The holiday season brings peak transaction volumes for online retailers. Such volumes spark increased fraudulent activity and bad behavior. The difficulty of distinguishing good customers from bad is also at its highest level this time of year.  With large dollar transactions from new customers, high-value goods shipping to gift recipients, and increased gift card purchases, it is easy to confuse legitimate transactions with fraudulent ones. And with no margin for inconveniencing customers who are all too willing to abandon their carts today, and a lifetime of tomorrows, merchants have to carefully craft their fraud prevention strategy. 

  • Balance Fraud Goals with Business Goals. Focusing solely on fraud metrics leaves your business vulnerable to other risks.In certain circumstances, such as the holiday period, you may want to set a slightly higher than normal tolerance for fraud. Why? You’ve invested a lot in marketing and promotions to attract new customers. You want high conversion rates. You want delighted customers. You want increased top-line revenue.  Delaying orders for manual review or making customers jump through extra authentication hoops, won’t help you meet those targets. Determine the right balance of goals for your business by viewing them in their entirety and communicate them to all parts of your organization. 
  • Give Yourself the Advantage of Using the Best Tools. It’s a good idea to regularly review your fraud-fighting tools and how you’re implementing them. Merchants often use static rules and techniques which served them well years ago, but which may not be the most effective or efficient today. Fraudsters are constantly inventing new ways to attack your business. Good customers are also changing their behavior (e.g., new payment methods, increased mobility).  That means your fraud prevention approach needs to evolve as well.
The Kount Difference
For 12 years, Kount has been helping enterprise and mid-sized retailers fight fraud and drive revenue. Not content to be relegated to just a technology solution, we partner with our clients in a consultative manner. We work with them to understand the type of malicious activity that may be detrimental to their bottom line, such as criminal fraud attacks, first-party or “friendly fraud”, and unprofitable behavior like promotion or returns abuse.

At Kount, in just the last year we’ve introduced Boost, a new supervised machine learning model which provides a transaction safety rating. This augments the unsupervised machine learning model we already had and our flexible rules and policy engine. We also introduced an integration with BehavioSec for behavioral biometrics which can help identify repeat customers, but also can detect non-human, or bot, activity.

During peak transaction volumes, retailers need to rapidly respond to emerging malicious attacks and bad behaviors. Kount is uniquely able to support such adaptive responses by empowering our clients to create rules and policies that address these developing circumstances. Supervised machine learning models, which are the only kind that most fraud tools offer, aren’t fast enough on their own to catch rapidly changing fraud. That’s why it’s imperative that businesses have the breadth of control Kount provides.  

With our comprehensive approach, we don’t rely solely on AI. Kount clients remain in control of their fraud strategy and have the tools to stop the fraud other solutions simply can’t detect. These tools include self-service analytics that help clients get at the root of suspicious behavior and use that learning to inform the rules and policies they’ll create within our solution. 

Kount’s use of AI is also a differentiator, as we employ unsupervised as well as supervised models. These models lead the market in predictive ability because they are infused with 12 years of deep domain expertise. 

To get the most out of AI, you have to know how to define the problems you are trying to solve. This is where Kount’s expertise differentiates our AI approach—in feature engineering. We know fraud, we know what to look for, we know how to frame the problem better than anyone in the market.

Success Beyond the Season
The holiday season is an excellent time to review your fraud strategy—not in isolation, but as part of a merchant’s broader business goals. As transaction volumes and malicious activity increase, so does scrutiny on the customer experience. Merchants must be aware of all these dimensions to operate successfully during the season and beyond.

To that end, look for a partner who can offer the expertise, guidance, and tools necessary to meet your goals. It is a rapidly changing and increasingly difficult risk landscape. At Kount, our greatest success is helping our clients navigate this landscape, so they can grow their business while protecting their customers and themselves.

To learn more about Kount and how to strengthen your fraud strategy this holiday season, request a live product demonstration here

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