Combining data, technology and strategy is the best way to combat fraud and support revenue, Wendi Lete, chief customer experience officer at Kount, writes in the new PYMNTS eBook, “2023 Payments New Year’s Resolutions.”
In 2023, the payments landscape will continue to experience growth in online transactions, costs associated with digital fraud, and technological innovation. Consumer demands have continued to evolve since the onset of the global pandemic and the increasingly common buyer expectations are centered around frictionless and personalized experiences.
In the midst of this, fraud continues to be a persistent and costly problem faced by merchants. Navigating the ever-shifting waters of consumer expectations, competitive pressures and fraud mitigation creates challenges across a business’s operational spectrum, including marketing and sales.
What is becoming quite clear is that accurate and timely data, in combination with technology and a well-rounded strategy, are the best components to reach the optimal point of fraud prevention and revenue generation. Merchants equipped with their own fraud teams are doing their best to secure the journey for their legitimate customers while reducing fraud losses but, without a robust methodology, may disrupt the sales cycle and create a poor buying experience.
Furthermore, merchants need to leverage accurate data to better identify and understand legitimate customers to enhance personalization for a better buying experience, which leads to increased sales and enhanced loyalty. But the conduit between the fraud department and marketing and sales is often nonexistent. Breaking down departmental silos, sharing relevant data and operating on an integrated tech stack or seamless platform are important to not only avoid the pitfalls many merchants face but also essential for brand perception and sustainable revenue growth.
Within this shifting payments landscape, the capability to remain rapidly agile and responsive is vital to the success of a business. Just as consumer expectations evolve, so do the tactics of fraudulent actors. And while businesses collect massive amounts of data to pinpoint and understand these nefarious tactics, the task quickly becomes overwhelmingly time-consuming and labor-intensive. The best way to overcome this challenge is by deploying artificial intelligence (AI) and machine learning (ML) technology to help aggregate, analyze and automate the decisioning of account creation and login, purchase transactions, and post-transactional events such as chargebacks and representments.
Yet even with the most technologically advanced systems, some businesses require additional expertise to overcome payment challenges, particularly in building and developing internal fraud teams or rapidly optimizing automated systems to strategically reallocate resources to activities other than day-to-day fraud prevention operations. Collaborating with an experienced partner, vendor, or consultant with the know-how and resource to help optimize systems and achieve KPIs can help a business focus on its core competencies.
Despite 2023’s complex payments landscape, particularly regarding consumer preferences, growing competition and fraud challenges, merchants now have access to the right technology to attain security without sacrificing revenue. The key is utilizing that technology with the right data, a sound strategy and the expertise to connect all the dots to ensure sustainable growth.
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