When asked why he robbed banks, Willie Sutton — the famous criminal with four decades of bank robbery experience — is said to have offered what was likely history’s clearest answer: “Because that’s where the money is.”
Whether Sutton ever actually uttered that line is a matter of historical debate. But what isn’t debatable is the essential truth of his purported statement — and how relevant it is to the 2020 holiday shopping season, as Kount Chief Customer Experience Officer Rich Stuppy recently told PYMNTS.
“Where the money is, the fraudsters go,” Stuppy said. “The degree, severity and complexity of the attacks are still up for hypothesizing at this point, but we know for sure the attacks are coming.”
He said that with Amazon Prime Day essentially kicking off the holiday shopping season earlier this month, “retailers are going to go full-tilt boogie on promotions and mobile-centric offers, and the fraudsters are going to come in.”
That’s bad news, Stuppy said, but it is nearly inevitable, simply because of the great digital shift that’s on tap for the 2020 holidays. Consumers will be largely shopping digitally due to pandemic concerns, and as we’ve seen all year as commerce has been transitioning, fraudsters are more than happy to follow.
But the good news, he noted, is that fraudsters are smart, but not invincible. With the right data tools and artificial intelligence (AI) in place, retailers can build friction-free, seamless experiences for legitimate customers while stopping fraud attempts before they start.
Starting With A ‘Fraud Mindset’
As Stuppy said, successfully fighting off the coming fraud wave will require merchants to change their outlook about putting the proper controls into place.
At this point, he noted, the world is no longer changing — it’s already changed. As such, one of the unfortunate assumptions merchants must make at this point is that “everything is breached.” Every imaginable piece of private data that could be floating around on the dark web probably already is.
He said that means companies need to understand that they’re vulnerable to fraud from a wide variety of angles. Merchants must start instilling a “fraud mindset” at every level so that even as they enhance the consumer experience, they also continuously design in “layers and layers of defense mechanisms and controls.”
Stuppy said consumers “have set the bar so that protection has to be perfect. Nothing bad can happen, or they’re going to get really angry. If their account is taken over [or] if they lose value, it’s going to cause an allergic reaction to your brand. And not only does it have to be perfect, it’s got to be invisible, completely friction-free and just melt into the background of the experience.”
That’s an incredibly high series of bars to clear, but doing so establishes bottom-line trust, he noted — and companies don’t have a choice; they have to “figure out how to get there.”
The Clock Is Ticking Down
And in light of the coming holiday season, they have to get there on a timetable that’s quickly shrinking.
After all, the commerce landscape will reset during this season, removing some of the fraud protections retailers previously enjoyed in past years due to how holiday promotions were structured and scheduled.
Stuppy noted that in previous holiday shopping seasons, with only a handful of very large sale days, stores “did the promotion and quickly tore it down. And that means the fraudsters really didn’t have time to hone their attack against that particular circumstance.”
But in 2020, the holiday shopping season is starting online in mid-October, and the rhythm will be different. Promotions are going to last longer as merchants try to catch consumers on the extended curve. Fraudsters will now have more time to perfect their methodology, which is bad news for retailers and legitimate consumers.
Good Technology Can Beat The Bad Guys
While there will be no catchall solution to every potential attack, Stuppy said a broad swath of identity data analyzed by artificial intelligence (AI) could help merchants build strong identity controls.
That will give retailers the clearest view of whether a “customer” they’re dealing with is real or fake, allowing merchants to build bespoke controls that allow the good customers in while locking out the fakers.
With the great digital shift coming to the holiday shopping season, fraudsters will keep on coming – and will bring increasingly sophisticated tools to attempt to break down the controls designed to keep them out.
Stuppy expects fraudsters to take every opportunity to do their dirty work. For instance, he suspects they’ll try to go after the stored value on gift cards, taking over accounts to make illicit purchases using good old-fashioned stolen card figures.
The fraudsters have wanted in on eCommerce all year, and their efforts will likely only intensify over the last three months of 2020 as holiday commerce picks up.
“We can absolutely see that fraud attempts are up even further [than] successful frauds are, because the folks with better controls in place are relatively more protected,” Stuppy said. “The real damage is being done where people who don’t have controls in place have gone ahead and implemented something without them. They are just getting hammered.”