Businesses Adjusting to Combat Fraud in the Era of Digital Dominance
In the rapidly evolving world of eCommerce, businesses are grappling with new security challenges as they move vast amounts of sensitive consumer data online. The shift to digital shopping channels has seen a significant 60% increase in the last year, making it crucial for companies to adapt to these new risks.
One such adaptation is the integration of machine learning and tokenization into digital transaction systems. Companies like Siemens, Continental, VeChain, Giesecke+Devrient (G+D), and GFT have been at the forefront of this transformation, using these technologies to simplify payment processes, enable real-time transactions, and reduce fraud risks.
Machine learning, in particular, is proving to be a game-changer. It uses customers' historical data and patterns to determine the legitimacy of purchases, separating normal behaviours from those of potential nefarious actors. By analysing data from millions of transactions, machine learning solutions can identify account takeovers, confirm whether the account user is the true owner, and even deal with friendly fraud, where customers claim they didn't place an order after receiving a product or service.
The Global Digital Shopping Index report for 2021 focuses on eCommerce fraud, highlighting the overall volume of fraud attacks has risen, despite a decrease in the variety of fraud attacks. However, the report does not discuss the potential overwhelming of businesses by a surge of digital transactions or provide specific statistics or trends related to the variety, volume, or success rate of fraud attacks.
Despite these challenges, machine learning tools, such as those at Cybersource, are using insights from VisaNet's dataset, which processes data from 141 billion transactions per year, to paint a clearer picture of potential signs of fraud.
As for consumers, over 40% consider data protection, returns, and refunds as important features of their online shopping experience. Yet, the report does not mention the importance of these aspects to consumers in their online shopping experience.
In light of these developments, businesses are urged to utilize tokenization and machine learning tools to manage fraud in the digital environment. By doing so, they can ensure a secure and seamless shopping experience for their customers, while also protecting their own interests.
