Let’s strike a balance between digital fraud prevention and customer experience once and for all
As we enter year three of the global pandemic, consumers continue to transact online, rapidly expanding the digital economy and the need for digital fraud prevention. Unfortunately, fraudsters are taking advantage of this evolution in consumer behavior. As even more consumers shift their interactions with retailers online, fraudsters are deploying new tactics designed to evade standard fraud detection. Unfortunately, according to the Fraud Prevention in Ecommerce 2022-2023 Report, the current global economic downturn may further expand fraudsters’ area of reach, “looking for additional vulnerabilities from both merchants and end-users to carry on their criminal activities.”
As fraud increases, companies often respond by implementing more stringent digital fraud protection methods. However, this can degrade the customer experience to the point where they become frustrated. Customer loyalty is crucial for any business, which means customer experience must be prioritized in any ecommerce risk assessment. And herein lies the challenge; the constant tradeoff between preventing fraud and reducing friction for good customers, a balancing act that all companies must master. Adding additional data into decision workflows reduces the magnitude of this tradeoff because companies are able to perform identity verification more thoroughly, specifically, labeling good customers and flagging riskier customers more accurately.
Ekata has a variety of lightweight APIs that can be used early in the customer journey for thorough identity verification checks. The most applicable is our Account Opening Solution for ecommerce companies and marketplaces. This solution takes the phone, email, and the IP address as inputs to provide back metadata; online behavior of the identity elements, and machine learning scores. All of this data can then be used to categorize customers into different buckets of risk so that step-up friction or heavier weight checks can be implemented where relevant.
By flagging and grouping riskier users early in the customer journey, companies can confidently send low-risk users through a sign-up workflow that reduces friction, providing a much more seamless overall transaction experience. This nuanced approach to digital fraud prevention, in turn, increases customer loyalty and retention, which in the long run increases lifetime value.
To learn how Ekata can help you nail ecommerce fraud prevention while maintaining a seamless experience for good customers, fill out the form below to speak with a representative.