GEARING UP: HOLIDAY SEASON PLANNING GUIDE€¦ · Poorly planned holiday season fraud strategies...
Transcript of GEARING UP: HOLIDAY SEASON PLANNING GUIDE€¦ · Poorly planned holiday season fraud strategies...
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GEARING UP:HOLIDAY SEASON PLANNING GUIDE
PREPARING FOR SUCCESS
2INTRODUCTION
With a stronger global economy, 2018 consumer expenditure is expected to grow at its
strongest rate since 20111. ACI understands that success for merchants and retailers has
never been more critical.
We crafted this eGuide to provide you with the latest insights and information you need
as you plan and prepare for the holiday season.
1INTRODUCTION
THIS eBOOK IS INTENDED TO PROVIDE:
Timelines and milestone dates you’ll find important for planning
Spotlight areas to drive success within your business
Key resources and information for peak season
75% of consumers globally are very interested in receiving a call or SMS messaging to their mobile device to help mitigate fraud2.
Only 43% of global consumers trust merchants to protect personal data2.
Globally 80% of consumers think their mobile wallet’s personal and financial information is secure2.
Consumers are upbeat: Over 25% are spending more on products and experiences this year2.
Worldwide, the #1 security concern is theft by computer hacking2.
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Internal supplemental audit and testing
• Review and test systems:
- Infrastructure
- Storage
- Applications
- Databases
External vendor/partner preparedness
• Communicate updated peak estimates to
vendors to assist in their management of
cumulative resource needs
• Communicate special requirements or
requests to vendors early
• Validate vendor preparedness
• Obtain support and escalation resources
and align with internal teams
Create a plan and communicate, communicate, communicate
• Plan based on estimates plus a healthy margin:
- Capacity
- Staff
- Interoperability
Create and enact communications plans
• Establish internal communications processes
across business units, including “what if”
scenarios and contingency actions, and
assign responsibilities and escalation points
• Create external communications plans,
pre-draft content where possible, and assign
responsibilities, resources and escalation
paths, and set expectations
AREAS TO CONSIDER WHEN DEVELOPING YOUR PREPAREDNESS PLAN
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OPERATIONAL READINESS
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ACI FRAUD EXPERT INSIGHTS
During the holiday season volumes spike,
both genuine and fraudulent consumer
behaviors change and pressure mounts.
Opportunities increase for fraudsters —
and maintaining the right balance between
customer experience, sales conversions and
risk mitigation becomes even more critical.
Poorly planned holiday season fraud
strategies risk disappointing your genuine
customers, pushing them into the arms
of competitors and inviting fraudsters to
target your business, resulting in higher
chargebacks.
Adjusting your fraud strategy ahead of
and during the holiday season is crucial.
Recognizing your existing customers even
if they are displaying unusual shopping
characteristics during this time is key for
both customer experience and also for your
conversion rates
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Erika DietrichLeader of Global Risk ServicesACI Worldwide
22% was the increase in fraud
attempts in the period from
Thanksgiving to December 31
in 2017 compared to 2016. So,
despite the sales uplift (overall
transactions increased by 19%),
one out of every 85 transactions
was a fraud attempt3.
Erika Dietrich leads ACI’s Global Risk Services
team and is a member of the Merchant Risk
Councils Americas Advisory Board (AAB). She
is a certified eCommerce fraud professional with
more than 15 years’ experience in data analytics
and fraud detection and prevention strategy
management
22%
FRAUD READINESS
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In this Q&A, Erika Dietrich, Leader of Risk Services, shares advice on how merchants can best
prepare their fraud management strategies for the holiday season.
TACTICAL RECOMMENDATIONS FOR THE HOLIDAY SEASON
DID YOU KNOW... In recent years at ACI,
we have seen 78% of
fraud attempts come
from customers with
no account history
with a merchant4.
78%
Q2 Beyond software, what else can merchants do?
ED: You must understand your weak points.
If you were compromised before, be sure
that gap has been addressed and tailor your
strategies to ensure it doesn’t happen again.
If something like delivery fraud was a problem
before, identify the postcodes which need
higher review rates and re-focus reviews and
resources from areas which pose less risk.
Also, be sure to consider anything that’s
changed since your last peak period. Are
there new product lines, sales channels,
payment methods and delivery options? Are
these initiatives protected with specific and
tailored fraud rules and strategies? Be sure
to account for everything of this nature when
planning.
Q3 How can merchants maintain security and deliver a great customer experience?
ED: It starts with first being mindful of the
customer experience. Fraud solutions must
be complementary to a great experience.
Identify your loyal customers and their
preferred channels. Customers today are
using many devices and methods to shop,
and it’s important to recognize and enable
this audience.
