Fraud Prevention in 2021 — How to Protect Your Clientele?

As most of the business go digital, especially in the days of pandemic, your customers become a tasty treat for the online scam. Let’s see what can be done to protect them.

Stopping Fraudsters at the Gates

Since retailers are going digital these days, a reliable fraud prevention solution becomes a #1 necessity. 

Online scammers keep on evolving and so do their methods. Luckily, fraud management has some effective techniques to offer. Let’s see what your anti-fraud strategy must include to safeguard your business.

1. Prevent Fraud from Abroad

This is vital if you have customers from other countries. While the likes of PayPal or Maestro payment gateways are used internationally, they may not be very popular on the regional level.

For instance, in Europe the Giropay is in demand. Countries like India, Russia and Brazil have their own systems like OlaMoney or Qiwi. In France, they have their analogue of Visa — Carte Bancaire.

What does it all mean? Well, customers can pay in many ways. And your goal is to bring an extra layer of safety: Geo IP checks, Device ID and other ways to learn where your clientele are coming from and if there are any scammers among them.

2. Personal Profile

Big data isn’t always evil, as any other tool. Today’s banking system can apply it to quickly draw a portrait of your customer: their online preferences, spending habits, interests, needs, and so forth. 

With the smart AI algorithms at hand, such a safety system can detect an unusual behavior. In other words, it puts a fat question mark on the customer’s actions — “is it really that person or someone just pretending to be them?”.  

3. Self-learning = Success

Well, if such algorithms are really that smart, can they also learn on their own? Partly they can! The trick is that an anti-fraud system won’t just stick to a formulated personal profile till the rest of eternity.

A Machine Learning model will also carefully study new behavioral habits. Then it’ll match them with the activity of a certain device: smartphone, laptop, tablet, etc. In turn, this will help identify suspicious purchases and orders even more efficiently.

4. Starting a Dialogue

No matter how advanced and miracle-working your strategy is, you can’t hide it from your client. This is basically a relationship that you’re trying to build on mutual trust and respect.

So, should a purchase/order be declined, you’d best notify them why it happened, according to which criteria the decision was made and how they can revert it. Let your clientele help you, so you can help them in return.

5. Social Media to the Rescue

This method isn’t anything new, but it works. If the anti-fraud system declines a certain transaction, your best bet here is to double-check that the order came from a real person, who used their own money and real name.

A verified Facebook, LinkedIn or Instagram account could be a quick and valid source of confirmation. The thing is social media requires actual IDs — driver’s license, birth certificate, bank statement — more and more these days.   

So, Why Do You Need This?

Because when you care about your customers, it makes them feel like a part of the family. Especially when you know how incautious they can be: writing the PIN right on the credit card, never signing out of the e-wallet, using Wi-Fi at a café to buy stuff…

At the same time, fraud-prevention can’t be too disruptive. Your strategy should set adequate thresholds, so real customers won’t get frustrated after getting declined again and again, before they finally pass on your business.

This isn’t the easiest task though, as a bunch of factors should be considered: your business model, the clientele statistics, possible card fraud risk, etc. This, of course, best be outsourced to a professional service.