60% marketers unsure of cost of fraud to their organisation
Few marketers understand the full benefit of fraud-prevention systems on their activities as about 60 per cent of marketers are unsure of the cost of fraud to their organisation. 40 per cent of marketers said their organisation had been targeted by cybercriminals or hackers.
The findings were highlighted by 41st Parameter, a part of Experian, which surveyed 250 marketers to understand the relationship between fraud prevention, omnichannel retailing and the holiday shopping season.
As the holiday shopping season peaked, 35 per cent of businesses said they planned to raise their digital spend for the 2014 holiday season. About 70 per cent of small businesses said they were unsure of fraud’s impact. Fifty per cent of mid-sized business marketers and 67 per cent of large-enterprise marketers were also unsure of the impact of fraud.
Experian Marketing Services reported that during 2014, 80 per cent of marketers planned on running cross-channel marketing campaigns. This integration of more channels into campaigns by marketers leads to new challenges for fraud-risk managers.
The report suggests that marketers should communicate their plans early to the fraud-risk team, especially if they are planning to target a new or unexpected audience. Making this part of the process will reduce the chances that risk management will stop or inhibit customers.
It should be ensured that marketers understand what the risk-management department is doing with respect to fraud detection. The report says that the chances are that the risk managers are waiting to tell marketers.
It is very important for that marketers do not assume that fraud will not affect their business and talk to their risk-management division to learn how much fraud truly costs their company. This will allow them a better understanding of what they need to do to make sure that their marketing efforts are not thwarted.
“Marketers spend a great deal of time and money bringing in new customers and increasing sales, especially this time of year, and in too many cases, those efforts are negated in the name of fraud prevention,” said David Britton, Vice President of Industry Solutions, 41st Parameter.
“Marketers can help an organisation’s bottom line by working with their fraud-risk department to prevent bad transactions from occurring while maintaining a seamless customer experience. Reducing fraud is important and protecting the customer experience is a necessity,” Mr Britton added.
The report highlights that few marketers understand the impact declined transactions have because of suspected fraud. An uncoordinated approach to new customer acquisition can result in lost revenue affecting the entire organisation.
Wrongfully declined transactions can be costly as the growth of cross-channel marketing increases and a push towards omnichannel retailing pressures marketers to find new customers, the report states. “Many businesses loosen their fraud detection measures during high peak time because they don’t have the tools to review potentially risky orders manually during the higher-volume holiday shopping period,” said Britton.
“Criminals look to capitalise on this and exploit these gaps in any way possible, taking an omnifraud approach to maximising their chances of success. Striking the right balance between sales enablement and fraud prevention is the key to maximising growth for any business at all times of the year,” Britton added.
