We’re launching a series of #fraudlifecycle blog posts to help inform people on the trends, challenges and strategies associated with addressing fraud. Make sure to follow the #fraudlifecycle conversation on Twitter!
During a recent webinar on balancing customer experience and fraud prevention, we had the opportunity to hear from an expert panel including Michelle Brisby, the senior fraud manager of Sephora Direct. Here’s a Q&A with Michelle:
Fraud Lifecycle: Have recent compromises of personally identifiable information (i.e. name, full address, phone number, social security number, etc.) caused any shifts in your fraud prevention tactics and are you seeing any reluctance on the part of customers to provide this type of information?
Michelle Brisby: In the wrong hands, what is considered good personally identifiable information for our business can be the theft of an identity. This reality requires a shift in fraud prevention tactics. There are things that we do today that are different from what we did in the past. For example, there are new, less obvious, data that can be used behind the scenes to validate a client.
As for our customers, I don’t believe it has stopped them from shopping; it just has made them more aware. Customers are watching their credit cards and bank statements more closely and then disputing suspect transactions much faster. They understand that PII is essential to online commerce because it actually links back to the source: the bank. Banks have email addresses, phone numbers, and billing and shipping addresses on file. So not only are we validating the information as the merchant, but we’re also getting additional validation from the banks and other third party sources.
FLC: Sephora is known for a very elegant and integrated omni-channel experience for its customers. What makes Sephora a leader in this space and what are the challenges of managing the different channels?
MB: Thank you.As a fraud manager, you used to have two sources: your call center and the web. Now you have mobile thrown in to the equation. At a certain point, you’ve got everything – the stores, online, the call center, apps – all flowing through one source: your dedicated website. You need to find a way to separate these channels since different devices require a different set of slot screening and rules, as well as software. There is now a need to separate the channels so that from a fraud manager or fraud analyst perspective you can identify your traffic and determine next steps.
FLC: What are some of the challenges in establishing a mobile presence?
MB: For me the biggest challenge is timing. All of the new software and the preventative measures require involvement from IT in terms of development time. You just can’t add new software without knowing the impact to your website and the requirements for implementation. All of these require the fraud manager to work on coordinating dates, times, testing, and mapping. Then there is also the knowledge piece of it. There is so much information out there in the space that you need to make sure that its right for your brand and your business.
FLC: What is the right amount of authentication in fraud prevention?
MB: The right amount of fraud prevention depends on your business: are you shipping goods? A digital merchant? A subscription-type merchant?
Being that I am a shipped goods merchant, I actually have a little more time than a digital merchant, meaning I can hold that order and do the right type of verification to validate the customer before the package is shipped. If an error is made, I can recall that package—whereas in the digital and subscription space it works a little different.
You also need to know your data, because tuning your fraud tool directly correlates with knowing how you should tune in and what orders need to come into queue to reduce that false positive rate. I would generally look to use the reporting that’s offered through fraud tools and have someone dig through those reports on a daily basis to determine if my rules firing correctly. Am I seeing the right number of orders? Are my false positives too high? Those are the questions that you have to ask yourself when you’re looking to implement a good client-customer experience.
FLC: Thanks very much for your time Michelle.
MB: Thank you, it’s been a pleasure.
Listen to the complete webinar here and stay tuned for more #fraudlifecycle posts.