There is no doubt that customer experience is the pillar of any successful business. Prioritizing a customer-centric journey can boost revenue by 1.7X, increase customer lifetime value by 2.3X, and lead to higher customer retention and loyalty.
But, as fraud continues to rise, protecting customers, safeguarding their privacy, and keeping their account information safe has become more important than ever.
And yet, nothing deters customers from closing a transaction like complex security protocols and lengthy validation processes. So, how do you combine seamlessness and fraud protection?
Here’s how to balance the scales.
Empower the Customer to Gain Control Over Security
The Association of Certified Fraud Examiners estimates that each year, US businesses lose around 5% of their revenue to fraud. But while this isn’t a negligible impact, the main victims of fraud are the customers.
According to a Federal Trade Commission news release, fraud reports rose to 2.8 billion in 2021 and caused consumer losses greater than $5.8 billion – a 70% increase from the 2020 levels. The rise of eCommerce, quickly evolving systems, and increased reliance on technology are only sharpening this trend.
But with so much at stake, consumers are willing to take more control over their protection against fraud. For companies and retailers, offering the possibility to switch off their accounts or cards when not in use and pushing real-time activity alerts can be great ways to empower single end-users in the fight against fraud.
Create an Adaptive and Comprehensive Fraud Prevention Strategy
While consumer empowerment is important, institutions have a duty of care to their audience and are mainly responsible for creating secure systems that can be trusted. After all, a consumer shopping on an eCommerce site or using a money transfer application will expect security through each step of their journey.
At the same time, technologies evolve quickly and fraud is dynamic, making it harder for companies to develop a long-lasting strategy that will remain efficient as bad actors continue to pivot.
That is why fraud mitigation strategies have to be adaptive and protect the customer across each step of the journey, especially during the payment validation and transaction phase.
Existing tools to validate cardholders, strategies like multi-factor authentication, and useful tips to prevent chargeback attempts carried out by criminal and friendly fraudsters can help you provide a greater level of security for your users.
Use AI and Machine Learning to Run Fraud Prevention in the Background
With technology evolving at an unprecedented rate, and fraudsters finding ways to get around protection barriers faster than ever, companies need to invest in software that can write itself and respond in real-time to changing threats.
Emerging technologies such as Machine Learning and AI can run in the background to recognize and distinguish normal from fraudulent user behavior. For example, these systems can capture information about a device’s user, such as how they enter data, swipe across the screen, or move from one app to another.
Once the software understands this baseline behavior, it can also recognize abnormal patterns that might be fraudulent.
Use Biometric For Streamlined Authentication
Consumers are expecting devices and software – including their smartphones – to allow them to do more. Online shopping, monitoring health, making banking transactions, managing their finances, and communicating with others are just some of the functions expected.
And, they expect to do all this both safely and with a few touches – that’s where biometric authentication can help. Biometric data, such as facial recognition and selfie technologies, prevents users from having to remember complex passwords, reduces the need for added verification steps, and provides immediate verification.
Provide Secure and Seamless Access Via Integrated Verification
Most businesses today rely on knowledge-based authentication (KBA) as their unique strategy or as part of a wider Multi-Factor Authentication (MFA) system. While these are, undeniably, some of the most commonly used systems, they aren’t the most straightforward, easy to use, or secure.
And, they can easily lead to false rejections, causing a severe impact on the overall experience of your customers. Instead, an integrated verification strategy combines biometric behaviors, user patterns, and mobile network operator data to validate authentication in seconds.
Make Customer Service Accessible At All Times
Offering a stellar customer service system is one of the few customer retention strategies that actually work – and it’s essential to fight fraud in real-time. However, as your user base grows and moves towards online tools, it can be hard to provide each consumer with the streamlined help needed in the case of suspected fraudulent activity.
Tools like a 24/7 phone line, live chat, and social media can help you create a direct line of communication between your business and your audience.