OMNI-CHANNEL FRAUD MANAGEMENT. Strategies & survival tactics for retailers

Transcription

1 OMNI-CHANNEL FRAUD MANAGEMENT Strategies & survival tactics for retailers June 16, 2015

2 Presenters Jackie Barwell, Director of Product Management Erika Gallo, Director of Payment Risk Management 2

3 Agenda Introduction Challenge of omni-channel fraud management Research findings and ACI insight Conclusion and recommendations for retailers Q&A 3

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, , Forrester Research Inc., October ** European Cross-Channel Retail Sales Forecast, , Forrester Research Inc., April *** IDC Retail Insights report, Satisfying the Omni-channel Consumers Whenever and Wherever They Shop 4

5 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 5

6 Our Research Conducted by Forrester Consulting on behalf of ACI, March 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 6

7 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

8 Fraud Management Across Channels 90% of retailers have fraud management programs for each channel, but Only 46% have consolidated fraud management solutions across channels 8

9 Fraud Management Across Channels 9

10 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 10

11 Challenges: Managing Data Many of top challenges centre on the ability to manage, monitor and analyse customer payments and fraud data 11

12 Challenges: Handling Complexity New payment options and increased complexity are top of mind 12

13 Challenges: Demand for Faster Fulfilment 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** * Planet Retail report: UK Click & Collect: Retail Fad or Future of the High Street?, April 2014 ** Deloitte Technology, Media & Telecommunications UK Predictions

14 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 14

15 Challenges: Organizational Silos and Oversight The fraud managers in our survey clearly struggle with limitations caused by their own organizational structures 15

16 Challenges: Resourcing and IT Support Strong support for additional investment in people and tools 16

17 Conclusion Retailers have a clear understanding of the challenges and issues for omni-channel fraud management and of the resolutions, tools and support required 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 17

18 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 18

19 Publishing Next Week ACI paper available via and website w/c 22 June 19

20 QUESTIONS? June 16, 2015