Fraud prevention and digital trust are quickly becoming essential components for all businesses undergoing a digital transformation journey. The ability to deliver the desired level of customer experience to capture and retain customers is also required.
To learn how Equifax’s acquisition of Kount can help businesses undergoing digital innovation balance fraud prevention and digital trust, PaymentsJournal sat down with Brad Wiskirchen, SVP and GM at Kount, and Tim Sloane, VP of Payments Innovation at Mercator Advisory Group.
Digital fraud slows down innovation
Businesses are eager to innovate. Even so, Javelin Research has found that 42% of businesses say digital fraud slows their expansion into new digital services and channels.
Historically, there has been fear and trepidation among merchants around how to strike the balance between innovation and fraud. If too much friction is introduced into the process, conversion rates could drop, leading to a drop in revenue. But, by leveraging data, it is possible to innovate without compromising security.
“Data really allows businesses to increase revenue opportunities via customized cross-sells [and] upsells, sending end consumers down the appropriate funnel depending on their experience with the retailers,” said Wiskirchen. “So although people were initially worried about injecting friction in their process, I think what they’re recognizing is that this is a unique opportunity to learn more about their consumers in real time and provide them with better services.”
For some merchants, online innovation became a means to survive over the past year. “When COVID came along all of [the] sudden, they had to build out and enable that online presence and then start thinking about purchase ahead for pickup, which… introduces new processes into their organization as well as new vectors for fraud,” explained Sloane.
Wiskirchen agreed, adding that, “there was a lot of trepidation, but that was easily overcome once [companies] recognized the differentiated data they are able to access as a result of these new fraud control efforts.”
Using data to establish digital identity trust
One way for companies to utilize data to bolster fraud prevention is to establish digital identity trust. A digital identity is a digital collection of identity attributes. These attributes can be broken down into four categories of customer data: payment data, location data, digital identifier data, and unique customer data.
“A digital identity may be really any information that a customer has volunteered to a company or an entity online. So customers build their digital identity at any point in their buying journey, including when they open an account, when they engage in a loyalty program, or when they make a purchase,” said Wiskirchen.
By ensuring digital identity trust, businesses participating in e-commerce can reduce losses from payments fraud and chargebacks and optimize the customer experience. In fact, it is imperative that they do so—quickly.
“With the speed required for a good consumer experience, identity trust needs to be conducted in real time. And by real time, I mean sub-200 milliseconds,” Wiskirchen added.
Artificial intelligence (AI) is key to establishing identity trust in real time. In Kount’s Identity Trust Global Network, the company’s AI has the ability to analyze attributes against billions of customer interactions in milliseconds. As more signals are collected and combined with AI driven analytics insights, the AI becomes more predictive.
Kount and Equifax are joining forces
To enable global businesses to harness the power of AI and establish strong digital identity trust, Equifax and Kount have joined forces. More specifically, Equifax recently closed its acquisition of Kount that was first announced in January.
This acquisition expands the Equifax global footprint in digital identity and fraud solutions, helping businesses better maximize fraud prevention and customer engagement. The move is especially timely given that customer interactions are shifting to digital channels in record numbers, with digital acceleration showing no signs of slowing down.
Equifax’s purchase of Kount combines data from both organizations to create a true picture of who a specific customer is, what their purchasing habits are, and where and how they engage in commerce.
This has implications beyond the world of e-commerce. “We’re also able now to support banks, fintechs, and insurance firms and really companies of all types because they’re all learning rapidly that the digital environment demands that consumers have are the same as they are in an e-commerce environment,” said Wiskirchen. “People want friction-free experiences. They want personalized offerings. They don’t want spam… or offerings that they don’t care about.”
How businesses can take immediate action to fight fraud
One of the immediate ways that businesses can take advantage of Equifax’s acquisition of Kount is to ensure that they have account takeover protection.
“Account takeovers post-COVID have seen a material uptick, and those occur when a fraudster or a bot uses stolen or hacked credentials to gain access to a legitimate customer account. Those accounts are oftentimes tied to credit card numbers, customer data, or even loyalty points,” explained Wiskirchen.
This can have a devastating impact on customer accounts and permanently erode consumer trust in the brands that failed to keep their data safe. “Account takeovers can really hurt [merchants] and hurt their customers, especially now that the bad guys have figured out that they can steal those reward points and other incentives and use them. Both the merchant and consumer lose,” said Sloane.
Together with Equifax, Kount is upping Kount Control with Adaptive Authentication. Kount Control’s Adaptive Authentication takes an intelligent, multi-layered approach to protect against account takeover attacks. It also delivers frictionless customer login experiences, allowing businesses to customize their passive authentication account login protection policies by choosing from several multi-factor authentication options.
The takeaway
Digital identity trust and fraud prevention are key for businesses expanding into the digital realm. Knowing this, Equifax and Kount have joined together to harness the power of data and AI to establish strong digital identity trust and boost customer engagement.
Ultimately, Equifax’s acquisition of Kount opens up new opportunities for businesses to engage with identity trust tools to prevent attacks such as account takeovers.
“I have never been more excited about the future of Kount than I am today because of this partnership,” concluded Wiskirchen.