Last month, Forrester issued a report commissioned by Visa entitled “Understanding the Evolving Payments Landscape.” The purpose of the report was to evaluate how financial institutions and eCommerce merchants are protecting themselves from fraud in a rapidly changing world, both in terms of consumer attitudes toward online transacting and fraudsters’ use of ever-more sophisticated tactics.
From the BioCatch perspective, our mantra has been to use behavioral biometrics to deliver secure and seamless online experiences. And the report validates our mission by demonstrating the ROI behavioral biometrics can bring to fraud prevention.
Offering Stellar User Journeys While Reducing Fraud Costs
The Forrester survey found that companies with exceptional experiences grew 5xs faster than companies with poor experiences and that investment in new fraud management tools, like behavioral biometrics, enables the more mature organizations to readily create stellar user journeys.
Specifically, Forrester recognized a link between higher customer satisfaction and reduced fraud coupled with a major additional benefit: mainly a reduction in costs related to internal fraud management. BioCatch has also demonstrated these findings with our ROI calculators. The point is that the cost of fraud must be calculated based not only on actual losses, but also on the cost of managing the fraud to achieve an accurate understanding of a company’s fraud prevention ROI.
As traditional malware detection and device fingerprinting solutions can generate up to 50% false positives, dealing with them also causes costs to rise astronomically. And in a world full of Authorized Push Payment (APP) fraud and sophisticated social engineering scams, like vishing, traditional solutions fail almost every time. Traditional solutions miss these scams because victims are conducting fraudulent transactions in a totally authorized and authenticated manner.
The BioCatch Behavioral Biometrics ROI calculators show that:
- A medium-sized bank can expect to save up to $50M in actual fraud and related losses using behavioral biometrics to prevent account takeovers.
- By decreasing decline rates in account opening by 33%, profits can be increased by 50%.
- The cost of managing false positives and failures to authenticate is much greater than actual fraud losses.
Customer satisfaction isn’t even included in these measures, and there is plenty to suggest that consumers will abandon merchants and even banks if their experiences are frustrating enough.
Addressing Mobile Banking Concerns
The Visa and Forrester report also highlighted concerns regarding fraud in mobile banking payments, mobile wallets and P2P payments. Concerns start from identity verification or identity proofing through to data theft and transaction monitoring. The findings further make the case for behavioral biometrics as the only modality that can thread across the entire digital lifecycle.
Mirroring trends that BioCatch sees in the wild, mobile and P2P fraud more often than not begins at account origination, where the use of stolen and synthetic identities proliferates. In fact, a Javelin report from earlier this year puts a number on this, showing that while certain types of fraud declined last year, scammers were able to find many new targets. New account fraud increased by 400M, mobile account takeovers almost doubled and three times as many victims were unreimbursed for their fraud losses.
BioCatch is right there, in the middle of the fight, helping to combat P2P and Zelle fraud. A recent case study highlights a digital online bank that was facing a debilitating cyberattack that traditional checks – KYC, device ID, email address validation and geolocation checks – could not stop. Another case study demonstrates the experience of a credit card issuer that experienced 12x ROI by adding behavioral biometrics to its identity proofing process.
Kudos to Forrester for recognizing behavioral biometrics not only as one of the most difficult-to-tamper-with methods of authentication, but also as an example of a flexible and versatile risk-based way of enhancing transaction processing – the only way to truly deal with the evolving payments landscape.
Contact us to access our ROI calculator and learn more about the actual fraud savings as well as operational savings you can achieve with BioCatch.