Ensure online payment security with payment authentication systems

Reflecting on Data Breaches: What You Can Do to Avoid Your Own

From Saks Fifth Avenue to Facebook to—most recently—Marriott Hotels, there have been no shortage of data breaches this past year. In fact, the number of records compromised in the first half of 2018 alone exceed the total for all of 2017.

Keeping this in mind, how can companies prepare for the challenges that inevitably follow a major data breach? And, more specifically, how can companies enhance their fraud-prevention efforts even as they cater to the rise in CNP (card-not-present) consumer purchases?

Very simply, merchants need a rapid-response plan. In other words, they need to stop misuse of stolen data before it impacts revenues and damages customer relationships.

Welcome AI into Your Fraud Management Technologies

This can be easier than it sounds. Thanks to modern machine learning techniques, payment authentication systems can identify fraud in real time, before a transaction clears. Through machine learning, businesses can connect customer data between cards and devices; identify, analyze, and manage sensitive data; and react quickly to shifting fraud patterns.

For example, CA Technologies, a Broadcom Company, offers machine-learning-based authentication built on a global consortium network of real-time, e-commerce transaction data. Using this data, the company can score the risk of every transaction on the fly, catching suspicious behavior in the act.

With an estimated $25 to $40 billion dollars in losses annually due to CNP fraud, this can be a huge boost for merchants. Incorporating real-time analytics into your security and payment authentication strategy can help you avoid data breaches now, and losses due to fraud later.

Balance Security and Convenience

Even better, the process does not have to be painful for customers or merchants. Protecting transitions without unnecessary challenges for customers is ideal when it comes to capturing consumers dollars.

Businesses also need security that does not get in the way of their operations, but rather seamlessly integrates into their existing customer experiences. Identifying a balance between security and user convenience can support these goals while also helping to strengthen revenue along the way. After all, with a reported 33% of transactions identified as fraudulent positives, it’s critical companies have the right technology in place to avoid missing potential safe sales – not just blocking fraudulent ones.

To help prepare for the risks and compromises that data breaches may bring to your business, consider the following tips.

Understand Your Merchant Risk for Data Breaches

With total e-commerce sales in 2018 expected to have risen nearly 12% from 2017, it’s more important than ever to understand the realities of a data breach… and what you can do to avoid them. To assess your business and reduce fraud risk, questions to answer include:

  • Does your authentication system stop fraud before it happens, or after the fact?
  • How does your existing cardholder authentication flow and user experience work?
  • Are your current solutions compliant with IDC/PSD2?
  • Are you meeting the emerging requirements for EMV 3-D Secure?

Expanding on this last point, 3-D Secure is an industry standard protocol that helps companies create balance between security and convenience. Through this protocol, merchants gain the opportunity to increase transactions and conversions alike, reduce chargebacks and minimize fraud loss.

Conclusion

Having a proactive fraud protection plan is essential, with artificial intelligence helping to lead this journey. To truly protect your business, it’s critical to have real-time solutions in place.

As an added benefit, the right technology can help grow transaction volumes, increase conversion rates and create frictionless customer experiences while minimizing fraud loss and managing fraud thresholds along the way.

If your existing solutions are not meeting these expectations, it’s time for a change. With 2019 just around the corner—surely bringing with it a new round of data breaches—consider making fraud protection your #1 goal in the year ahead.

Written by Nicole Leinbach Reyhle, Founder of Retail Minded and Author of “Retail 101: The Guide to Managing and Marketing Your Retail Business. The post is sponsored by CA Technologies, A Broadcom Company. All opinions are my own.

About the author

Nicole Leinbach Reyhle, is the Founder of Retail Minded and Author of “Retail 101: The Guide to Managing and Marketing Your Retail Business. The post is sponsored by CA Technologies, A Broadcom Company. All opinions are her own.