Overly-intrusive fraud prediction and detection may mar the booking experience, so a customer-first approach is always a good thing

Amid worries on global affairs, elevated fuel prices and inflation, and lingering health safety concerns, the travel sector is regaining vibrancy and showing positive signs of recovery.

The popular catchphrase “revenge travel” is now being used to describe peoples’ rush to compensate for the time lost during lockdowns and border closures.

However, this trend is giving rise to a whole new set of challenges that are testing the capacities of aviation, hospitality, and travel-linked industries, including keeping a fraud-free online booking experience. 

Common pitfalls when incentivizing travel
Major airlines, land and accommodation providers, and online travel agencies alike are fighting to win a piece of the growing online travel market pie by aiming to provide the most personalized and seamless customer experience possible.

For example, many airlines and travel providers are now accepting alternative payment methods like instant bank transfers, e-wallets and instalment payment schemes. Travel companies are also raising the stakes by offering customers improved loyalty programs, incentivizing brand loyalty and rewarding shoppers with points and vouchers in exchange for their purchases. While these methods boost brand experience and keep customers happy and engaged, they can also come at a price to the merchant.

These incentives open businesses up to new and more sophisticated types of fraud attacks. Payment fraud, account takeovers (ATO), and loyalty abuse, are the most common types of fraud attacks in the travel industry. Other challenges are:

    • Travel fraudsters are unique and often hard to catch as they take on various personas, and even legitimate customer behavior patterns within this particular industry can appear suspicious to an untrained system (last-minute bookings, changes in IP address, or phone numbers, etc.)
    • Fraudsters, now armed with the knowledge that they can do more damage by hacking into an individuals’ account than by committing simple transactional fraud, have pivoted to loyalty programs as their new method of attack. Users are far less likely to monitor loyalty points accrued than they would be with funds in their actual bank accounts.

As such, fraudsters can now revenge-fly under the radar in infiltrating and depleting accounts and performing other cybercrimes. 

Customer-First fraud prevention
When it comes to stopping fraud, travel businesses need to be especially mindful of adding obstacles into the booking process, as their customers often purchase multiple tickets at once or adjust their itineraries at the last minute and expect their experience to remain friction-free.

This demands a more proactive approach to curbing fraud, and at the same time, protecting genuine or legitimate transactions from being declined. 

In attempting to build fraud systems in-house, many travel providers may lack the global network and domain expertise needed to recognize fraudster behavior and personas preemptively. As such, here are some points to ponder for ensuring a customer-first approach:

    • Consider deploying a fully automated fraud prevention solution to detect bad actors in real-time and keep pace with their good customers’ expectations.
    • A legacy or rules-based approach to fraud detection no longer meets the dynamic market requirements; nor is nimble enough to keep pace with fraudsters continually shifting their methods of attack.
    • When outsourcing fraud detection to third party specialists, look for partners that can simultaneously prevent fraud and abuse on their platform, while ensuring a seamless customer experience.

By tightening fraud detection and intervention with customer experience always in mind, the travel industry can hope to ground fraudsters while travelers take flight securely and smoothly.