The eCommerce industry is continuing its
rapid growth and the lines between physical and digital shopping are becoming increasingly blurred. This change in the way consumers conduct purchases is creating a number of challenges for merchants, especially when it comes to customer visibility and
Providing a good customer experience is crucial. To maintain it, merchants must be able to support and protect consumers as they move across these channels such as online and mobile, this requires the ability to accurately identify customers and provide
them with an appropriate level of service.
Adapting to change across multiple channels
One interesting area is ‘Click and collect’. Since its early conception as a process to purchase groceries, there has been demand for this facility due to its speed and convenience for customers across many sectors – and there’s every reason to believe this
However, ‘Click and collect’ also brings challenges for fraud prevention that merchants need to address. For example, as the ultimate in fast fulfilment options, merchants need to be able to quickly and accurately screen and approve customer orders while
blocking fraudulent ones. The lack of shipping address information also means merchants are missing an important factor against which they can check for fraud.
The changes in shopping behaviour and preferences, plus the growing volume of new customers, mean that merchants need to find new or alternative detection methods to supplement the more traditional ones.
Why knowing your customers is crucial
Without clear visibility of customers, which enables the creation of a personalised experience, merchants run the risk of losing new business before a customer has even bought anything. And that loss can be very damaging – after all, consumers have plenty
of choices of where they can shop.
If a new customer’s transaction is mistakenly declined, or if they abandon their purchase through frustration around extra security measures, it’s not just that one purchase that is lost – it’s the entire potential lifetime value of that customer.
But if a merchant can see beyond the confines of their own transactional data, this becomes a different story. If a merchant could see that a customer – who was brand new to them – had a good buying history with other merchants and all their data matched
up, they could confidently accept that new customer order.
This is exactly where positive profiling – a combination of consortium intelligence and big data analytics – can help. By using detailed behavioural data, externally confirmed fraud intelligence and an extensive range of customer identifiers, merchants can
build a more holistic picture of customers at the individual level. Rather than the traditional route of screening each transaction, this focuses fraud screening on the person behind that transaction.
There are now technologies out there for example which can determine whether an individual ‘shopper’ is likely genuine, by instantly identifying anomalies that go against the known shopper ‘profile’ - built with thousands of data-points within its global
consortium. This approach gives merchants the ability to tailor the customer experience, improve conversion rates and maximize revenue – while blocking fraud in the process.
When it comes to fighting fraud, there’s no one solution
The opportunity to ID customers as well as fraudsters can be invaluable for online merchants, especially as volumes continue to increase and merchants look to expand their market presence. Positive profiling can help significantly with this identification
process, supporting reduced friction and higher acceptance levels, as well as reduced fraud and chargebacks through highly accurate fraud decisioning.
However, it is important to remember that professional fraudsters work hard to predict the industry’s next move and to circumvent the controls or predictive measures we use to fight fraud, and eventually always find the means to do so. Whether it is rules,
machine learning, or more traditional fraud detection measures, each approach has attracted the close attention of fraudsters who have then subverted them.
So, it makes ultimate sense to combine multiple approaches and to include both automated decisioning and the continued review of human experts who can tailor fraud strategies in line with changing market conditions.
Positive profiling, as effective as it is, needs to be part of a layered approach to fraud prevention. The technique must work in sync with a full range of other intelligence-driven tools and strategies to ensure merchants can take advantages of opportunities
for growth without increased exposure to risk. Companies such as BioCatch for example deploy cutting-edge behavioural biometrics to help determine whether or not the person is who he/she says they are as soon as they begin interacting with a website.