How to protect your business from fraud and maintain a positive customer experience during Black Friday and festive trading

Melissa UK Team | United Kingdom

Compared with the average day in November those in eCommerce achieve around 300 per cent more sales on Black Friday and Cyber Monday. These two days are rapidly becoming an important part of the festive trading period, despite the fact they are fairly new retail events in the UK in the final quarter of the year.

This year more people than ever will be searching online for good value gifts for Christmas because of the cost of living crisis. As a result, many businesses expect Black Friday and Cyber Monday to be the biggest sales days of the year.

Unfortunately, the growth in digital engagement has led to a corresponding surge in fraud. Recent findings from National Fraud Intelligence Bureau reveal that since the start of 2021 online businesses in the UK lost nearly £2.4 billion through fraud. This figure is set to grow as cyber criminals become savvier with the technology at their disposal and the cost of living crisis bites.

This poses the question for retailers – with the most profitable time of the year looming, what steps can they take to make sure that they don’t end up losing out as a victim of fraud, yet at the same time ensure a positive customer experience?

Deliver ongoing data hygiene processes

Before obtaining ID verification tools a good first step to help prevent fraud is to have processes in place that deliver ongoing data hygiene.

For example, when it comes to the data cleansing process, one of the most valuable tools is an address autocomplete or lookup service, which gathers accurate address data in real-time at the onboarding stage. These tools also provide address validation – supporting ID verification.

Since ID checks will pick up basic issues with data, such as an incorrectly formatted address, it’s a better value and best practice to ensure you have accurate user contact data in the first place.

Beyond identity verification, there are other benefits of a data hygiene-first approach. Having accurate data on users enables organisations to obtain valuable insight, such as a single customer view (SCV). This insight can be used to improve services and targeting, including personalisation with communications, which enhances the user experience.

Evolving technology means it’s even more straightforward to deliver data quality. Today, you can pay for a license to access a data cleaning platform that requires no code, integration or training – simply plug in and benefit, immediately.

Utilise electronic ID verification (eIDV)

For those retailers selling high value items or subscriptions it is particularly important that they look beyond simply having good data hygiene. They need access to identity verification tools to identify possible fraudsters. A good place to start is to use electronic identity verification (eIDV). With eIDV when someone goes through the purchase process it can run real-time cross-checks against the contact data provided – such as name, address, phone number, email address, and date of birth – in the background. This way the business can confirm that they are dealing with the actual identified individual and are meeting know your customer (KYC) and anti-money laundering (AML) objectives. Another key benefit is that because the cross-checks are undertaken instantaneously, there’s no negative impact on the customer experience.

For an automated eIDV service to operate effectively it’s vital that it has access to billions of global records in real-time, including up-to-date sanctions, watch lists, and politically exposed persons (PEP) data, as part of this dataset.

Because eIDV capabilities can be delivered through apps, SaaS, and web APIs, they can integrate seamlessly into existing platforms. If required, they can also be easily scaled up, delivering as little as 100 checks, through to many millions per year.

Use biometrics to securely speed up ID verification

In conjunction with eIDV, automated biometric technology with optical character recognition (OCR) plays a crucial role in verifying ID without the need for time-consuming security questions and passwords. By undertaking facial and document verification it can check the validity of ID documentation in real-time, along with successfully examining the image in the master ID documents with the selfie provided by the applicant or customer to see if they match. Once their ID has been confirmed, virtually instantaneously, users can securely access their products and services in real-time. However, the OCR technology used must be able to offer liveness checks and request a ‘challenge response’, such as blinking. This way it’s possible to establish that the person is real and not a potential fraudster.

End manual ID checks

In an age of automated ID verification, it’s time for costly and time-consuming manual ID checks to end. Also, manual verification is subject to human error because it’s not easy for staff to check documents for authenticity, and employees can’t be expected to know all ID document types which can cause review-related delays.

With the vital festive trading period fast approaching the accuracy, speed and cost benefits offered by the technology powering data quality and ID verification are far superior to any manual approach. The technology available provides a vital layer of protection to prevent costly fraudulent activity and in the process ensure businesses deliver a smooth customer experience. Importantly, data quality tools like address autocomplete and those in the ID space such as eIDV and OCR biometric technology can be quickly integrated within existing systems in time for the festive trading season.