A seismic shift is hitting the transaction world and changing fraud prevention methods along with it: In the midst of prolific data breaches, consumers are becoming much more aware of fraud issues and are beginning to question exactly how companies use and protect their data.
Take the recent Facebook scandal, for example. After news broke that data firm Cambridge Analytica used information from 50 million Facebook users without their knowledge, the social media company lost about $73 billion in market value in a matter of days.
Meanwhile, a major study shows that as account takeover fraud rates continue to rise across the globe, consumers are beginning to blame the institutions that store their information for ATO damages that occur. This means that now more than ever, businesses that put a priority on data security and fraud prevention tactics — and do so publicly — will score major points with consumers and come out ahead of those that don’t.
The Customer Is Always Right, So… What Do They Think About Your Fraud Prevention Solutions?
As online fraud levels continue to rise, more and more consumers are becoming disappointed and frustrated with how businesses use and secure their personal data. In response, 62% of consumers are more selective about what data they share with businesses than they were just two years ago (and this number is expected to rise in the post-Facebook/Cambridge Analytica scandal world). Respondents in the study reported a preference for companies that are transparent about how their customer data is used.
The respondents were also more likely to choose companies that show responsibility in how their data is secured against account takeover fraud. The good news is that 60% of consumers think businesses are getting smarter about fraud prevention. The bad news is that a whopping 74% think fraudsters are consistently able to outsmart the organizations they seek to defraud. These numbers indicate consumers’ lack of trust in businesses when it comes to fraud issues and their fraud prevention solutions. The numbers also show that consumers believe most companies they do business with cannot adequately protect them against fraud.
Surprise: Security Concerns Rank Nearly As High As Convenience
In order to bolster consumer confidence, it’s important for companies to demonstrate that they are proactive and serious about keeping their customers’ data, money and identities safe. Verifying customer identities prior to transactions via smart, dynamic fraud prevention software is an important element of that. In fact, 42% of consumers say they value a secure service that protects them against fraud over a fast and efficient service. (That number is higher in adults over the age of 45: the majority report transaction security being even more important than easier site navigation, increased speed and one-click purchasing).
Fortunately, modern fraud prevention methods are able to deliver top-notch fraud protection and identity verification without interfering with a fast, smooth customer experience. RISK IDENT’s self-developed fraud software, for example, discreetly runs in the background the moment a customer initiates a transaction and distinguishes trusted activity from fraudulent activity — in real time.
Why Expert Fraud Solutions Matter
As solid fraud prevention becomes increasingly important to consumers, CFOs are beginning to see the advantage of shifting their fraud solutions from in-house methods to companies that specialize in fraud prevention. According to the Global Fraud Index, almost 75% of CFOs plan to outsource at least some of their fraud prevention methods because in-house teams often “lack the expertise, bandwidth, and range of tools to address fraud effectively.”
Fraudsters frequently change their tactics, and it takes constant training and technological advancements to keep up. Delegating fraud management to outside experts like RISK IDENT allows companies to invest their resources elsewhere; the company can focus on sales, growth and other pressing matters all the while feeling secure knowing that their fraud issues are being handled with the most up-to-date information and technology available.
With fraud incidents continually increasing, the number of customers that refuse to transact with institutions they feel are unable to protect their personal information is also set to rise. Businesses that build reputations for taking customer data and fraud prevention seriously will automatically garner a significant competitive advantage.
For more information on how RISK IDENT can help your business bolster customer confidence in an uncertain, fraud-filled world, contact us at firstname.lastname@example.org.