One way to do this is to use customer
profiling and time-on-file techniques to
maintain the customer experience for valued
customers and ensure good transactions
are still accepted. This provides a good
experience while still being strong enough to
recognize popular attack methods, such as
account takeover.
Q1 What initial steps should merchants take to prepare their systems?
ED: First, I would recommend deploying
automated risk strategies. Doing this can help
to reduce manual review rates and lower call
center expenses, which will help to control
the demand on internal resources, who can
then focus their energy in other directions.
Next, be sure to utilize early warning
indicators. Access to these tools, such as
acquirer-reported fraud, will help to quickly
reduce your exposure and mitigate losses.
These are great places to start.
FRAUD READINESS
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TACTICAL RECOMMENDATIONS FOR THE HOLIDAY SEASON
Q5 How important is it to gain internal alignment?
ED: Very! You must speak with your
colleagues to gain alignment and clarity.
Cross-functional communication (with IT,
finance, customer services and marketing)
can build a picture of previous efforts and
outcomes which will then inform this year’s
decisions.
It is essential that you gain a 360-degree
view of your organization’s season campaigns
and promotions. Make sure you are aware
of anything that may inadvertently provide
opportunities for fraudsters. Raise your
concerns about potential problems and offer
solutions that are informed by your fraud
monitoring processes, analytics and reporting.
Now that you know of the season plans,
adjust your rules accordingly to allow for
the potential changes in genuine customer
buying behavior. After all, a successful
campaign will drive more sales and possibly
form new channels and customers. Your
marketing department will be quite happy to
see their efforts rewarded by a fraud solution
that welcomes these new, good transactions.
Q4 Can you speak a bit on the need for proactivity and manual reviews?
ED: Absolutely. Merchants must be fully
aware of the hot spots and trends in fraud,
especially the trends found within your
system. For example, analyze and monitor the
cards, IP and email addresses that pose the
biggest threat. Once you identify them, factor
them into your rules and alert triggers.
The data at your disposal is invaluable, and
I would recommend using as much of it as
you possibly can. If possible, dedicate one
individual into looking holistically at data
and trends, including decisions, individual
performances, rules, volumes and KPIs.
Remember, every review you complete adds
to the fraud intelligence information you can
use to inform your decision making.
Also, be aware of the other parts of the
process that trigger declines — 3D Secure,
AVS/CV2 responses and bank declines. You
must be prepared to manage those, as they
can trigger multiple customer attempts,
putting further pressure on your already-
stressed website.
Finally, explore the use of silent rules
and reporting tools to screen lower-risk
transactions.
Merchants need to understand their peak days and the sales that drive those high-velocity times to ensure risk strategies are effective and efficient — with low genuine consumer friction and high fraud detection.
FRAUD READINESS
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TACTICAL RECOMMENDATIONS FOR THE HOLIDAY SEASON
Q7 We’re ready to go. Now what? Continue to monitor and update.
ED: Stay vigilant. Monitor your systems
and update as necessary. Your business
intelligence tools and real-time monitoring
give you the power to make up-to-the-
minute decisions and provide faster
responses. Use them to their fullest. Don’t
wait until after the peak is over to see how
and where you can improve. Employ rapid
access to fraud intelligence to inform rules
changes in real time.
Q6 Beyond marketing, finance and IT, what other teams should you be working with?
ED: Engaging with your web and mobile site
security management is a must. Give these
teams the tools, techniques and procedures
to detect, contain and mitigate botnets
(which we predict will account for the highest
number of events during the peak season).
These events overtake accounts, impact site
resources and result in losses.
We recommend regular communication with
these teams on a scheduled, often daily, basis
during the holiday period. And considering
the presence of both good and bad bots,
you must put business policies into place to
address this issue with clarity for both teams.
FRAUD READINESS
30%16%
eCommerce Fraud eCommerce Sales
eCOMMERCE FRAUD GROWS NEARLY TWICE AS FAST AS SALES5
Growth rates in 2017
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ACI SOLUTION SPOTLIGHT
Preventing the unrelenting threat of fraud in
today’s payments world means employing
protection that’s not just real time but
anytime.
ACI ReD Shield® delivers real-time, multi-
tiered protection that’s tailored to the needs
of eCommerce merchants, payment service
providers (PSPs) and independent sales
organizations (ISOs).
This intelligent fraud detection and prevention
solution is delivered as a managed service
through an expert team of payments risk
analysts and provides instant decisions
(accept/challenge/deny) on eCommerce and
mCommerce transactions.
