Is fear of fraud standing between you and good customers?

Your busi­ness is grow­ing fast and onboard­ing good cus­tomers quick­ly is para­mount, but you need to be sure they are who they say they are. How do you pro­tect your­self and your cus­tomers from fraud?

Trust is the lifeblood of a suc­cess­ful busi­ness, allow­ing you to con­nect with your cus­tomers in a sus­tained and mean­ing­ful way, while build­ing your brand and grow­ing your sales. Yet, in the dig­i­tal age it is a com­mod­i­ty in short sup­ply and firms are under pres­sure to bridge the grow­ing divide between the phys­i­cal and online worlds.

Part of the prob­lem is that, in the past, firms usu­al­ly met their cus­tomers before doing busi­ness with them, mak­ing it eas­i­er to estab­lish a basis of trust. Now, how­ev­er, most of these inter­ac­tions take place online, con­sumers are more scep­ti­cal, and the risk of fraud is ris­ing.

Iden­ti­ty fraud loss­es in the US, caused by crim­i­nals ille­gal­ly using vic­tims’ infor­ma­tion to steal mon­ey, surged to $24bn in 2021, accord­ing to the con­sul­tan­cy Javelin Strat­e­gy & Research. That was up 79% from 2020, while the num­ber of adults impact­ed grew by more than 50% to 15 mil­lion.

Risks to brand perception

In the cur­rent cli­mate, busi­ness­es face a series of threats, not least of which are those that impact per­cep­tions of their brand.

Pub­lic trust in insti­tu­tions of all kinds is already at a low and cus­tomer loy­al­ty is no longer a giv­en. Near­ly six in 10 peo­ple say their default ten­den­cy is to dis­trust some­thing until they see evi­dence it is trust­wor­thy, accord­ing to the lat­est Edel­man Trust Barom­e­ter, which tracks pub­lic trust in busi­ness­es, NGOs, gov­ern­ment and the media.

To pro­tect them­selves, com­pa­nies must ensure that their cus­tomers’ per­son­al data is safe online and their iden­ti­ties are pro­tect­ed. Robust defences must be imple­ment­ed to avoid breach­es and the rep­u­ta­tion­al dam­age they can cause.

Yet, firms are also expect­ed to pro­vide a user expe­ri­ence (UX) that is sec­ond to none and many strug­gle to strike a bal­ance. In a rush to for­ti­fy their defences, they deploy oner­ous secu­ri­ty sys­tems that impair the func­tion­al­i­ty of their apps and web­sites, mak­ing them less enjoy­able and less con­ve­nient to use.

That in turn makes it hard­er to onboard high-qual­i­ty cus­tomers, harms con­ver­sions and puts prof­itabil­i­ty at risk.

San­jay Gup­ta is senior vice-pres­i­dent and man­ag­ing direc­tor at HooYu, a Mitek com­pa­ny. He says he under­stands fraud is a big con­cern but cau­tions that it’s a mis­take to think that safe­ty and secu­ri­ty online should come at any price.

“Deliv­er­ing a poor user expe­ri­ence is a far big­ger threat to your busi­ness. Nine­ty-eight to 99% of your cus­tomers pose no risk at all and the cost of alien­at­ing them is high.”

Striking the right balance

Accord­ing to a recent YouGov sur­vey for Mitek, 79% of UK respon­dents said they want­ed their bank to adopt the lat­est tech­nol­o­gy to keep their accounts safe. Yet 19% said they aban­doned open­ing an account because it was too time con­sum­ing or dif­fi­cult.

It mir­rors wider research that shows the hard­er a web­site is to use, the more like­ly a vis­i­tor is to leave before com­plet­ing a trans­ac­tion. Accord­ing to the Bay­mard Insti­tute, a UX research con­sul­tan­cy in Den­mark, some sev­en in 10 vis­i­tors to an ecom­merce site aban­don their shop­ping carts before reach­ing check­out.

In a fast-chang­ing dig­i­tal mar­ket, com­pa­nies must adapt. Yet some are encum­bered by lega­cy IT sys­tems and can’t inno­vate fast enough. Oth­ers mean­while can’t find the exter­nal sup­port they need and are out­paced by more nim­ble rivals.

