By 2029, the cost of e-commerce fraud is predicted to reach $107 billion. The impact on businesses is both monetary and reputational, and online retailers need a more fraud resilient plan.
Beyond chargebacks and stolen card information, fraudsters are deploying more sophisticated, large-scale tactics, like: promo abuse, fake returns, account takeovers and using synthetic identities (made-up identities using stolen details from different people). So how can a business fight back against a threat that’s constantly changing?
In our recent webinar, “Building a Fraud-Resilient E-Commerce Ecosystem: Integrating Tech, Policy and People,” TaskUs’ Sr. Director of Financial Crimes & Risk Operations, Surekha Nagpal, and Sift’s Trust & Safety Architect, Alex Hall, cover the emerging trends and share practical ways platforms can act fast to prevent and mitigate fraud loss.
Here are three takeaways from their conversation:
1. A holistic view is the strongest defense
Fraud is a complex story told through multiple data points and events. So to build robust protection, platforms can’t afford to focus on just one piece of the puzzle. Having a holistic view of all elements — data, people, process and technology — is important to tell the entire story of any fraud method.
Alex explains, “Tracking behavioral items and evaluating these elements properly illustrates what exactly is happening on the platform.”
By piecing together a user’s entire journey, from their login location and device type to browsing behavior and purchase history, platforms can spot anomalies before they cause damage downstream.
2. Systems and policies must evolve with the threat
E-commerce is a high speed and high stakes environment. Fraud tactics also change just as much. That means a system or policy from six months ago won’t be as effective today.
“We need to be consistently adapting,” according to Alex. “We need flexible systems that can adjust in real time and manage high volume. Tech should evolve with the fraudsters.”
The same principle applies to policies. They must adjust and respond to new threats, and be not too rigid for customers.
“Policies can’t frustrate good users or create loopholes that bad actors actually exploit,” Surekha explains.
3. AI is both the problem and solution
The rise of GenAI and deepfake technology gives fraudsters a powerful tool to automate the steps in creating more realistic and personalized attacks, generate synthetic identities and mimic real user behavior.
While AI is increasingly used to create fraud, Alex says, “Using it effectively can give an ROI of lower fraud or increase in sales.” One example is using AI for real-time fraud detection and not just at checkout.
And while technology helps surface the right signals, it takes people to validate and interpret them. “You need the right human expertise to solve the problem,” Surekha emphasizes. It’s a powerful partnership: AI for speed and scale, and analysts for context and judgment.
Ultimately, the goal of building a fraud-resilient ecosystem is to protect both a company’s bottom line and brand reputation. “It’s imperative for organizations to understand the impact of fraud today on marketing budgets, brand reputation and customer trust,” says Surekha.
“If users don’t feel that a platform is protecting their accounts, they’re going to lose trust in that platform,” Alex adds. “It’s a very difficult thing to measure. But it is something that definitely needs to be tracked.”
Get their full take on how to protect your platform from AI-driven fraud.
