Learn from consumer behavior changes to transform for what’s next



Emailage provides on-demand recordings of all virtual events. The article below is a transcript of Amador Testa’s presentation as part of the Virtual Digital Identity Summit 2020. It has been edited for clarity.

2020 forced consumers and businesses to transform

The way consumers are buying and paying for products and services has changed. Fast. The future of e-commerce and digital transactions means businesses need rich, shared data insights to accomplish the dual imperative of deterring fraud and delivering great consumer experiences. Chief Product Officer Amador Testa shares how 2020 changed the focus and how businesses can reimagine identity strategies to plan for the future of payments.

How did the focus change from 2019 to 2020?

Amador Testa: The way technology has evolved really opened new doors for fraudsters. Today, they can create fake videos, as long as they have enough images or voice samples from a person. They can create these really interesting capabilities for social engineering. So, that has been massive. And that was part of what risk professionals were looking at and preparing for at the end of 2019. Then 2020 changed everything as the world dealt with the COVID-19 pandemic. It changed our behaviors: how we work, how we engage, how we transact, what and how we buy.

Why is now the time to reimagine identity?

Amador Testa: So, we see these digital identities playing a massive role today in fraud prevention. And that’s because of how the pandemic forced digital adoption. In just six months, we’ve seen digital commerce volumes rise by 52 percent over the prior year. And where there’s volume, there’s probably going to be villains. Businesses really have to reimagine identity as a matter of survival, and because trends like buy-online-pick-up-in-store, contactless delivery and touchless payments are likely to stick.

What are the major trends happening in digital transactions?

Amador Testa: There’s a single major trend in digital transactions, which is sudden, rapid digital adoption. Because of this, there’s a customer trend and two fraud trends that are notable:

  1. We need to educate new digital users about cybersafety. Generations that are not digital natives need adequate training to protect their accounts and, by extension, business data. Consider this a parallel to the way you train employees on cybersecurity.
  2. Account takeover Unfortunately, we see a 40-, 50-percent increase on attempts. Luckily, we are able to prevent 90 percent-plus of that activity working closely with our merchants and partners. And, it’s because we see very clear trends. For example, two or more distinct billing addresses attached to the same email address. Basically, this could be driven by previous compromises where fraudsters had a good email address for a consumer. They take advantage of all this volume of activity. Lots of transactions happen so they can deploy and start using some of these emails in an attempt to take over accounts.
  3. Friendly fraud — We are also seeing a very strong trend where the consumer is behind on the transaction. So this is where we see a transaction being disputed, or being reported as fraud to our network. And, we are seeing a lot of fraud being reported on good identities. It’s one of the most difficult transactions to prevent because the data tells us, “Hey, this is a good consumer,” right? So, they’ll pass every single control you have. Often, they say they just viewed the transaction and it’s not right. It becomes more preventive, avoiding the next one. Or, if you have enough information, you can dispute that chargeback and try to get it reversed. But, unfortunately, it’s one of the trends that we are seeing.

Watch the entire on-demand Digital Identity Summit Webcast with Amador Testa and register for upcoming events in the virtual series.

Watch the webcast.