May 22, 2019
In today’s competitive consumer sales environment, many companies are engaged in digital transformation. For merchants, this often means expanding traditional sales channels to include loyalty programs, mobile apps, coupons, and international expansion.
Tied with the opportunities involved in opening new customer experience opportunities, these new channels can be prone to fraud. Potential negative outcomes associated with fraud encompass financial losses, brand damage, and loss of loyal customers. In order to maximize the return of innovation programs, a fraud prevention strategy needs to hold a seat at the innovation table.
The AFP “Payments Fraud and Control Survey Report” describes payment fraud as “the new normal” in organizations. They recently announced that 2018 scaled to a new high with more than 80 percent of all organizations targeted by fraudsters. As more and more companies implement payment technologies, digital fraud is significant, whether it arrives in the shape of payments fraud or friendly fraud.
In global economies, fraud and innovation are linked. There are many layers to this relationship, but when an innovation is launched into the digital sphere, exploitation is not far behind. We call this the exploitation cycle. Innovation leads to monetization, which leads to exploitation, and the cycle repeats itself.
In order to limit the impacts from this cycle, businesses have an ally in their fraud solution. As companies plan their strategic goals and advance their digital transformation goals, fraud teams need to be involved in forward-looking deliberations so that they can simultaneously plan to implement fraud prevention controls. Rather than waiting for fraud to occur, these teams can proactively advance anticipated protections and respond to fraud in real-time.
A leading online travel agency in Australia and New Zealand, Webjet capitalized on their advancement from desktop bookings to streamlined and user friendly mobile and app bookings. By protecting that digital shift, Webjet saw a striking 116% increase in total transaction volume. By analyzing data, they were able to act on the insights and quickly implement changes to meet new fraud trends. In fact, their chargeback percentage is now 98.4% lower than the industry average. In addition, Kount helped the company broaden their geographic reach by unblocking countries they had previously avoided.
Fraud prevention needs to be just as strategic as the go-to-market plans for new innovation. For example, Kount’s team receives calls from clients who describe new launch plans and their concerns with security vulnerabilities and risk. Our experts are prepared to consider new use cases that evolve with client growth and adapt to risk. Rather than a knee-jerk reaction to a fraud incident, in partnership with Kount, fraud teams can implement the correct solution in advance of an expansion or new product launch.
Fraud risk doesn’t need to diminish potential advancements. With a long-term view on fraud vigilance tied into innovation early in the development process, exploitation can be stopped before it begins.