COVID-19 has catalysed the digital revolution in a way no one expected. New technologies and digital services sprung to the forefront, and were welcomed with open arms by consumers seeking instant gratification at the click of a button. Many industries have been transformed by this phenomenon, including the payments industry.
Digital payments have become as common as sending and receiving emails. The World Bank estimates nearly two-thirds of adults now make or receive digital payments, as worldwide access to financial services broadens. But as more people transact online, fraud and scam cases are on the rise. In fact, nearly 25% of consumers who were surveyed across six markets in the Asia-Pacific (APAC) region have been victims of online fraud in the past year, according to Experian’s 2022 Global Identity & Fraud report.
While the demand for quick and seamless digital experiences is higher than ever, it has become equally important for businesses to protect themselves and their consumers from being defrauded.
The damage goes beyond financial loss
Fraud is a serious issue that affects both consumers and businesses. Globally, 7 in 10 businesses expressed increased concern about fraud risk over the past year. Meanwhile, about 1 in 20 APAC consumers surveyed by Experian said they faced substantial monetary damage due to fraud incidents.
The economic cost of such incidents goes far beyond financial losses; if left unchecked, it can also cause serious reputational damage to businesses. Consumers in APAC report security and privacy as their top priorities, and a single oversight can cause a business to lose decades’ worth of trust. This makes it crucial for businesses to ensure they are doing all they can to create safe and secure online experiences, to protect and retain their customers for the long haul.
Consumers are concerned about online security
Today’s digital consumers are not only more engaged online, but more alert than before when it comes to online security. Experian’s research found APAC consumers’ level of concern around online activities has increased further in the last 12 months, with identity theft and stolen credit card information being some of their biggest concerns.
In an ideal world, all consumers would be aware of common fraud practices, and currently almost 80% also expect businesses to take steps to protect them online. Two-thirds of APAC consumers are even willing to share their data with businesses if it ensures greater security or protects them from fraud.
There is an increasing consumer trust in businesses that leverage advanced technology like artificial intelligence to ensure smoother and safer transactions. With 81% of global consumers saying that positive online experiences make them think more highly of brands, technology plays an important role in creating a safe, enjoyable digital customer experience.
Time to act fast to protect consumers
Acting quickly and decisively is essential for businesses when it comes to consumer security. For starters, every business – no matter how big or small – should have a set of basic fraud prevention and cybersecurity measures in place.
The tricky part is that fraudsters relentlessly evolve their methods to keep pace with changing consumer behaviour and technological advancements. This means that a one-time implementation of some basic measures won’t be enough to sustain a business in the long run. Businesses can leverage orchestration solutions to connect recognition, fraud prevention, and their customer experience, and use a single platform to bring all their tools and data sources together. This allows them to adapt to changing risks and improve their customer journey, enabling them to stay ahead of the curve.
Even in today’s sophisticated tech landscape, PIN codes remain the most used method to confirm online identity globally. Simple steps such as replacing this with biometric verifications can also go a long way in safeguarding consumers online, while improving the digital experience at the same time.
Digital payments are well on their way to becoming the worldwide default as consumers are embracing online interactions more than ever – and this is proving to be a double-edged sword for both businesses and consumers.
Maintaining a safe and secure online experience is a shared responsibility between consumers and businesses. Consumers need to be aware of the risks they face online and practise good cyber hygiene. Meanwhile, businesses can invest in cutting-edge solutions to swiftly address emerging fraud threats and prevent identity fraud risks, protecting themselves as well as their customers.