As businesses look to future proof their fraud operations, there are key steps they can take to protect themselves.
A first major step is to discover the unknown. In fraud prevention, the unknown can have disastrous consequences.
As new technologies come online and/or are adopted, businesses need to evaluate them and understand how fraud occurs via these new channels. Businesses should have the ability to track fraud patterns in these new technologies, learn from them, and map defenses accordingly.
Also, always view fraud prevention tactics and strategies within the proper context. Be aware of current economic and societal conditions and analyze how behaviors may vary.
For instance, the e-commerce industry needs to keep a close eye on the impact COVID-19 is having on shoppers as they abandon their normal shopping habits and turn to “panic shopping.” Buying behavior that might have looked suspicious in January could be the norm today.
Use data to your advantage. Looking at last year’s seasonal trends can provide a baseline to help businesses better assess emerging fraud patterns in the coming weeks. Surprises will still happen, and frequently — but an educated guess about the reasons for a sudden surge in high-value orders, for example, is a start.
Re-evaluate trust and safety practices. While merchants may feel they gain a sense of security while putting any type of fraud prevention system in place, a dynamic approach to mitigating risk might be a better solution. Oftentimes, risk averse/conservative approaches can do just as much harm as good by falsely declining or “insulting” legitimate customers and transactions.
As the world continues to be shaken up and consumer behavior shifts, fraudsters are following suit. Thankfully, fraud prevention experts already have experience identifying new fraud tactics — whether it be new technologies, ways to pay, etc. — and know how to adapt. As businesses move forward and deal with the repercussions of COVID-19, fraud teams will need to once again evolve to keep pace with fraudsters.
