Payments Journal: Vice President and Managing Partner of Cognizant's Payments Practice Says Businesses Must Adopt Intelligent Technologies and Advanced Analytics to Mitigate Risk and Gain Customer Confidence

“An expanding number of innovative payment methods and ever-shifting fraud tactics are spelling trouble for merchants and credit card issuers when it comes to fraud vulnerability and data breaches,” writes Nachiketa Mitra. “In this challenging and complex landscape, it’s no wonder that, according to a recent study of customers, issuers and merchants, half of merchants and issuers are not highly confident in their current security measures. And, neither are their customers.” Excerpts:

“While consumers place a moderate level of trust in issuers to secure their transactions ― with more than 60% expressing confidence in their ability to do so ― less than 30% feel that way about merchants.

Earning customer trust is essential. How can merchants and issuers up their game and ensure the highest protection for transactions?  They must both act on multiple fronts:

Merchants should develop multiple lines of defense that protect both card-present and CNP transactions. In addition to EMV adoption, tokenization and encryption, merchants need to expand their comfort zones into technologies that enable more reliable multi-factor authentication, such as device authentication and biometrics. 3D Secure 2.0 is another technology to look forward to, as it is expected to enable more intelligent risk-based decision-making to control fraud.

Issuers should continue to improve their fraud monitoring and detection measures by centralizing fraud prevention efforts, and deploying real-time and behavioral analytics. By combining organizational data with data from external sources such as social media, and leveraging advanced analytics, organizations can produce deep insights into customer behavior that can help them detect anomalies early in purchasing behavior.

What will it take to win back customer trust? It’s a three-pronged approach:

Education: Customers must be continuously educated on various forms of fraud, precautions that can protect mobile devices from rogue apps, malware, etc., and steps to take if they suspect fraud.

Empowerment: Empowering customers with tools that give them greater control over their accounts and improve security can go a long way toward improving confidence and driving traffic across channels.

Engagement: Engaging customers through regular communication using relevant channels in post-incident management is critical to increasing customer confidence and ensuring customer loyalty.

Businesses that adopt a layered approach, incorporating intelligent technologies and advanced analytics, will not only mitigate risk but also gain the true prize of customer confidence.”

Click here to read more.