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Education
Squaring the
fraud circle
By Simon Fairbairn
Ingenico Group
he payments ecosystem is locked in a relentless battle
against criminals who want to harm businesses and
consumers for their own gain. To defend against fraud,
T the entire ecosystem – from retailers, acquirers and card
schemes to technology providers and payment providers – must be
invested in the process and work collaboratively.
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When done well, the combined effort certainly
proves its worth, with £2 out of every £3 of
attempted fraud detected and prevented last
year, according to a UK Finance report titled
Fraud the Facts 2019.
Finding a wider balance
When we talk about the war on fraud, our lens
tends to be one dimensional, as we focus on
the tactics used to perpetuate fraud, the means
to combat it and the increasingly sophisticated
technologies we employ to support our
defense.
Rarely do we stop and consider the wider
balance we must strike in order to deliver
on our business ambitions while combating
fraud.
If we are really serious about preventing fraud,
the only true way to achieve this would be to
stop doing business. Of course, that will never
happen. Practically speaking, this is a non-
starter and something we casually dismiss as
being plain nonsense. But if we stop and think
about what our fraud prevention practices
mean, versus the desired state of retail heaven,
then it is clearly a friction that we wouldn't
design if we could avoid it.
What we can do
So, how then do we square the circle when it
comes to fraud?
The trick is to strike a balance between
delivering a great customer experience
while maximizing revenue and, of course,
countering fraud. This sounds simple, but in
reality, it is where the true battleground lies
for the retailer.
For example, if you deliver an amazing
customer experience where the customer is
always right and nothing is too much trouble,
then costs will go up, profits go down, and
the opportunity to abuse the system and take
advantage grows in potential.
For many retailers, this is simply the daily
reality they face, trying to juggle the many,
often difficult, choices to deliver the best they
can. But truly great organizations are the ones
that use each of the variables as a point of
differentiation, thinking about how they can
take a point of friction and turn it into a value
add.
When it comes to fraud prevention, this offers
a wealth of opportunities to involve customers,