This original report provides insights and education to retailers and merchants to demonstrate how digital transformation also brings about more complex fraud scenarios. While improving the user experience, it is critical that vulnerabilities are identified and mitigated. This research report was independently produced by Javelin Strategy & Research. Javelin Strategy & Research maintains complete independence in its data collection, findings, and analysis.
Innovative businesses—both retailers and financial institutions—that disrupt their industry are also facing the most complex fraud mitigation strategies as criminals rapidly deploy new tactics to steal consumer identity and payment data. Over 40% of companies that perceive themselves as highly mature in the market find that fraud prevents their advancement in business. Mix in competitive threats and growing expectations of frictionless commerce from consumers, and the challenges are rising.This survey and whitepaper review different verticals of businesses, some that are doing well in advancing innovation while balancing fraud reduction.
An excerpt of the report is included below:Digital front-runners face the greatest fraud challenges. 42% of businesses that consider themselves to be very digitally mature found that fraud restrained them from continuing their digital innovation efforts.Businesses can learn from digital innovation processes in other industries. In facing unique customer expectations, competitive environments, and fraud pressures, each industry has a unique perspective on digital innovation.Digital fraud demonstrates commonalities across industries. While different industries have unique use cases and exploitation outcomes, criminals attack digital infrastructures with similar methods that transcend industry.Retail merchants take a balanced approach to innovation. Many merchants are working on building bridges between their different channels with features like buy online, pick up in-store. Read the retail industry focus.Restaurants focus on expanding their feature sets as they catch up with competitors and other industries. 70% of restaurants with a digital presence plan to invest in new digital features and products over the next year. At the same time, the proliferation of such features as digital gift cards and rewards programs exposes restaurants to types of fraud that they were largely insulated from in the past. Read the restaurant industry focus.Insurers’ main focus is expanding mobile functionality. Just as restaurants are rushing to catch up with the digital standards set by retail merchants, insurers are catching up to the features pioneered by financial institutions. More robust mobile capabilities allow insurers to simplify the claims process for policyholders. Read the insurance industry focus.Financial institutions are heavily focused on investments in fraud mitigation. 52% of FIs plan to invest in additional measures to secure existing accounts, and 46% plan to invest in better identity-verification measures. Read the FI industry focus.