Online Fraud Is Increasing - Is Business Intelligence the Answer?
With the year on year rise in ecommerce, there is a corresponding rise in online fraud - in fact, according to Financial Fraud Action UK, this type of activity had increased by a quarter to £399.5 million in the first half of 2016. The most recent manifestation of this is the concept of “testing” - this is where the criminals try small purchases to check the validity of card details, before moving in for the kill.
According to the reports, there has been a 200 percent boost in this phenomenon since the beginning of 2017. Not only does this mean that innocent consumers are at risk of having their accounts emptied, but just to add insult to injury, many find that their credit rating is negatively affected by the acts of these fraudsters.
The link between business intelligence (BI) and fraud prevention might not seem obvious, but the point is that behavioural analytics can play a significant role in understanding and determining fraudulent behaviour. Data analytics can be used to identify and track patterns that can help reveal exactly how, when and where these criminals are operating. The more we know, the better the chances for merchants and payment processors to implement the appropriate safeguards. And the benefits go wider. Better data means refinements can be made to those annoying automated fraud protection protocols that sometimes flag your genuine transactions as fraudulent and lead to embarrassed and unhappy customers wasting time resolving the matter. Eight times out of ten, there is a “shoot the messenger” mentality where they decide to take their business elsewhere rather than risk a repetition of this kind of inconvenience.
The benefits are not restricted to ecommerce. Other segments within the Fintech umbrella are equally exposed to cybercrime - for example, those involved in wealth management are logically a prime target. Now is the time to consider how the smart use of BI can guide their prevention strategies.
The next evolution of fraud prevention
The applications of data analytics and business intelligence are well known and understood when it comes to digital marketing and customer relationship management. Fintech companies also need to be aware of this rapidly evolving technology, and the benefits it can bring in fraud detection and prevention, as well as its more traditional applications, such as providing insights into customer behaviour and market trends.
Sally Collins is a professional freelance writer with many years experience across many different areas. She made the move to freelancing from a stressful corporate job and loves the work-life balance it offers her. When not at work, Sally enjoys reading, hiking, spending time with her family and travelling as much as possible.
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