Is fraud prevention bad for business?
Your risk management tools may be hindering sales, says Kount.
Cybercrime cost UK organisations on average £2.1m each in 2012. Yet with the high street continuing to struggle, this isn’t slowing down the hordes of retailers turning to e-commerce to stay in business – Visa reported a 16 per cent rise in e-commerce across Europe in the same year. With rapidly increasing online activity comes the heightened risk of fraud and, consequently, the necessity of good fraud prevention.
For those trading online, the majority have some sort of fraud prevention or risk management tools in place, even if it is basic. However, retailers might be surprised to find out that these “helpful” tools are outdated, easily circumvented by fraudsters and are actually more of a hindrance to sales.
Cyber-criminals continue to increase the size and sophistication of fraud tactics and techniques. The tough task of keeping on top of fraud has forced retailers to impose hard-and-fast rules on which transactions to accept and where to accept them from, narrowing their customer base drastically. Many retailers are also finding that a blanket approach to online fraud hurts sales by slowing down or blocking legitimate, genuine consumers.
Fraud prevention should be dynamic, fast and crucially accurate. It should be powerful enough to stop actual fraud, and strong enough to let your good sales through and always give the consumer a superior experience. It’s a balance that should always favour the honest consumer and the hardworking merchant.
Fraud prevention is meant to protect merchants, so there’s no value in having a solution that slows transactions and reduces sales. Proper fraud prevention gives merchants the flexibility to react to customer demand and intelligence on global fraud activity, facilitating genuine transactions – not blocking sales. As figure 1 shows, by reassessing the fraud prevention tools currently in place, online merchants can boost sales and beat fraud.
Bradley Wiskirchen is chief executive of Kount
0844 293 9764
Originally published at Business Reporter.