Your wallet is likely a little more technically advanced than it was just a few months ago. Many of us have received replacement credit cards with chips embedded as the U.S. finally migrates away from reliance on easily counterfeited magnetic stripes. Given these advances, we expect see a major reduction in POS card fraud— currently, $3 billion is lost annually though counterfeit cards at the point of sale. But that doesn’t mean we’ll see a drop in overall fraud.
So how is fraud evolving and what can you do?
With billions of dollars of fraudulent activity in play, we know that criminals won’t retire. The move to chip cards has already caused a shift in fraud patterns to card-not-present online fraud and application fraud – resulting in a 2 to 3 times increase in application fraud.
Asking customers to wait is like asking them to leave.
Application fraud during onboarding (or the fear of application fraud) is causing some pretty significant headaches across organizations, from marketing and finance to customer service departments. Good applicants face frustrating delays causing customer abandonment, while back offices are overloaded with inaccurate reviews.
We estimate 15-20% of good applicants give up because of cumbersome fraud prevention. And even passing doesn’t necessarily mean an immediate approval decision.
Fraud is about more than the direct monetary losses, and the old approach is preventing scalable business models and acquisition of good customers.
Intelligent identity management tools can help prevent and detect account-level fraud in an efficient and proactive way. Looking beyond verification to behaviors, patterns and links, effectively layering in digital fingerprinting technologies, and taking a smart approach to authentication are critical to growing acquisitions. Doing this can improve approval rates and fraud detection, ultimately impacting bottom lines and minimizing reviews – all without sacrificing the customer experience.