Physical to Digital: The Changing Retail Landscape
March 3, 2021
Today’s retail landscape is almost unrecognisable to any in living memory. While high street stores up and down the country have been forced to close their doors, it’s never been so important for businesses to provide a first-class digital experience.
Along with advances in AI and alternative data, the pandemic has accelerated the adoption and use of digital technology which has had a massive impact on the way we live our daily lives; people are becoming more connected with the use of digital solutions.
But it’s also had an impact on how exposed our identities can be to fraudsters…
Below is a list of all the topics we will cover in this article. Go ahead and click on any of these links, and you’ll be taken to that specific section.
Physical to Digital
As high streets were forced to close their stores last year, many businesses quickly realised the need to improve their digital offering or risk being left behind in an ever-competitive landscape. The businesses which have been able to survive (and thrive) are the ones who already had many of these procedures in place, and when they had to close their physical locations, the transition to online was relatively seamless.
When sales volumes surge, payment service providers and retail finance operators need to make sure their compliance operations are scaled to meet demand. As consumers moved online, banks and payment service providers saw a strain on the payment systems used to facilitate huge volumes of transactions and an increased risk of criminal activity.
Payment service providers also saw a boom in new business relationships and new customer accounts that needed to be screened, prior to the provision of payment services. Businesses looking to capitalise on the increased likelihood of transactions needed to:
- Find ways to cope with demand in payments, whilst maintaining the service levels customers expect.
- Ensure necessary checks are carried out effectively behind the scenes in order to remain compliant.
Today’s retail landscape has exposed those businesses not setup for the digital-first world and consumer. Traditionally, when performing some form of identity verification or onboarding, businesses would use methods such as proof of address or sending a copy of a passport and manual checks. These outdated processes can be time-consuming, frustrating and create a poor user experience for customers who may be likely to move to a competitor. Relying on traditional data to verify identity doesn’t just alienate the modern digital customer, it can also lead to huge demographics being unable to access the services they want.
Digitally-nimble businesses have been opening doors and services to those thin-filed customers who would typically fail frictionless onboarding. Where these customers usually have some form of identification, they often lack the documentation and credit records required by traditional institutions to assess creditworthiness and perform consumer due diligence.
Online retailers must also watch out for scams and fraudsters eating into their profits. According to the PYMNTS’ Securing B2B Payments Report, criminals last year successfully made off with $4.2 trillion from the worldwide economy, and around half (54%) of fraudulent incidents in the UK in 2019 were cyber-related.
Businesses need to make sure their systems can not only handle increased demand, but also efficiently manage any fraudulent activity.
A Rise in Digital Fraud
When online activity increases, so too does the risk of online fraud and fraudsters are continually developing more sophisticated ways to attack businesses and customers.
In this shifting landscape, organisations need to keep on top of their anti-fraud measures ensuring they’re up to the job of protecting their customers and deal with breaches accordingly.
Millions of people are affected by fraud every year and it is estimated that in 2019, criminals made $4.2 trillion from fraudulent activity worldwide and around half (54%) of fraudulent incidents were cyber-related.
Bank executives and experts list cybercrime as the leading risk for banks and according to Barclays Bank, there was a 66% increase in reported scams in the first six months of 2020 compared with the last six months of 2019. Fraud volumes also rose 61% between May and July 2020.
There are a number of reasons fraud has risen, the global pandemic for one but mainly:
- A greater number of mobile transactions.
- More sophisticated synthetic IDs.
- More goods and services are sold online.
- More cross-border transactions.
- More automated botnets.
These scenarios are more susceptible to online fraud and in the current economic climate, it’s never been more important to make sure your anti-fraud measures are up to scratch. More than 2 in 5 consumers worldwide have experienced a fraudulent event online, and according to PwC’s bi-annual Global Economic Crime and Fraud Survey, 47% of companies have experienced fraud in the last two years.
How We Can Help
Fraud is on the rise and fraudsters are getting smarter, but with the right partner and tools, you can minimise the risk of fraud to your business and customers. Identity has changed and so too should the way we tackle identity fraud.
At Acuant, we’re proud to have provided anti-fraud solutions for a number of global, high-profile clients in over 91% of the world. We’ve worked with innovative businesses that are challenging the norm and finding new ways to protect and provide value for their customers.
Meet increased demand and prevent the risk of fraud to your customers with our suite of global identity verification solutions, which can all be integrated via our single, universal API, Sodium.
Utilise a single element or multiple processes – it’s entirely up to you. Learn more about how we can help to automate and simplify your verification processes to help you gain a better understanding of your customers.
Book a demo today and see for yourself how powerful our suite of solutions are.