the chances of
thwarting criminals and keeping businesses and their customers safe.