This week, fraud managers, Trust & Safety professionals and service providers gathered in Las Vegas for the annual Merchant Risk Council (MRC) conference. OWI attended this event with great interest, as identity is at the core of fraud prevention, especially in ecommerce. Today, we share our observations, key takeaways, and industry trends from the conference.
Fraud prevention’s transition to identity verification and authentication
In traditional brick-and-mortar retail, major retailers prevent store theft by deploying in-store loss prevention teams. Loss prevention, as an organizational capability, was located in the field. But as commerce moved online, loss prevention evolved to fraud prevention, and these organizational capabilities moved to the corporate office. Throughout the ecommerce industry, fraud prevention has focused on identifying the fraudsters, preventing fraudulent transactions, and reducing losses.
More recently, fraud managers have increasingly focused on the trustworthy customers as declining good transactions from trustworthy customers may result in the loss of the long-term value of the customer. Friction created in the customer experience has become a customer deterrent.
With the customer experience becoming a key driver for sales and revenue, fraud prevention is evolving to Trust & Safety, and the organizational capabilities are quickly becoming C-Suite strategic priorities.
A strong sense of Trust & Safety is an integral part of any digital interaction. Economic participation declines when notions of trust and safety erode, and with OWI’s Five Pillars of Trust & Safety, organizations can lay the groundwork and foundation in the design and operations of their businesses to foster greater economic participation. You can read more about OWI’s Five Pillars of Trust & Safety in our whitepaper.
At the core of Trust & Safety is identity, and with the increased focus on trustworthy customers, efficient and accurate identity verification is critical to new account openings and card-not-present transactions in ecommerce. Furthermore, efficient and robust identity authentication is critical to prevent account takeovers.
Industry-leading merchants view Trust & Safety — along with identity verification and authentication — as competitive advantages to their customer experiences, and at MRC Vegas 2018, it was clear who is winning and who is losing in this market transition.
The adoption of emerging technologies
With the evolution of fraud prevention to Trust & Safety, merchants are quickly adopting emerging technologies across the Five Pillars of Trust & Safety. For identity verification and authentication, merchants are now leveraging email intelligence, mobile data, biometrics, and behavioral analytics to identify trustworthy customers and fraudsters.
At MRC this week, OWI heard countless stories of how these emerging technologies are improving the customer experience, reducing friction during the customer experience, and more efficiently and accurately identifying the trustworthy customers from the fraudsters, resulting in increased revenues and higher customer satisfaction.
Customer experience as a strategic imperative
With the industry’s evolution to Trust & Safety, a stellar customer experience is proving to be a winning strategy. As merchants prioritize Trust & Safety, viewing the concept as a strategic and competitive advantage, senior leadership teams are recognizing the value and are quickly making Trust & Safety initiatives an organizational imperative.
The siloed approach to frontend design, fraud prevention, security, risk and compliance and the like are gone. The leading merchants at MRC this week attested to how they are bringing these teams together to focus on improving the customer experience and promoting Trust & Safety across their platforms. The leading merchants view the customer experience as a strategic imperative, and more merchants continue to get onboard.