- Security TWENTY
- Women in Security
Six out of every ten businesses are experiencing the same or more fraudulent losses online compared with a year ago, according to a data checking agency. Experian’s Global Fraud and Identity Report shows that fraud trends and patterns continue to grow across the globe. The research found that most businesses — 72 percent — cited fraud as a growing concern.
The research also suggests that businesses need to better identify their customers to help combat online fraud. Most businesses tend to demonstrate suspicion when it comes to preventing fraud, following a route of detection rather than permission or trust: 71 percent know that they deny more transactions than they should. This doesn’t just lead to a loss of sales; it’s also likely to damage the lifetime value of that customer, according to the data checking firm.
Business leaders agree that if they were more precise in identifying customers and avoiding denial of real transactions, they would see an increase in revenue. In fact, 84 percent of businesses say the need for fraud risk mitigation could be reduced if they were certain about customers’ identity.
Kathleen Peters, Experian’s senior vice president of Global Fraud and Identity said: “Whether it’s in our favorite coffee shop or shopping online, being recognized by the people we do business with goes a long way. Recognition helps to stimulate trust, and trust is what makes all of us feel safe and protected. Trust is the currency of digital commerce. Technology is the enabler that underpins it.”
While consumers want to be recognised, they also expect online banks and retailers to do everything they can to protect their information and secure their transactions, the firm says. Nearly seven out of every ten consumers like security protocols when they transact online, because it makes them feel protected. But that doesn’t mean they like too many hurdles and inconveniences. The most effective fraud prevention and identity strategies keep people safe without disrupting their experience.
Peters added: “Fraud is always evolving, and fraudsters are becoming more resourceful. Good fraud detection requires multiple strategies, including better customer recognition. Simply put, the better you recognize your customer, the better you can recognize fraud.”
Experian interviewed more than 5,500 consumers and 500 business executives in 11 markets. Other findings from the report:
• One out of every four consumers has abandoned a transaction because setting up a new account required too much information.
• 35 percent of consumers would transact more online if there were fewer security hurdles.
• Only 40pc of businesses are “very confident” in their ability to detect fraud.
• 52 percent of businesses are still using passwords for fraud detection and protection.
• 75 percent of businesses expressed interest in more advanced measures that have no impact on the digital customer experience.
The report also shows how regions across the globe view and manage fraud. Different regions put different levels of emphasis on advanced security measures that have no impact on the digital customer experience. The United States, India, South Africa and China make this a significantly higher priority.
Robert Capps, vice president at NuData Security, a Mastercard Company, said: “The ability for organisations to limit fraudulent activity is at present marred by their inability to accurately identify customers. In this age of data breaches, password reuse, and password guessing technology, a simple username and password method of authentication is simply not enough – the flurry of constant data breaches are evidence of this.
“The use of two-factor authentication, or even better, passive biometrics, which is capable of identifying users based on passive biological factors impossible to mimic, could help to bridge the identification gap for companies, and put 84% of fraudsters out of business. Behavioural and passive biometrics, in a layered approach, help to identify the identity of the real consumer without applying additional friction or inconveniencing the transaction. Simply analysing how a consumer holds or enters keystrokes on their device, or hundreds of other behavioural data points, can verify that there is a human behind the transaction and that it is the right human. At the end of the day, trusting the online environment is what matters.”