Fraud, chargebacks and false positives can impact revenue, and even cause firms to lose customers.
The data is out there to aid in intelligent risk decisioning, but not all data is created equal, and analysis must happen within milliseconds.
To that end, digital fraud prevention company Kount announced in June that it launched the next generation of artificial intelligence (AI) in fraud prevention with a feature called Omniscore . The AI-driven solution helps digital businesses enhance their efforts to combat payments fraud and reduce chargebacks.
As has been reported, Kount’s AI and Omniscore use both supervised and unsupervised machine learning that leverages a universal data network spanning 12 years and 6,500 customers across 180 countries and territories. Combined with additional calculations, Kount’s fraud prevention solution closely emulates the decision-making process of an experienced fraud analyst.
In an interview with PYMNTS, Rich Stuppy, chief customer experience officer at Kount, said that in general, fraud prevention exists as “one of the few places where you have a technology, people, and a process coming together to solve a problem — and that problem is not a static problem. It is constantly changing, constantly evolving.”
That’s because businesses themselves are changing, and the digital customer journeys that those businesses promote are changing as well. At the same time, he said, fraudsters are quick to change, too, with attacks being waged in new and creative ways.
In laying out an effective roadmap in fighting fraud, Stuppy said, companies must have a fully formed strategy in place focused on how the customer journey unfolds, how those customers transact and how fraudsters could potentially extract value from or corrupt that journey.
In payments, he said, the key focal points for companies lie in whether they are getting chargebacks or whether friendly fraud is in evidence, and whether such occurrences are within an acceptable range. Yet the considerations, he said, can be different across different types of businesses.
Thank you for reading this post, don't forget to subscribe to our AI NAVIGATOR!
Companies that traffic in physical goods and have a relatively high cost of goods sold will see lost goods (i.e. pilfered by fraudsters) and chargebacks hitting results, Stuppy said. As a result, they may not be focusing on what’s happening until chargebacks are so high that “you’ll be in trouble with the card schemes.”
He noted that other companies, where products and services are digital in nature, may seek to “accept as much business as you can while steering clear of penalties and excessive chargeback programs” put in place by card schemes.[…]