Not where it comes to contextual awareness and cultural understanding, argues this proponent of business process outsourcing.
Facing zero economic growth in Asia, businesses are examining unnecessary losses, including those due to fraud.
Fraud is of concern for most organizations. More than two-thirds of businesses in the Asia Pacific region have reported increased concern about fraud losses.
In Southeast Asia, LexisNexis Risk Solutions found that the cost of fraudulent transactions to companies, including the cost to replace the product and investigate the case, was on average 3.4 times more than the original transaction value lost. Yet, many business leaders may not realize that customer support teams can help nip fraud at the bud.
Fraudsters target ill-equipped support teams
Scammers are incredibly adept at finding loopholes in e-commerce policies and procedures. Put there by design to enhance the customer experience and meet the demands of legitimate buyers, these same policies and procedures help the bad guys steal and resell enormous amounts of product. The net effect severely damages companies and is bad news for consumers because it drives up prices and slows the pace of innovation.
Connected devices are especially attractive targets for fraudsters. These devices tend to be trendy products and buyers worldwide are unusually motivated by the need to both acquire them and furthermore, to keep up with the regular release of new versions. This has two important implications.
First, motivated buyers are often willing to purchase such products via non-traditional channels, and second, these products usually occupy a price point that is high enough to make the risk of fraud worthwhile, yet low enough to keep sales volumes high.
High volumes of sales help mask the actions of the fraudster, and motivate the device maker to relax certain controls on purchases so as to smoothly keep up with demand. It is these relaxed controls that the fraudster works to exploit.
To be successful, a fraudster dishonestly interfaces with their target’s customer support agents, and each of these interactions offers small clues as to their larger modus operandi. Unfortunately, disparate small clues are not enough to reveal the entire scam, and the scammers know this. Someone needs to identify and assemble these scraps in a way that reveals the big picture. But while the agent’s job is to efficiently resolve one product issue after another, it is not typically to compile data in hopes of revealing a complex puzzle. The bad guys know this, and exploit this fact. So how can customer service agents help?
Outsourcing e-commerce fraud prevention
The key is experience. Intuition plays a vital role in fraud detection and prevention, and an experienced team takes time to congeal.
Clients of outsourced teams benefit from the time customer service agents have spent learning on other accounts, which results in a sharp drop of time to effectiveness, and a concomitant surge in fraud prevention savings. And it works. A team at Everise recently made a discovery that blocked the efforts of a single fraud ring, saving the client almost US$10m in the process.
While saving money is important, it is more effective to stave off and prevent fraudsters from reselling branded products on other platforms. That helps preserve brand reputation and elevates a customer’s experience.
That case, and many others just like it, demonstrate how focused teams of smart people, working hand-in-glove with customer support agents, can learn scammers’ patterns and use that knowledge to create systems to foil scams without impeding the purchases of legitimate buyers.
Some hope to solve the fraud problem using AI, and this does prove to be a useful technology. Looking for patterns, AI can quickly spot transactions that meet certain, adjustable, thresholds of suspicion and take some action accordingly. However, falsely flagging legitimate purchases as fraudulent can be as damaging to a brand as failing to stop actual scammers.
Unfortunately, AI does not have the degree of cultural understanding and contextual awareness that permits the same action to take on very different meanings in different circumstances. Of course, humans do have this ability, and we use it to differentiate between false and true positives. Thus, while AI is a useful tool for supplementing experienced fraud teams it cannot be counted on to take their place.
Effective fraud detection truly is as much art as it is science, requiring a combination of fuzzy, experience-won intuition and an extensive base of black-and-white knowledge. Both things are acquired over time. Because newly-assembled fraud teams struggle to quickly reach a state of effectiveness, many device makers victimized by fraudsters either pull the plug too soon after failing to see much return on their investment, or opt against trying in the first place.
Choosing the right BPO
If you choose to work with a Business Process Outsourcing (BPO) partner, exposure to fraud should be a consideration in the selection process. Find one that evidently works hard to keep its best agents. We call them champions of customer experience, because they understand the customer journey, know your product, and most importantly, will fight for your brand.
As importantly, your customer support teams should integrate well with high-performing, experienced fraud detection and prevention teams, and be able and willing to quickly achieve high levels of productivity. Team cohesion translates to extensive savings, lower prices and unhindered innovation.
As customer support agents bridge your brand to your customers, they are your first line of defence against unsavory agents looking to make a quick buck. A savvy customer service partner helps protect the brand by delivering exceptional experiences, preventing losses where they are commonly overlooked.
