omni-channel fraud management - aci worldwide · support the customer experience – this is made...
TRANSCRIPT
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
4 4
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
