[Editor's note: May is Level Up Your Fraud Fighting with Digital Trust & Safety Month at Card Not Present, sponsored by Sift. E- and m-commerce fraud have evolved significantly in the last half decade and many fraud professionals feel that, to keep up, their philosophy must evolve as well. Check back here throughout the month for updated content detailing how some merchants are changing the way they think about risk and growth and how that is changing the way fraud departments operate.]
When customers shop online, they expect the best: a fast, safe, delightful buying journey. For businesses to succeed in the digital era, they must prioritize user experience. But companies are not equipped to deliver.
The roadblock starts with fraud and risk teams, which focus on fraud mitigation rather than fraud prevention. Fraud mitigation tactics like identity verification and rules-based systems introduce unnecessary friction to honest users, disrupting the all-important user experience. Companies’ ongoing failure to build proactive systems that fight fraud as it happens—and even before it happens—has created a Digital Trust & Safety deficit.
Businesses have invested a great deal of time and money into the legacy approach to fraud-fighting. Their entire fraud infrastructure is built around cleaning up the mess after it happens: content moderators, manual review teams, customer service reps, chargeback investigators, and so on.
These risk teams exercise little to no influence over revenue decisions. In the current ecosystem, the product team builds a product, the marketing team markets it, and the fraud team puts out fires once the product is shipped. That’s a problem because the same variables that drive your level of risk also impact your bottom line. For example, a high order volume increases your revenue while simultaneously increasing your likelihood of experiencing fraud. Without cross-functional collaboration between risk and revenue teams, you lose the ability to act proactively.
By failing to build infrastructure to resolve this tension, businesses have created a Digital Trust & Safety deficit. Unlike the legacy approach, which focuses on risk mitigation, Digital Trust & Safety aligns risk and revenue decisions. Rather than building a product and fighting fraud after it ships, Digital Trust & Safety bakes fraud prevention and customer satisfaction into the entire process. Teams across product, marketing, and fraud collaborate so they aren’t scrambling to deal with fraud after the product is released.
In that way, Digital Trust & Safety spans your whole ecosystem: organizational structure, processes, and technology. By neglecting the cross-functional interface between these functions, businesses have forced themselves into a tight spot. As their business grows, they’re constantly trying to catch up, forever adding fraud-prevention systems after the fact. That approach is not scalable.
Fortunately, you can start addressing the Digital Trust & Safety deficit today. Begin by knocking down the silos between risk and revenue. Fraud, finance, and product teams should all participate in the same processes. Under Digital Trust & Safety, teams have common goals and KPIs, allowing businesses to expand more quickly and take risks—acting proactively instead of reactively .
Technology is a key part of this proactive approach. Digital Trust & Safety adopters use machine learning and other automated tools to scale processes. These tools learn and adapt with your users. Your fraud solution scales with your business.
Digital disruptors worldwide are hiring Digital Trust & Safety professionals and building the approach into their processes and strategy: Airbnb, Facebook, Harry’s, Petsmart, Twitter, Uber, Patreon… Each of these innovators is using Digital Trust & Safety to unlock hypergrowth. It’s time for you to do the same.