Last week, Sift partnered with CardNotPresent.com to present the webinar “Building Lasting Loyalty: How to Evolve from Fraud Prevention to Digital Trust”. The panel of experts included our Trust & Safety Architects Kevin Lee and Jeff Sakasegawa, who were joined by CNP editor-in-chief DJ Murphy. Here’s what they discussed.
1) Legacy approaches to fraud-fighting can’t cut it.
The fraud landscape has changed. Fraudsters are employing increasingly complex behavior, tactics, scams, and technology — and they’re doing so at scale. Using bots and machine learning, fraudsters are able to propagate thousands of fake accounts or account takeovers at a time.
At the same time, consumer expectations have changed. Customers expect great digital experiences: speedy checkout and delivery, delightful content, and a safe online environment.
Take chargebacks, for example. When a chargeback happens, a significant period of time passes before you can learn why it happened. You’re applying new mechanisms to prevent fraud on fraud that might’ve happened four, fice, or six months ago. By that time, the chargeback has hurt your bottom line, and your impacted customers are left dissatisfied. A rules-based approach does nothing to protect you or your customers from further insult.
Clearly, the reactive approach to fraud-fighting is insufficient. Businesses cannot expand without worrying about incurring risk. By releasing a new product or experience, companies incur the risk that they might lose customers to new vectors of fraud. In short, traditional fraud prevention solutions are killing growth.
2) Digital Trust & Safety is the only approach that balances growth and security.
Digital Trust & Safety aligns risk and revenue decisions so businesses can create excellent customer experiences from start to finish. Instead of choosing between expansion and safety, Digital Trust & Safety recognizes that the two are one and the same. In doing so, it empowers businesses to invest in both.
The best companies are designing low-friction customer journeys. Every single point in the customer lifecycle — whether you’re creating an account, logging in, buying, or posting content — is an opportunity to up-sell, cross-sell, or get more engagement from your customer base. But each point is also an opportunity to incur risk: account takeover, payment fraud, spam, and scams. Instead of asking siloed teams to take on each type of fraud, or to manage each point along the journey, Digital Trust & Safety combines protection and growth.
3) It’s time to update your mindset, processes, and fraud infrastructure.
Digital Trust & Safety is an approach that encompasses your company’s mindset, processes, and fraud infrastructure. To evolve, businesses have to move from a reactive mindset to a proactive mindset. Instead of picking up the pieces after the fraud occurs, Digital Trust & Safety necessitates thinking about the future, and how to stop fraud before it happens.
Drawing on that mindset, businesses must change their processes and structure. To unlock frictionless experiences, you have to think about the customer lifecycle holistically — which means you need a holistic snapshot provided by stakeholders across the company. Under a Digital Trust & Safety approach, teams are cross-functionally aligned. For example, the fraud team interacts with the product team to make sure risk management is baked into the entire process. They set goals not just for their team, but that tie into the company or a product. In that way, Digital Trust & Safety enables businesses to grow without risk.
And of course, this approach must be underpinned by technology. To build customer loyalty, businesses have to use technology to customize experiences for each user based on the risk they pose to the company. Businesses that are using a third-party system that’s rules-driven should ask how often those rules are updated. If the third-party service uses machine learning, companies should ask if they’re building custom models for the business, whether those models are up-to-date, and what data they’re using to build those models.
By updating these three aspects of the business, companies can start unlocking a frictionless experience for their customers. Only then can they move into new territories, launch new products, and win at scale.