OMNI-CHANNEL FRAUD MANAGEMENT Strategies & survival tactics for retailers June 16, 2015
Presenters Jackie Barwell, Director of Product Management Erika Gallo, Director of Payment Risk Management 2 MEETS THE CHALLENGE OF CHANGE
Agenda Introduction Challenge of omni-channel fraud management Research findings and ACI insight Conclusion and recommendations for retailers Q&A 3 MEETS THE CHALLENGE OF CHANGE
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, 2012-2014, Forrester Research Inc., October 29 2013 ** European Cross-Channel Retail Sales Forecast, 2013-2018, Forrester Research Inc., April 28 2014 *** IDC Retail Insights report, ‘Satisfying the Omni-channel Consumers Whenever and Wherever They Shop’ 4 4
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 MEETS THE CHALLENGE OF CHANGE
Our Research • Conducted by Forrester Consulting on behalf of ACI, March 2015 • 170 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 MEETS THE CHALLENGE OF CHANGE
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 2015 7 MEETS THE CHALLENGE OF CHANGE
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 MEETS THE CHALLENGE OF CHANGE
Fraud Management Across Channels 9 MEETS THE CHALLENGE OF CHANGE
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 MEETS THE CHALLENGE OF CHANGE
Challenges: Managing Data • Many of top challenges centre on the ability to manage, monitor and analyse customer payments and fraud data 11 MEETS THE CHALLENGE OF CHANGE
Challenges: Handling Complexity • New payment options and increased complexity are top of mind 12 MEETS THE CHALLENGE OF CHANGE
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 2015 13 MEETS THE CHALLENGE OF CHANGE
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 MEETS THE CHALLENGE OF CHANGE
Challenges: Organizational Silos and Oversight • The fraud managers in our survey clearly struggle with limitations caused by their own organizational structures 15 MEETS THE CHALLENGE OF CHANGE
Challenges: Resourcing and IT Support • Strong support for additional investment in people and tools 16 MEETS THE CHALLENGE OF CHANGE
Conclusion Retailers have a clear There are shifts in organization and understanding of the strategy that need to be made, to enable an integrated approach challenges and issues for omni-channel fraud Effective risk management must fully management – and of the support the customer experience – this is made more difficult as payment resolutions, tools and options and consumer demands, support required increase 17 MEETS THE CHALLENGE OF CHANGE
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 MEETS THE CHALLENGE OF CHANGE
Publishing Next W eek… ACI paper available via email and website w/c 22 June 19 MEETS THE CHALLENGE OF CHANGE
QUESTIONS? Jackie.Barwell@aciworldwide.com Erika.Gallo@aciworldwide.com June 16, 2015
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