4ReD Shield enables merchants to:
ACI SOLUTION SPOTLIGHT
Detect and prevent online fraud
Maximize sales revenues
Reduce chargebacks
Reduce manual reviews
Minimize false positives
Support business expansion into
new markets, sales channels and
payment types
Detect and manage domestic
and cross-border payments
fraud across all payment types
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With the positive profiling capabilities of
the ReD Shield Stream Analytics Engine,
hundreds of other merchants across the
ACI global consortium database enrich
your customer and fraud data to power:
• Increased understanding and visibility of
customer behaviors
ACI SOLUTION SPOTLIGHT
Machine Learning Models
Over the past year, ACI has updated and
enhanced a number of its segment-specific
models, including our travel, gaming and
retailer models. The models are designed
to achieve higher fraud detection rates with
lower false positive rates. The models use
history from all consumer transactions across
ACI’s consortium data set.
ACI DELIVERS • Greater than $100M in fraud detected
by ACI segment model
• Model detects approximately 50% of
all potential fraud transactions
• Model false positive ratio less than 7:1Only 3% of chargebacks have an email age of more than 31 days
30% of new customers have history elsewhere with ACI
17% of existing customers have more history at a global level across merchants
84% of fraud is on emails with less than eight days history
• More customized and tailored rules
based on comprehensive risk profiles
• Enhanced accept rates and reduced
chargeback rates
• Better control and decision making
With the ReD Shield Stream Analytics Engine, we found on average that6:
Stream Analytics Engine
ACI SOLUTION SPOTLIGHT
Source: ACI (based on customer data)
CLICK HERETO LEARN MORE
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October September November December January 2019 February March22 - Thanksgiving
23 - Black Friday
26 - Cyber Monday
11 - Green Monday
15 - Free Shipping Day
22 - Super Saturday
25 - Christmas
26 - Boxing Day
October September November December January 2019 February March22 - Thanksgiving
23 - Black Friday
26 - Cyber Monday
11 - Green Monday
15 - Free Shipping Day
22 - Super Saturday
25 - Christmas
26 - Boxing Day
KNOW YOUR DATES AND MILESTONES
October September November December January 2019 February March22 - Thanksgiving
23 - Black Friday
26 - Cyber Monday
11 - Green Monday
15 - Free Shipping Day
22 - Super Saturday
25 - Christmas
26 - Boxing Day
Click or hover over the buttons to read more
Peak traffic dates
vary by region
RESOURCES
5ADDITIONAL RESOURCES
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We hope you found this eGuide useful as you begin planning for the
upcoming holiday season. Should you want more information, or if you’d
like to schedule a complimentary fraud preparedness consultation, please
feel free to contact us.
Much like your shelves are stocked with great buys, our shelves are stocked with expert
insights and resources to help you succeed all year round.
• ACI ReD Shield Overview
• Global Fraud Management Survey
• Selecting the Best Fraud Detection Model for the Business
• Driving Up Conversion with Effective Fraud Management
LET ACI MAKE IT A HAPPY HOLIDAY
65% OF CONSUMERS INDICATED THEY WOULD STOP SHOPPING WITH A GIVEN MERCHANT AFTER EXPERIENCING FRAUD OR DATA BREACH
Source: 2017 ACI Fraud Survey
RESOURCES
ADDITIONAL RESOURCES
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ACI Worldwide®, the Universal Payments® (UP®)
company, powers electronic payments for more than
5,100 organizations around the world. More than 1,000
of the largest financial institutions and intermediaries,
as well as thousands of global merchants, rely on
ACI to execute $14 trillion each day in payments
and securities. In addition, myriad organizations
utilize our electronic bill presentment and payment
services. Through our comprehensive suite of software
solutions delivered on customers’ premises or through
ACI’s private cloud, we provide real-time, immediate
payments capabilities and enable the industry’s most
complete omni-channel payments experience.
Americas +1 402 390 7600 Asia Pacific +65 6334 4843 Europe, Middle East, Africa +44 (0) 1923 816393
© Copyright ACI Worldwide, Inc. 2018 ACI, ACI Worldwide, ACI Payment Systems, the ACI logo, ACI Universal Payments, UP, the UP logo, ReD, PAY.ON and all ACI product names are trademarks or registered trademarks of ACI Worldwide, Inc., or one of its subsidiaries, in the United States, other countries or both. Other parties’ trademarks referenced are the property of their respective owners.
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1 page 2 log.euromonitor.com/2018/01/explore-the-top-10-global-consumer-trends-for-2018.html2 page 2 www.pwc.com/gx/en/industries/consumer-markets/consumer-insights-survey.html3 page 4 www.aciworldwide.com/insights/expert-view/2018/september/positive-profiling4 page 5 www.aciworldwide.com/-/media/files/collateral/trends/peak-trading-the-perfect-storm-for-fraudsters-tl-us.pdf5 page 7 www.digitalcommerce360.com/2018/04/24/e-commerce-fraud-rose-nearly-twice-as-fast-as-e-commerce-sales/6 page 9 www.aciworldwide.com/insights/expert-view/2018/september/positive-profiling
REFERENCES