Despite a reported increase in fraud budgets, Experian’s 2019 Global Identity & Fraud Report found 55 percent of businesses across the globe experienced an increase in online fraud-related losses, which emphasizes the need for e-commerce merchants to assess the effectiveness of their card-not-present fraud detection strategies.
According to Chris Ryan, Experian’s senior fraud solutions consultant, the primary challenge for e-commerce risk professionals is the consumer demand for convenience. “E-commerce merchants are often limited in the tools that can be used because of the demand for those tools to be primarily invisible to the individual consumer.”
When it comes to more covert tools, Ryan said there have been some exciting wins lately. “For the most part, the activity between the individual and e-retailer is inconsistent, which makes it harder to collect that data of user behavior on the merchant side.”
As a result, e-retailers need to rely on a set of layered tools that get to the right prediction by combining patterns of behavior that are associated with an identity. “Covert tools that monitor the consumer’s pattern of behavior everywhere can detect when that behavior diverges from merchant to merchant,” Ryan said.
Being able to monitor the device itself is an additional fraud detection tool that can be added to a layered defense strategy. “Being able to reliably recognize attributes of a device which would not be easily manipulated by a criminal trying to conceal it. Criminals can disguise their IP address, or bounce around proxy servers, but there are deeply embedded characteristics that would be difficult and costly to change that can be detected. Those two layers have been tremendously helpful in e-commerce,” Ryan said.