How­ev­er, Gup­ta believes that with the right tech­nol­o­gy and strat­e­gy, busi­ness­es can deliv­er both excep­tion­al dig­i­tal expe­ri­ences and robust fraud pre­ven­tion at the same time.

His com­pa­ny Mitek is an AI-based iden­ti­ty solu­tion provider offer­ing a com­pre­hen­sive set of native and exter­nal iden­ti­ty ver­i­fi­ca­tion sig­nals with pow­er­ful orches­tra­tion and con­fig­u­ra­tion tools to build tai­lored onboard­ing work­flows. It has pow­ered bespoke solu­tions for thou­sands of the world’s lead­ing banks, fin­techs and mar­ket­places. “Too often firms rely on a nar­row menu of tools that are not flex­i­ble enough to meet their needs,” Gup­ta explains. “Cus­tomiza­tion and con­trol are key when build­ing an effec­tive solu­tion.”

Know your customer

The Nas­daq-list­ed busi­ness is best known for tech­nol­o­gy that allows firms to ver­i­fy people’s iden­ti­ty with patent­ed algo­rithms that cap­ture, clas­si­fy and ver­i­fy pho­tos of iden­ti­ty doc­u­ments such as pass­ports, ID cards and dri­ver’s licences.

How­ev­er, it is its plat­form tech­nol­o­gy that is rev­o­lu­tion­is­ing the ‘know your cus­tomer’ (KYC) jour­ney for com­pa­nies. The tech can be eas­i­ly incor­po­rat­ed into a firm’s dig­i­tal archi­tec­ture on a ‘low code, no code’ basis with­out an army of devel­op­ers, and is cus­tomis­able to match dif­fer­ent cus­tomer risk, prod­uct, or life­cy­cle sce­nar­ios. Cru­cial­ly too, it sim­pli­fies and stream­lines the expe­ri­ence of the end user.

“The plat­form is engi­neered to max­imise onboard­ing suc­cess,” says Gup­ta. “It enables organ­i­sa­tions to cre­ate fast, flex­i­ble and easy-to-con­fig­ure work­flows that meet their exact needs, ensur­ing new cus­tomers can be onboard­ed quick­ly and with min­i­mum fric­tion.”

To date, Mitek has worked with an array of dif­fer­ent busi­ness­es from tech star­tups such as Airbnb to major retail banks such as Chase.

For busi­ness­es look­ing to build last­ing and trust­ed rela­tion­ships, Gup­ta advis­es being trans­par­ent with con­sumers. “Trust doesn’t just come overnight; it’s built grad­u­al­ly and through the ups and downs. Firms who show that they are seri­ous about secu­ri­ty, tough on fraud and com­mu­ni­cate what they are doing and why will have the best results. This trans­paren­cy in com­mu­ni­ca­tion will send the right mes­sage to the cus­tomer.”

He also advis­es com­pa­nies to edu­cate cus­tomers about advances in cut­ting-edge secu­ri­ty process­es such as facial recog­ni­tion and bio­met­rics. “These tech­nolo­gies have attract­ed neg­a­tive head­lines but when used prop­er­ly and eth­i­cal­ly they can be high­ly effec­tive. In time, they will replace pass­words as the default method of entry to dig­i­tal spaces. So, it is up to com­pa­nies to explain the ben­e­fits, dis­pel the myths and show that pri­va­cy isn’t at risk.”

Most impor­tant­ly, Gup­ta says firms must remem­ber that most peo­ple are hon­est and a heavy-hand­ed approach to fraud and ver­i­fi­ca­tion can be coun­ter­pro­duc­tive.

“Cus­tomer expe­ri­ence and safe­ty on your plat­form is the num­ber one pri­or­i­ty. Strong trust­ing rela­tion­ships lead to busi­ness growth and cus­tomer loy­al­ty, it’s as sim­ple as that.”

For more infor­ma­tion please vis­it miteksystems.com

Pro­mot­ed by Mitek Sys­tems