omni-channel fraud management - aci worldwide · support the customer experience – this is made...

Strategies & survival tactics for retailers

OMNI-CHANNEL FRAUD MANAGEMENT

June 16, 2015

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Presenters

Jackie Barwell, Director of Product Management

Erika Gallo, Director of Payment Risk Management

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Agenda

Introduction

Challenge of omni-channel fraud management

Q&A

Conclusion and recommendations for retailers

Research findings and ACI insight

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The Drive to Omni-Channel Payments

Cross-channel retail sales predicted to

reach $1.8 trillion in the US by 2017,

from $1.2 trillion in 2012*

Cross-channel retail sales in Europe to

reach €920 billion, or 44% of total

European retail sales, in 2018**

Customers who use multiple channels

spend 15% - 30% more than those who

use a single channel***

The increased flexibility and convenience

of omni-channel retailing is fast becoming

a consumer expectation

* US Cross-Channel Retail Forecast, 2012-2014, Forrester Research Inc., October 29 2013

** European Cross-Channel Retail Sales Forecast, 2013-2018, Forrester Research Inc., April 28 2014

*** IDC Retail Insights report, ‘Satisfying the Omni-channel Consumers Whenever and Wherever They Shop’

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The Challenge for Fraud Management

• Fraud – and fraud management – varies by sales channel

• Fraudsters are increasingly operating across channels

• Consumers are demanding seamless experience across channels

• Omni-channel retail requires tracking of consumers and fraudsters

– and data integration – across channels

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Our Research

• Conducted by Forrester Consulting on behalf of ACI, March 2015

• 170 US & European retail fraud management decision-makers

- 50 US

- 30 in each of France, Germany, Italy and the UK

• Identify and evaluate current pain points for omni-channel fraud

management

• Highlight tools and strategies to combat retail fraud effectively in an

omni-channel world

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Payment and Fulfilment Options

• Retailers are meeting demand for multiple purchasing channels

For all charts in this presentation

Base: 170 US and European retail fraud management decision-makers

Source: A commissioned study conducted by Forrester Consulting on behalf of ACI, March 2015

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Fraud Management Across Channels

• 90% of retailers have fraud management programs for each channel, but …

• Only 46% have consolidated fraud management solutions across channels

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Fraud Management Across Channels

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CNP Shortfalls

• CNP transactions growing at 15% pa to 2018; CP by 4% (Business Insider)

• Real-time rules and neural models used for the protection of CNP channels

by less than half of retailers

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Challenges: Managing Data

• Many of top challenges centre on the ability to manage, monitor and analyse

customer payments and fraud data

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Challenges: Handling Complexity

• New payment options and increased complexity are top of mind

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• 35% of UK online shoppers buy online and self-collect (13% in the US; 5% in

Germany). This will increase to 76% of online shoppers in the UK within 3 years*

• Deloitte predicts that the number of Click and Collect locations in Europe will

reach half a million in 2015, a 20% increase on the previous year**

Challenges: Demand for Faster Fulfilment

* Planet Retail report: ‘UK Click & Collect: Retail Fad or Future of the High Street?’, April 2014

** Deloitte Technology, Media & Telecommunications UK Predictions 2015

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Challenges: Inadequate Tools

• 65% do not have adequate tools to support effective fraud management

• More than half need advanced fraud management tools suited to omni-channel

• Real-time decisioning and easy-to-use interfaces are critical

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Challenges: Organizational Silos and Oversight

• The fraud managers in our survey clearly struggle with limitations caused by

their own organizational structures

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Challenges: Resourcing and IT Support

• Strong support for additional investment in people and tools

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Conclusion

There are shifts in organization and

strategy that need to be made, to

enable an integrated approach

Effective risk management must fully

support the customer experience – this

is made more difficult as payment

options and consumer demands,

increase

Retailers have a clear

understanding of the

challenges and issues for

omni-channel fraud

management – and of the

resolutions, tools and

support required

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ACI Recommendations

• Gain access to tools and services that will enable:

– fast, effective data integration across channels

– real-time and post-transaction fraud screening, across channels

– flexible rule strategies and queue definitions

– easy to configure user interfaces for agents and analysts

– the ability to turn fraud and payments data into actionable intelligence

• Eliminate line of business silos - establish a lead fraud management

individual/department to oversee all channels

• Clearly articulate the value of effective fraud prevention across the

business, to secure necessary funding

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Publishing Next Week…

ACI paper available

via email and website

w/c 22 June

QUESTIONS?

Jackie.Barwell@aciworldwide.com

Erika.Gallo@aciworldwide.com June 16, 2015