52% of financial institutions plan to invest in additional measures to secure existing accounts, and 46% plan to invest in better identity-verification measures.
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42% of digital businesses that consider themselves technologically advanced are finding fraud is restraining their ability to grow and adopt new digital innovation strategies.
33% of all businesses across retail, financial institutions, restaurants and insurance are investing in their omnichannel strategies this year.
These and many other insights are from Javelin Strategy and Research report published this month , Protecting Digital Innovation: Emerging Fraud and Attack Vectors . A copy of the report can be downloaded here (25 pp., PDF, opt-in). The methodology is based on a survey of 200 fraud and payment decision-makers for businesses headquartered in the United States. Respondents are evenly distributed from four industries including consumer banking, insurance, restaurants/food service, and retail merchants.
The survey’s results are noteworthy because they reflect how AI and machine learning-based fraud prevention techniques are helping retailers, financial services, insurance and restaurants to reduce false positives that in turn reduces friction for their customers. All industries are in an arms race with fraudsters, many of whom are using machine learning to thwart fraud prevention systems. There are a series of fraud prevention providers countering fraud and helping industries stay ahead. A leader in this field is Kount , with its Omniscore that provides digital businesses with what they need to fight fraud while providing the best possible customer experience.
The following are the key insights from the Javelin Strategy and Research report published this month:
Retailers, financial institutions, restaurants and insurance companies need to invest in fraud mitigation at the same rate as new product innovation, with retail and banking leading the way. Restaurants and insurance are lagging in their adoption of fraud mitigation techniques and as a result tend to experience more fraud. The insurance industry has a friendly fraud problem that is hard to catch. Over half of the financial institutions interviewed, 52%, plan to invest in additional technologies to secure existing accounts, and 46% plan to invest in better identity-verification measures. Based on the survey banks appear to be early adopters of AI and machine learning for fraud prevention. The study makes an excellent point that banking via virtual assistants is still nascent and constrained by the lack of information sharing within the ecosystem, which restricts authentication measures to PINs and passwords.
57% of all businesses are adding new products and services as their leading digital innovation strategy in 2020, followed by refining the user experience (55%) and expanding their digital strategy teams. Comparing priorities for digital innovation across the four industries reflects how each is approaching their omnichannel strategy. The banking industry places the highest priority on improving the security of existing user accounts at 52% of financial institutions surveyed. Improving security is the highest priority in banking today according to the survey results shown below. This further validates how advanced banking and financial institutions are in their use of AI and machine learning for fraud prevention.
Digital businesses plan to improve their omnichannel strategies by improving their website, mobile app, and online catalog customer experiences across all channels in addition to better integration between digital and physical services is how. 40% of respondents are actively investing in improving the integration between digital and physical services. That’s an essential step for ensuring a consistently excellent user experience across websites, product catalogs, buy online and pick up in-store, and consistent user experiences across all digital and physical channels. […]