Some retailers focus on either fraud mitigation or a better customer experience, but they’re not mutually exclusive. The recent holiday shopping season clearly depicts the need to optimize against both of these dimensions as consumers increasingly preferred the convenience of digital channels when shopping, while sophisticated fraudsters considered it prime time for upping their digital thievery efforts by looking for vulnerable gaps in security.
The 2022 holiday season can provide insight into consumer expectations and fraudster tactics for the New Year. According to our 2022 Holiday Shopping Report, nearly three quarters (72%) of consumers said they would do at least half of their holiday shopping online. Our 2022 Digital Holiday Fraud Research revealed the suspected fraud rate from ecommerce was 127% higher between Thanksgiving and Cyber Monday compared to the rest of the year.
While fighting fraud is critical during the holidays when the number of transactions increases exponentially — it’s equally important the rest of the year.
Our 2022 Digital Fraud Trends Report findings illustrated consumers’ high expectations for retailers to provide safe and smooth experiences:
The most widely adopted authentication solutions fail to address emerging fraud tactics because they’re unable to identify devices entering your network. This can leave you blind to first-time fraud attacks and sophisticated fraudsters cycling through devices.
Fraudsters use mobile emulators to hack victims' devices, access device identifiers, spoof GPS locations the device is known to use, and ultimately, give the appearance they’re legitimate customers accessing accounts from known devices.
It’s critical to have defenses in place to minimize your organization’s risk exposure while also providing consumers the straightforward digital experiences they demand.
So, how do you maximize digital fraud capture while minimizing friction against good customers?
Device Proofing is a powerful combination of layered insights about device history and reputation, device-to-identity linkages and user behavior. Working in tandem, these capabilities employ robust device recognition technology risk and authentication strategies, as well as behavioral analytics, to reduce friction, manual reviews and false declines — all while providing a friction-right user experience.
Device Proofing doesn’t rely on one-level security to mitigate fraud; rather it takes a three-pronged approach. The culmination of these security defenses helps ensure you approve good transactions, and minimize false declines, fraud and manual reviews.
Recognizing internet-connected devices without requiring users to enter personally identifiable information (PII), Device Risk uses insights from a global consortium of over 6,000 fraud analysts and 10 billion+ known devices to flag possible fraud while allowing legitimate transactions through faster. It also tracks relationships between devices, accounts, device history, and fraud feedback, telling you whether the device being used has been linked to fraudulent behavior in the past. Best of all, this all happens in the background so it doesn’t disrupt the customer experience.
Advanced analytics and searching capabilities help you spot suspicious transaction and device patterns, which then enables you to quickly discover hidden connections among devices and accounts to uncover fraud rings.
Device-based identity resolution adds an extra layer of protection by corroborating users’ digital information against authoritative offline and online consumer data; in short, determining if the user’s identity links to the specific device being used.
Using this data, identity resolution assesses whether the device is likely in the hands of the individual who owns it, and intelligently and reliably sorts users into high- and low-risk buckets, even capturing first-time seen devices. This allows you to quickly identify low-risk customers — regardless of whether you’ve seen them before — and give them the streamlined user experience they desire.
Decisions about the riskiness of consumers need to be made early in the onboarding process, but many authentication platforms designed to detect or reduce fraud rely on static, historical, and potentially incorrect or incomplete data.
On the other side of the coin, Behavioral Analytics uncovers and tracks hidden fraud patterns and behaviors, such as prolonged field entry timing or application switching, evaluating risk behind the scenes so it doesn’t interrupt the shopper experience. Even fraudsters hidden behind proxy servers, TOP networks, VPNs and other anonymizing technology are identified.
Together, these device proofing techniques provide a powerful way of understanding potential for risk of fraud earlier in the customer lifecycle.
TransUnion Device Proofing offers powerful fraud-fighting capabilities by layering insights about device details, device reputation, identity data and user behavior, giving you the tools you need to reduce friction, false declines and manual reviews. Our powerful device recognition solutions and unique device intelligence are based on more than 10 billion known devices.
Today, there’s no need to choose between fraud mitigation or a streamlined user experience — you can have both. For more information, visit the TruValidate page.