Mediaboss Marketing

The number of digital transactions has skyrocketed. As consumers continue to spend and interact online, they have growing expectations for security and identity verification. As fraudsters become savvier and more opportunistic, theres an increased need for businesses to protect customers from fraud while still providing a seamless online experience.

At the same time, businesses have the ability to access more insights and data than ever before, but may not be leveraging the most effective technology solutions to accurately identify and authenticate consumers online.

Uncertain economic conditions and what feels like a barrage of new scams has made consumers and businesses more concerned about online fraud.

Experians 2023 U.S. Identity and Fraud Report found that over half of consumers feel like they are more of a fraud target than they were just one year ago. In addition, half of businesses report a high level of concern about fraud risk.

The report found that people worry most about identity theft (64%), stolen credit card information (61%) and online privacy (60%). On the other hand, businesses are concerned about authorized push payments fraud (40%) and transactional payment fraud (34%). Additionally, nearly 70% of businesses said that fraud losses have increased in recent years and most businesses reported that they plan to increase their fraud management budgets by at least 8% to as much as 19%.

Despite their plans to increase their fraud prevention budgets, data shows that businesses may not be completely aligned with consumer expectations.

For example, 85% of people report physical biometrics, such as facial recognition and fingerprints, as the authentication method that makes them feel most secure. However, that identity authentication method is currently used by just a third of businesses to detect and protect against fraud, showing there is still a disconnect between consumer preferences and what businesses are offering.

Finally, consumers not only stress the importance of better security, but they expect their online experiences to be frictionless. This is evident in the data while 51% considered abandoning a new account opening because of a negative experience, 37% said a bad experience caused them to take their business elsewhere. Its crucial for businesses to implement fraud solutions that are capable of properly verifying real customers while identifying and treating fraud and providing a positive experience.

Businesses understand the need to incorporate machine learning into their anti-fraud strategies.

The main benefits of incorporating machine learning into fraud management is that it can:

A multilayered approach to fraud that leverages data, machine learning and advanced analytics is crucial for businesses trying to stay ahead of fraud trends. Machine learning modernizes identification and fraud prevention, allowing businesses to fight new and old forms of fraud as they occur while providing their customers with a seamless, positive experience.

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Modernizing fraud prevention with machine learning - Help Net Security