I attended the 2014 Merchant Risk Council’s E-Commerce Payments and Risk Conference along with over 1,100 risk and payments professionals. The conference provided a great opportunity to engage with other merchants, explore new vendor product offerings, and gain valuable insights into industry trends and emerging strategies in both payments and fraud. The conference had something for everyone, including a ski simulator at the Digital River booth, which made a statement about why “Speed Wins” in today’s e-commerce marketplace.
Right from the start of the conference, one theme was clear…. the world is changing. Globalization, new channels, the data explosion and increasingly sophisticated users with changing consumer preferences will continue to have significant impact on payment and risk management strategies for years to come.
Based on all of the sessions that I attended and what was showcased in the exhibit hall, here are three key takeaways from the conference:
1. The Customer Is King
Consumers expect quality products and services with a consistent shopping experience across all channels. Implementing the right payment and risk management solutions will go a long way when giving your customers a simple, secure and frictionless environment to spend their hard earned money. Providing your customers with a device-optimized shopping experience, streamlined checkout flow with relevant localized payment methods and highly relevant up-sells and cross-sells are no longer nice to haves – they are core business practices. Additionally, payment processing and fraud prevention has to work across all channels, because that’s the way consumers buy. Your payment and risk management strategies will impact many teams within your organization. Building relationships with internal stakeholders such as legal, customer service, IT, fulfillment, operations, etc. will go a long way in preventing business process or technology breakdowns that would likely result in unnecessary fraud loss, significant cost implications and lost customers. Your payment and risk management strategies should be focused on the customer experience and communicated to nearly all teams within your company.
2. Data Science
Data science is the extraction of knowledge from data. Data science is a buzzword, often used interchangeably with analytics, machine learning or big data, which is frequently abused for marketing purposes. However, it’s becoming abundantly clear to e-commerce industry leaders that data science can help businesses solve complex problems and gain a competitive edge. Does your business need to discern shopping patterns that have predictive value, identify and segment your most profitable customers, reduce the number of manual reviews or maximize fraud screening accuracy? If so, data science can help your business solve these challenges. In response to what data science can offer, data scientists are in high demand and start-ups that offer products and services aimed at e-commerce merchants, payment vendors and fraud solution providers are popping up everywhere. The real challenge will be to discern what problems this data can help you solve and if you should build a data science strategy that’s supported by an internal team or partner with a vendor to unlock the potential value in the data your company collects.
“People operate with beliefs and biases. To the extent you can eliminate both and replace them with data, you gain a clear advantage.” – Billy Beane, GM of the Oakland A’s
3. Fraud is Like Allergies
During the Digital Goods Roundtable session, which was focused on risk management strategies for digital goods, Nelson Ho from Microsoft shared a slide that had an interesting analogy.
It said, “Fraud is Like Allergies,” and featured the following bullet point list.
- Symptoms can get seasonally worse
- Certain triggers can increase symptoms
- There is no cure
- But, there are treatments to alleviate suffering
As a fraud product manager this resonated with me because combating e-commerce fraud is an unending challenge just like dealing with allergies. Fraudsters are becoming increasingly sophisticated and at the same time are getting more efficient in identifying and exploiting vulnerabilities. New product launches, geographic expansion, mobile device proliferation, new payment methods, logistics changes, merchandising events, seasonal transaction volume spikes, and check out flow changes can all give fraudsters opportunities to exploit your risk management tools and strategies.
Just like every attendee at the conference, I too was looking for the “Silver Bullet” product that can solve all e-commerce and payment fraud challenges. The reality is that until the “Silver Bullet” is found, a layered fraud prevention strategy is the best approach to fraud management.
Did you attend MRC 2014 in Las Vegas? What were the main takeaways for you? Please share your thoughts in the comments field below.