Static fraud prevention won't cut it in the e-commerce age
Online hackers and fraudsters are well-prepared to exploit the holidays as e-commerce sites will see a drastic increase in online traffic and sales between November and January.
On Nov. 11, a record-breaking Singles’ Day took place yet again, with online retailers like Alibaba exceeding over $25 billion in sales and averaging 250,000 payment transactions per second.
Most existing fraud-detection systems are simply not built to withstand such a heavy demand surge. There are tactics for online businesses to better protect themselves and their customers against online fraud.
Traditional methods of screening for fraud commonly rely heavily on rules and 24-hour manual monitoring. However, such methods are static and reactive. When online hackers are able to bypass the system, traditional solutions simply layer more rules and authentication barriers for tighter security, but always at the expense of user experience, damaging sales.
Instead, businesses should move toward active surveillance, which involves nonintrusive behavior monitoring and real-time analysis to block out fraudsters while passing genuine users. Rather than building a wall of static defense, active surveillance captures more real-time data to understand if a user is malicious or genuine.
The beauty of fully automated fraud solutions lies in enabling businesses to scale aggressively, especially at the most crucial moments. This is in direct contrast to reliance on manual monitoring, which results in limited scalability, bottlenecks in processing orders, and poor customer experience. Furthermore, it is very costly to scale and train the manual review team just for holiday sales periods to meet the influx of traffic.
To keep up, businesses should switch to real-time processing and full automation, which will arm them with the necessary protection whenever, wherever. With the immense growth of e-commerce year-on-year, and record-breaking holiday sales, businesses must be sufficiently prepared to capitalize on the growth potential.
Account takeovers have become a growing problem: It is no longer safe to assume existing accounts are always accessed by the same user since user data can be bought and sold off the black market. This is exacerbated by the fact that more companies are starting to build an online ecosystem with more services in one single platform (e.g. Alibaba, Amazon), and a compromised account allows the fraudster to access multiple services with one login.
Businesses should not only focus on securing payments that come through, but also pay attention to account creation and logins to prevent them from becoming additional vulnerable points of exploitation.
Following these rules will allow you to grow your sales aggressively instead of inching slowly in the shadows cast by fraudsters.