Sunday , July 12, 2020

COMMENTARY: Why Trust Is the Future of Fraud Prevention

“Can I trust you?” 

The ability to answer this seemingly simple question can help online merchants stop fraud and increase sales like never before.

In fact, it’s a question that we at Kount answer billions of times per year for our customers. 

In today’s digital world, fraud-prevention solutions use artificial intelligence to quickly and accurately detect fraud through a combination of supervised and unsupervised machine learning. With this capability, businesses can identify suspicious transactions with a high level of precision and make real-time decisions for their business and their customers.

Wiskirchen: “It’s time for the industry to adopt a smarter approach—one based on trust.”

But the reality is that fraud-prevention solutions in the market could—and should—do more than just prevent fraud. Modern fraud prevention, powered by adaptive AI, has the capability to unleash hidden revenue, open new markets, and expand business opportunities.

This is crucial because the front end of eCommerce—namely, digital transactions and global commerce—has changed how businesses find, serve, and interact with their customers. Yet, behind the scenes, fraud prevention has been scrambling to keep up. 

How do we bridge this gap? It’s time for the industry to adopt a smarter approach—one based on trust. We’re not talking about an identity-verification tool, but rather a real-time identity-trust assessment. After all, behind every transaction is an identity, and the easiest way to prevent fraud is to determine in real time if that identity is trustworthy.

For merchants, it all boils down to the same question: “Can I trust that the identity behind this transaction is really a legitimate customer?”

Once merchants are able to answer that question and verify the customer’s identity trust with a high degree of certainty, they can not only put an end to fraud, they can unlock new revenue opportunities and offer a truly personalized user experience.

This ability is critical to the future success of every digital business. In fact, 41% of shoppers say they would increase their spending with a merchant or retailer if they received a more tailored experience, according to 451 Research’s Voice of the Connected User Landscape: Connected Customer report. What’s more, 40% of digital shoppers say a “fast and convenient checkout experience” would play a role in increasing their loyalty.

For merchants, the ultimate goal is the ability to quickly catch high-risk transactions while allowing legitimate transactions to move forward without any friction. Fraud, however, is often a byproduct of identity abuse. So, by focusing on identity trust, merchants can root out the real issues rather than treating the symptoms.

—Brad Wiskirchen is chief executive of Kount Inc., Boise, Idaho.

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