August 23, 2019
By Rich Stuppy, Chief Customer Experience Officer, Kount
Artificial Intelligence (AI) is essential for successful payments fraud prevention strategies. Cybercrime and fraud threats are evolving and presenting in unexpected ways to merchants who accept digital payments. An advanced solution is needed to stay ahead of fraud and reduce revenue losses to fraudulent transactions, while maintaining a smooth customer experience.
Merchants who make digital sales are often vulnerable to fraud that impacts their payments ecosystems. Fraud is becoming more complex and relies on machine learning to execute fraudulent activities and bypass security solutions. Outdated fraud detection systems employing rules-based only detection and basic supervised machine learning are not advanced enough to meet current fraud attempts. That’s where AI comes in.
AI is a part of the solution that can strategically align risk management with key business objectives. Kount’s AI detects nuances associated with complex digital fraud schemes while ensuring customers have a smooth, safe, and fast checkout experience.
An AI-driven fraud prevention approach improves four key business areas:
Detect Emerging Fraud: Uncover anomalies and spot patterns quickly and more accurately
Unlike existing fraud prevention solutions, which typically only offer machine learning and do not take business policies into account, Kount’s AI weighs the risk of fraud against the value of the customer and provides an evaluation in the form of a score which helps identify good customers, bad customers, and fraud.
Increase Sales and Revenue: Accept more good orders from good customers
Kount’s predictive transaction score, Omniscore, can be relied upon for decisioning orders, so that there is less reliance on manual review and reactive fraud rules. The result is less false positives and negatives, and more good transactions to generate revenue. AI makes it possible to detect fraud attacks in real-time versus having to wait six or eight weeks until chargebacks hit the books.
Lower Fraud Operations Costs: Reduce chargebacks and manual review rates
When there is a reduction in the number of manual reviews needed, this frees fraud analysts to focus on strategic business objectives. For example, without the weight of managing manual reviews and chargebacks, fraud analysts can gain a seat at the strategic table and make recommendations on how risk can be managed in light of new product innovations and expanded offerings.
Control Business Outcomes: Customize risk thresholds based on business goals
With enhanced flexibility, businesses can determine and adjust their risk tolerance to meet product or campaign promotion performance goals. Merchants also gain the data they need to understand who is purchasing their product and when. These insights yield the business intelligence that can help adjust future strategies.
AI-driven fraud prevention emulates an experienced fraud analyst, allowing fraud prevention teams to focus in on key business strategies. This advanced solution stays ahead of emerging fraud trends while empowering businesses to control outcomes including lower manual review rates, fewer chargebacks, and increased order acceptance rates.
About Rich Stuppy: For more than a decade, Rich has been involved in developing fraud mitigation, compliance and big data strategies. In his role as Chief Customer Experience Officer, Rich is responsible for client success and ensuring Kount’s users have the best customer experience.