How to Level Up Your Fraud Fighting with Digital Trust & Safety

How to Level Up Your Fraud Fighting with Digital Trust & Safety

May 2, 2019

[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.]

For most risk teams, the number one priority is preventing loss. Their organizational structures, tools, and processes are all designed with that goal in mind. That’s the core tenet of legacy fraud prevention: reducing risk rather than encouraging growth.

But here’s the problem: legacy fraud prevention systems kill growth. Rather than introducing friction to fraudsters, they introduce friction to customers. Moreover, rules-based systems and manual review teams focus on fraud mitigation instead of fraud prevention. Mitigation doesn’t scale—not when fraudsters are innovating faster than ever and customers are pushing for lightning-fast user experiences.

Leveling up requires a change in mindset, processes, and technology: from a legacy approach to a Digital Trust & Safety approach.

Digital Trust & Safety is a paradigm that aligns risk and revenue decisions, which are informed and powered by processes and technology. Innovators like Facebook, Airbnb, Twitter, PetSmart, and Patreon have woven Trust & Safety into their DNA. They’re hiring Trust & Safety teams that work cross-functionally to grow revenue while protecting against fraud. They’re also using automated processes like machine learning to deliver top-notch, customized user experiences.

Ready to level up your fraud-fighting with Digital Trust & Safety? Check out these tips.

1) Make sure you’re thinking about protection and growth

Many companies have siloed teams that are either responsible for growing the business or protecting it. The fraud-fighting infrastructure and revenue-driving engine are separate. But that shouldn’t be the case.

Under a Digital Trust & Safety mindset, businesses align risk and revenue decisions in one holistic ecosystem. They use dynamic friction to customize user experiences, stopping fraudsters while giving good customers a fast, delightful experience. This strategy allows businesses to grow without risk.

2) Make sure your teams are aligned

Don’t insulate your fraud team. Empower your fraud team to participate in product and growth decisions—and empower product and finance teams to participate in fraud decisions. Fraud prevention only works if it’s baked into a product from the beginning rather than tacked on afterwards. And fraud teams can’t operate effectively without cross-functional buy-in.

3) Make sure you’re planning holistically

Typically, fraud teams parse good users from bad by examining discrete actions and events at the point of transaction. However, a more effective approach is to examine overall user behavior to look for patterns that might indicate someone is a fraudster.

Under the Digital Trust & Safety mindset, fraud and risk teams treat the user journey like a holistic experience. Drawing on learnings from the entire user lifecycle, they can more effectively stop and prevent fraud.

4) Make sure you’re being proactive

It’s not enough to react to fraud after it occurs. Rules-based fraud prevention systems are clumsy, rigid, and slow. Digital Trust & Safety, by contrast, relies on strategies and technologies that are future-proofed rather than reactive. Companies that adopt Digital Trust & Safety use automated tools like machine learning to fight fraud at scale.

To survive and thrive, businesses have to adapt to the digital world. The best first step is to level up your fraud-fighting with Digital Trust & Safety.

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