Are businesses adapting the customer journey and implementing security measures as quickly as customers are expecting more from their digital experience?

Since the start of the pandemic, many businesses worldwide have started to see their operations stabilize. While many have shifted gears from survival mode to thinking about a long-term, sustainable approach, profitable growth still presents a challenge.

Establishing a high level of trust with customers and achieving customer loyalty are critical to business growth. Whether it is an online or in-store purchase, consumers expect a secure, convenient experience.

In the Asia Pacific region (APAC), studies have asserted that a quarter of consumers will not wait for more than 30 seconds before giving up on an online banking transaction.

Are businesses adapting the customer journey and implementing security measures as quickly as customers are expecting more from their digital experience?

Greater security, greater convenience

Due to the pandemic, it is said that 400 million people in South-east Asia went online for the first time in 2020. With this rise in online activity, consumers continued to prioritize security over convenience.

According to Experian’s recent studies Global Insights Research Report, more than half of APAC consumers surveyed indicated that security  was the most important aspect during any online experience. Convenience was ranked less important.

The challenge for many businesses lies in maintaining a balance between security and convenience to ensure a low-friction customer experience, which can be done by conducting passive fraud checks and contextual ‘step ups’ in security.

At the same time, since the beginning of the pandemic, consumer concern about the security of online activities and transactions has increased significantly, particularly for those in India, Singapore and Japan. In fact, APAC consumers in the markets surveyed had the highest expectations about the security of their data and online transactions compared to their global counterparts.

When these expectations are met, consumers are more likely to build stronger relationships with brands. Notably, nearly half of consumers polled expressed their willingness to share personal data with businesses that they trust or have a long-term relationship with. This presents an opportunity for businesses to earn themselves a loyal customer if they recognize and deliver on what their customers are prioritizing: security.

Combating fraud amid seamless CX
Since the beginning of the pandemic there had been an increase in fraud attacks. Fraudsters are becoming increasingly sophisticated too. Take phishing, for example, which has evolved beyond simple emails. Now, the campaigns fall under the larger umbrella of ‘social engineering for information gain’, which involves tricking users into divulging information by taking advantage of people’s emotional reactions. ‘

Attacks today are highly personalized for the specific business or individual being targeted, with phishers using automation and targeting tools on a larger scale. Phishing also leads to account takeover fraud, which poses a significant challenge for businesses. This involves a fraudster gaining access to an account that does not belong to them and changing user information such as login credentials to make unauthorized transactions.

Synthetic identities have posed a significant fraud challenge for businesses, even during pre-pandemic times. In the case of banks, this is due to a lack of an industry standard of establishing an identity’s step-up authentication. The financial impact is also challenging for banks to comprehend, as losses tied to synthetic identity fraud are typically categorized as defaults or “bad debt.” 

Fraud protection as a mandate

During the pandemic, many businesses deprioritized their plans to review and revise their fraud prevention strategies. Over the past year, the focus had revolved around accelerating digitization, moving processes online, easing customer friction, and dealing with IT resource constraints.

While these shifts made sense due to rapidly changing conditions, they brew the perfect storm in creating a prime environment for fraudsters to strike. In fact, research shows that almost a third of the businesses in the APAC markets polled had cited that a key operational challenge for them was preventing new types of fraud attacks. Fraud is a worrying trend that is likely to continue during an economic downturn, with Forrester predicting fraud will be up in 2021.

While businesses indicate they are focusing on revenue generation rather than fraud detection, they must be cognizant that the magnitude of potential losses that fraud could bring is so great that fraud prevention has to be a priority in their long-term strategy. In the context of the current new business landscape, a lack of a fraud protection strategy is a serious corporate risk.

While the fraud lifecycle is an ongoing process, we predict that the specific impact of the pandemic will be felt for much longer into the future. The first step in preventing fraud is being able to authenticate customers. Businesses need to equip themselves with a multi-layered fraud prevention framework that ensures customers are recognized and protected throughout all stages of digital interaction.

Boosting fraud prevention

The ideal solution for businesses to prevent fraud is a dynamic approach that harnesses the advantages of advanced authentication, with layers of data and advanced analytics to help businesses recognize their customers, reduce fraud risks, and create positive relationships with their customers.

Risk-based authentication, for example, is what many banks aspire toward in creating a robust defence strategy. The customer experience is improved across all channels, with risk-based authentication using frictionless authentication methods such as biometrics, which is then facilitated by better fraud detection methods such as advanced machine learning.

The rise of fraud is typically driven by organized crime rings that have the sophistication and resources to support the whole fraud lifecycle. As these malignant forces cash in on the world’s plight, they will pose more challenges for businesses today.

If organizations are rise to the challenge and protect themselves against fraud whilst respecting their customers’ needs (for greater security and privacy), they will be able to remain competitive even as fraudsters also step up their game.