Online fraud is seemingly an increasing risk for businesses and organizations. Read our report for insights about how fraud prevention decision-makers are looking towards automated fraud management and machine-learning (ML) solutions.
PayPal recently commissioned a research study “Adaptive ML: The Future of E-Commerce Fraud Management," conducted by Forrester Consulting to understand the role of fraud management in today’s global firms. The findings revealed that as the world continues on its digital transformation journey, it is critical for organizations to have a strong enterprise fraud management (EFM) and security strategy.
Most firms have invested in tools and third-party partners to bolster their fraud management program, but it may not be enough – 97% of global fraud prevention decision-makers at e-commerce companies experienced fraud in the past 24 months.* In order to keep up, and transform with the world around them, fraud prevention decision-makers are looking toward automated fraud-management, and machine learning (ML) solutions.
Customers demand a frictionless, secure experience, and companies know they’ll lose business if they fail to provide. Fraud prevention specialists surveyed stated that EFM was critical to improving customer experience, increasing revenue, expanding into new markets, and achieving their organizations’ digital transformation initiative.*
Firms understand EFM is a business must and have invested in solutions and third-party vendors to support their EFM strategy. The most valuable components referenced in this survey are rules-based software solutions (74%), machine-learning software solutions (70%), and advanced auditing and reporting capabilities (64%).*
When it comes to vendors, respondents noted looking for someone to help with the heavy lifting. The most important considerations when selecting a vendor are the ease of implementation, the ability to provide advanced technology, and the overall partnership and industry expertise.*
Respondents whose organizations have partnered with a fraud management vendor experienced more accurate identifications of fraud, a better customer experience, and better fraud resources.*
Fraud management strategies aren’t foolproof. 97% of respondents have experienced fraud in the past 24 months. The most common types were chargeback, account takeover (ATO), and transaction fraud.*
Once fraud is identified, respondents said it can take weeks to resolve. This has resulted in negative customer experience, lost sales and revenue, wasted labor resolving issues, and an inaccurate view of the customer.*
Firms are experiencing fraud incidents because their EFM resources are inadequate. Respondents indicated that their organizations’ biggest challenges include:
Without proficient tools and resources, firms will continue to experience – and struggle to deal with – fraud incidents.
Digital transformation will solve most EFM challenges and reduce fraud attacks. The shift to automated ecommerce fraud prevention will create more accurate and efficient reporting and management.
81% indicated that adaptive machine learning would solve their companies’ top ecommerce fraud management challenges, and 64% plan to invest or increase investment in EFM this year.*
Respondents expected these investments to decrease operational and compliance costs, their organizations’ overall risk, and response time, all while increasing customer satisfaction.
The pandemic accelerated digital ecommerce and moved fraud management in retail from nice-to-have to absolutely essential.
Our study found that:
Download the full study to discover what fraud specialists think of adaptive machine learning and how it can transform fraud management.
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