How to Let the Good Customers In and Keep the Bad Guys Out
Not being able to quickly and confidently identify good customers can mean lost revenue, increased costs, and frustrated customers. Aite Group predicts U.S. card issuers will have falsely declined $331 billion in transactions in 2018. Nearly one in every three transactions that were declined because of suspected fraud are actually legitimate. False positives are a bigger revenue drain for merchants than chargebacks: merchants only lose about 0.52% to chargebacks but five times more to false positives
Not being able to authenticate good customers upfront also increases costs, as banks and credit unions now need multiple steps. For example, although banks and credit unions cannot legally deny an online credit card application, they can flag them for further review. However, each review costs the institution about $10. Multiply that cost by thousands of applications, and profits can take a significant hit.
In addition, customer tolerance for friction is lessening - they expect a pleasant, fast, and personalized experience. When customers contact your bank or credit union, they expect that you know who they are. 40% of consumers have abandoned bank applications, with almost three-quarters of them saying they did so because the enrollment process took too long or required them to enter too much information.
Read this article to learn how organizations are balancing fraud and friction using the power of device-based identification data.