Balancing Fraud Prevention with Welcoming New Customers

Balancing Fraud Prevention with Welcoming New Customers

February 6, 2020

by Janet Wagner for Card Not Present | Sponsored by Ekata

Every platform with users has an onboarding process. What that process looks like depends on many factors, including the company industry, company location, and fraud prevention tools used throughout sign-up.

Consumers don’t want to go through a lot of hoops or have to wait long to use a digital platform. In fact, 73 percent of digital platform users think that when registering for an account, the process should happen instantaneously. And, when consumers experienced frustration using a digital platform, 66 percent did not go through with opening an account on at least one occasion.

Account sign-up is often the first stop for fraudsters, so companies with digital platforms must implement security measures for new users. But, digital platforms need to strike a healthy balance between fraud prevention and user experience (UX), especially at sign-up.

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Balance Fraud Prevention and UX at Sign-Up with These Tools 

Companies don’t have to sacrifice a fast and efficient UX at sign-up for fraud prevention measures. They can incorporate fraud prevention tools that deter fraudsters while allowing good users fast and easy access to their digital platforms. These fraud prevention tools include:

  • Progressive Sign-Ups
  • Quality Identity Verification Data
  • Identity Verification Service
  • Two-Factor Authentication (2FA)

Progressive Sign-Ups

Digital platforms can use progressive sign-ups to weed out risky users without adding a lot of friction for good users. Progressive sign-up flows are layered with strong identity verification data. This data, along with fraud prevention tools, determines the level of risk each user brings to the platform. Riskier users go through a series of checks before they can create an account, and low-risk users can create new accounts with less information initially. 

Quality Identity Verification Data

Companies should use quality identity verification data throughout the onboarding process. Digital platforms need to know more about the identity of each user to assess the risk at sign-up. But they should find out more about each user without forcing them through a high-friction, time-consuming onboarding process. Quality identity data allows platforms to find out more about new users without adding a lot of friction.

Identity Verification Service

Platforms can use an identity verification service to speed up the account creation process. With the service, digital platforms can verify the identity of a user with very little information. For example, a digital platform could verify an identity using:

  • Name and email
  • Name and phone number
  • Home address and IP address. 

Two-Factor Authentication (2FA)

Many consumers don’t like 2FA, and it does add a little friction when it comes to user sign-ups and logins. However, 2FA is extremely effective at blocking bot attacks. Research by Google found that an SMS code sent to a recovery phone number can help block 66 percent of targeted attacks, 99 percent of bulk phishing attacks, and 100 percent of automated bots. 2FA can be used to verify identity and helps protect user accounts from hacking.

Use Fraud Prevention Tools Together

The above fraud prevention tools are not meant to be standalone solutions but rather are best used in conjunction with each other. Preventing bad actors from getting onto your platform doesn’t mean you need a long and arduous sign-up process. Companies with digital platforms can choose to implement tools that not only prevent fraud but also improve UX at sign-up.

Download our report: “Infinite Want: Consumers Demand Speed and Security in the Digital Experience.”

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