This week, Sift, a fraud prevention and risk management solutions company using real-time machine learning, released a new survey tackling the issues associated with ensuring innovative, new and even embedded communications services that make consumers’ lives more convenient, but which don’t compromise privacy regulations or personal information security.
Responses for the Digital Trust & Safety: Aligning Security and Growth Strategies report were generated from a survey of 500 professionals across North America with responsibilities related to fraud, risk, mobile or ecommerce operations and strategy. They represented companies with 500+ employees across online retail industries including travel, hospitality, ecommerce, and other digitally transforming verticals.
“Blockbuster. Toys R Us. Kodak. Sears. What do these once market-leading brand names have in common? They didn’t evolve to meet customer demands, and they paid the price. Today’s businesses face the same challenge, every day.”
The must-read report opens with this challenge, and then dives into the tension created when businesses work to get closer to customers and meeting their needs in innovative ways, while protecting those same customers from fraud or other negative outcomes.
The report, on which Sift worked with independent analyst firm Berg Research to collect the data, was commissioned as part of the company’s ongoing efforts to help brands reach, target and connect with customers.
“The traditional mindset towards managing risk has focused almost exclusively on preventing loss,” the report says. “The organizational structures, processes, and tools that accompany legacy approaches sprang from a single goal: risk mitigation. They focused all their attention on finding and eliminating <1 percent of their users who were bad, while losing sight of the 99+ percent who are legitimate. Little or no emphasis was placed on maintaining a great customer experience, increasing user engagement, or enabling revenue growth.”
The report cites complex and frustrating fraud mitigation approaches that haven’t scaled, and certainly will not scale without more intelligence and automation going forward, as humans are increasingly hyperconnected, not only with others, but with machines and services.
The description of “online fraud” used to be straight forward: using a stolen credit card to make a purchase. Now, criminals have definitively broadened their tactics beyond stolen credit cards, taking advantage of online businesses and their users in new ways.
This broader spectrum of fraud risk has been rising, the Sift report says, “as businesses add more features and capabilities to increase user adoption and engagement.”
One-click checkout, peer-to-peer marketplaces, digital goods, customer reviews, and referral programs are popular among consumers, “but criminals are adapting their techniques to exploit those very features, making it harder to keep pace with evolving attacks.”
The attack surface is growing, with mounting attacks now numbering in the hundreds of millions of consumer records breached over the last few years.
“Clearly, the status quo is not working, the report says. “Companies are investing in and applying the same methodologies they always have and expecting a different result. Meanwhile, the world is changing around them: fraudsters are getting more sophisticated, and users’ expectations are getting higher.”
Digital Trust & Safety is about more than adding a new tool or procedural step – and the bottom line is “about remodeling business strategies for the challenges and opportunities of the digital world. This framework encompasses changes in mindset, processes, and technologies.”
“Friction is the enemy of growth. If companies continue to manage risk at the expense of the customer journey, they will not survive in the digital economy,” said Jason Tan, CEO and Co-Founder, Sift. “This will require more than simply adding a new tool or process. It requires a fundamental change in mindset to harmonize growth and risk.”
Everybody in the company into the CX pool? Indeed! The benefits for organizations who are able to manage risk while optimizing CX are unlimited, and given advancements in new ways to capture, record, transcribe, store, analyze and audit even every voice call (in addition to chat, messaging, bot-driven support, and more) will contribute to the advancement of software solutions that can scale to keep up.
Edited by
Erik Linask
