Businesses adapt to combating fraud in the predominantly digital modern landscape
In the rapidly evolving digital landscape, businesses are increasingly turning to advanced tools like tokenization and machine learning to combat fraud in eCommerce. According to the latest report from The Global Digital Shopping Index, successfully managing fraud requires exploring and relying on these cutting-edge technologies.
The report, titled the 2021 eCommerce Fraud Report, is expected to provide valuable insights and recommendations for businesses navigating the digital era. The report is based on data from over 141 billion transactions processed annually through VisaNet, offering a comprehensive view of the current fraud landscape.
As digital shopping channels see a 60% increase, manually reviewing transactions for fraud can quickly overwhelm current fraud management systems. This is where machine learning comes into play. By analysing customer historical data and patterns, machine learning can assist in dealing with friendly fraud cases, proving legitimacy, and reducing the need for manual reviews.
Moreover, machine learning solutions can help businesses cut response times and update fraud models automatically, ensuring a swift and efficient response to potential threats. They can also remove human bias from the decision-making process, establishing cause and effect relationships about transactions.
Tokenization, another essential tool, replaces sensitive account information with unique digital identifiers called tokens during a transaction. This ensures that no sensitive information is exposed, providing an additional layer of security. Companies like VeChain use tokenization combined with AI-driven smart contracts to automate and reduce manual checks in online transaction processing, especially within supply chain contexts.
The report, however, highlights that while the variety of fraud attacks has decreased, the overall volume has risen. This underscores the importance of adapting and updating fraud management strategies in response to the increasing digital transactions.
In addition, the report focuses specifically on eCommerce fraud, offering valuable insights into the current state of fraud in digital shopping. As eCommerce continues to dominate the retail space, moving vast amounts of sensitive consumer data online, it is crucial for businesses to prioritise data protection, returns, and refunds, as over 40% of consumers surveyed by Cybersource consider these features important in their online shopping experience.
Machine learning can also help identify account takeovers and prevent further harm, further emphasising its importance in the digital age. As the world continues to lean into digital technologies and eCommerce, businesses must stay vigilant and adapt to new tools and technologies to protect their customers and their bottom line.
