NRF 2017 Recap: The Current State of Retail Fraud

Last week, Pindrop joined nearly 35,000 attendees at the NRF Annual Convention and EXPO in New York City. According to speakers from the event, retail brands will need to focus on their customers, their technology, and their leadership in 2017. Customer priorities are constantly adapting as available technology changes. These new innovations and technical capabilities will continue to transform the retail experience for customers, and brands will need to hone in on how to administer an experience that is not only timely, but also secure. According to Vishaal Melwani, CEO of menswear retailer Combatant Gentlemen, “there will be more emphasis placed on the omnichannel experience as companies continue to look for fresh ways to connect with consumers through the intersection of offline and online” in 2017.
While the retail experience is becoming increasingly omnichannel, retailers are still neglecting the phone channel, the weakest link in security, as a common point of access for customers. Despite the intent to administer positive customer experiences, contact centers agents often fall victim to the methods that enable fraud attacks. Today, Caller ID is freely spoofed and knowledge-based authentication questions (KBA’s) are easily bypassed. Criminals either socially engineer the answers, find them online, or purchase them on the black market. Fraud efforts are becoming increasingly aggressive in their attempts to fool contact center agents into processing fraudulent card-not-present (CNP) transactions.
According to Aite Group, an independent research firm, 72% of executives expect call center fraud loss to continue to grow, with $4 billion in counterfeit card fraud moving into the phone channel. These fraud attacks increase operational costs, decrease customer satisfaction, and jeopardize brand reputation as customer data is repeatedly lost to fraud. Retailers’ existing security systems are not robust or secure enough to handle the increasing volume of data filtering across web-enabled devices and processes. A digitally-influenced retail experience may enable brands to conduct business from a variety of access points, but it is also putting their enterprises under siege. By adopting next-generation security measures, including data loss prevention methods, cloud-based solutions, and contact center protection initiatives, retailers are sheltering sensitive digital content and lessening their exposure to fraud.
Businesses of all sizes need to assess which data is most at risk from a cyberattack and ensure their security solution protects against potential threats.