Retail, CPG and Logistics
E-commerce Fraud: Securing the Entire Customer Journey
Cybersecurity threats have become prevalent in all online transactions. Topping the list of the most vulnerable areas for online fraud are e-commerce stores.
As customers move from brick-and-mortar stores to e-commerce platforms for their buying needs, securing customer journeys from online frauds is imperative for e-commerce stores. E-commerce frauds are illicit online transactions by cyber criminals. These crimes directly impact merchants and customers. Frauds like illicit and illegal activities cause heavy losses. Besides, online fraud can have a deep impact on a business’s reputation and customer relationships. One of the worst consequences of e-commerce fraud is the loss of customer trust and loyalty.
Some Common Types of E-commerce Fraud
Account Takeover (ATO): ATO, also known as identity theft, is a cybercrime where hackers access personal and financial details to make illicit purchases.
Triangulation Frauds: Fraudsters create fake websites and lure buyers to make purchases on the site and never deliver the products.
Credit Card Frauds: Credit card fraud is when hackers use credit cards owned by someone else to make purchases on an e-commerce platform.
Friendly Fraud: Fraudsters make false claims to merchants that the product was not delivered and demand money back for their purchases.
Denial of Inventory: In this case, scammers add items to their shopping carts without purchasing them just to prevent genuine customers from buying them.
Besides these, there are several other ways in which cybercriminals illegally access the confidential data of customers and cause financial losses for both the buyer and the seller. Hence, comprehensive fraud detection and management strategies are required not just to provide a safe and secure shopping experience for buyers but also to prevent loss to the business.
In order to prevent fraudulent activity, e-commerce retailers need to assess potential risks to different online transactions on the website. Emerging technologies help in assessing risks and preventing fraud.
Technologies used for E-commerce Fraud Prevention
Leveraging Machine Learning (ML)
ML, a subset of Artificial Intelligence (AI), is a self-learning technology where algorithms learn decision-making based on training data. ML algorithms can easily distinguish between legitimate transactions and illicit ones. These algorithms study the transaction patterns on different e-commerce platforms and detect fraudulent activities based on this knowledge. ML bots are highly effective in preventing e-commerce fraud.
Predictive analysis is a technique that leverages data, past trends, and other functional variables to predict fraud. The software studies data such as customer behaviour, buying patterns, browsing patterns, transaction history and more, to accurately predict cybercrimes. Predictive analytics enable cybersecurity professionals to take preventive measures to secure the platform.
Graph technology is an intuitive approach that provides insights into multiple layers of data breaches. In graph technology, data such as consumer behaviour, transaction history, channel related information are all represented in a graphical manner. Specific data points are depicted as nodes in the graph. Information related to fraud and illicit transactions can be accessed by firing queries on these data points. Graph technology also provides alerts to data analysts when fraud is detected. This facilitates the analysis of real-time data to prevent fraud.
The onus of preventing e-commerce fraud lies with online merchants and they must take the necessary steps to prevent fraudulent activities.
Preventive Measures for E-commerce Frauds
- Secure Vulnerabilities
The website must be checked to find out the vulnerabilities in the existing website and secure them.
- Website Audits
E-commerce merchants must perform regular website audits to ensure that the website is safe from fraudulent activities.
- Implement Multi-layered Security
Multi-layered security is implemented by using more than one method of fraud detection such as biometric identification, OTPs, etc. Multi-layer security strengthens the security of an e-commerce store.
- Keep Track of Customers’ Journeys
One of the most effective methods of fraud prevention is maintaining a record of customer touchpoints such as orders shipped, received, accepted and returned, etc.
- Ensure Authorised Transactions
Online merchants can ensure authorised transactions by asking for the CVV (Card Verification Value) code on the credit/debit card of the customer.
- Ensure that the Address is Genuine
Scammers usually provide anonymous addresses that are fake. Online merchants should ensure that the address is authentic to allow the transaction.
The E-commerce market has been growing consistently over the past few years and the pandemic has accelerated the rise of e-commerce stores worldwide*. However, as online transactions increase, so do fraudulent activities. E-commerce merchants need to take appropriate measures to ensure a secure shopping experience for buyers. This is the reason the fraud detection and prevention market is experiencing unprecedented growth. According to a report by Markets & Markets 2020, “The post-COVID-19 fraud detection and prevention market size is expected to grow from USD 20.9 billion in 20200 to USD 38.2 billion by 2025!”
About Infosys BPM Content Marketing Operations
In order to grow and sustain in today’s fast-paced digital business ecosystem, almost every function and practice has the necessity of one key asset…The right process.
Our Content Marketing Operations (CMO) team is made up of experienced digital content, campaign, and design experts who help in innovating and evolving processes for marketing operations at scale. This practice not only fulfils marketing requirements at the speed required to keep up in today’s fast-paced world but also transforms processes that drive better time and cost efficiency.
*For organizations on the digital transformation journey, agility is key in responding to a rapidly changing technology and business landscape. Now more than ever, it is crucial to deliver and exceed on organizational expectations with a robust digital mindset backed by innovation. Enabling businesses to sense, learn, respond, and evolve like a living organism, will be imperative for business excellence going forward. A comprehensive, yet modular suite of services is doing exactly that. Equipping organizations with intuitive decision-making automatically at scale, actionable insights based on real-time solutions, anytime/anywhere experience, and in-depth data visibility across functions leading to hyper-productivity, Live Enterprise is building connected organizations that are innovating collaboratively for the future.