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Dynamics 365

Retail perspectives, pt. 4: protect your business against fraud

As Microsoft continues to support organizations on the front lines of the COVID-19 crisis, a priority is providing customers with the right tools to protect their revenue in this challenging economic environment.

Customers and companies alike are increasing their online presence, becoming more vulnerable to fraud. Microsoft itself is one of the top 10 e-commerce companies in the world and has faced significant fraudulent activities over time. To address this, Microsoft developed a solution utilizing its state-of-the-art technology stack which is now available for all retailers to use. Microsoft Dynamics 365 Fraud Protection is a cloud-based solution designed for e-commerce, brick-and-mortar, and omnichannel merchants to help protect their revenue and reputation, by providing tools and capabilities to decrease fraud and abuse, reduce operational expenses, and increase acceptance rates, while safeguarding user accounts from fraud exposure.

The accelerated digital transformation

During the week after the World Health Organization declared COVID-19 a pandemic, online activity increased 23 percent. Subsequent social distancing policies forced even more customers online to do most of their work, academics, shopping, social interaction, and entertainment activities.

Customers have been forced to use digital channels for everything, making it easier for fraudsters with the increase in volume. During this uncertain time for customers, fraudsters are able to take advantages.

Retailers, grocery stores, pharmacies, and others accelerated their digital transformation journey seemingly overnight. As businesses scrambled to respond and move online, they lacked appropriate fraud prevention, detection, and protection systems, which lead to increased fraudulent attempts with transactions.

In these trying times, merchants need to focus on protecting their revenue and their customers. This becomes particularly challenging as merchants experience higher fraud losses and are further impacted by wrongful rejects of legitimate customers, together with greater costs, as fraud liability lies with merchants for online transactions, opposite to in-store (POS) transactions.

Dynamics 365 Fraud Protection with purchase protection capability helps merchants protect online revenue by improving commerce transaction acceptance rates while reducing checkout friction and providing merchants with insightful tools to make decisions that appropriately balance revenue opportunity and customer experience verses fraud loss. The transaction acceptance booster enables merchants to share transactional trust knowledge with issuing banks to help boost authorization rates and reduce wrongful rejects, helping protect revenue streams.

To efficiently and effectively prevent and protect a business—and its customers—against fraud, merchants need visibility into their system activity, a thorough understanding of fraud patterns, and the right tools to defend themselves and their customers against fraud attacks. Dynamics 365 Fraud Protection adaptive AI technology and the fraud protection network provide merchants with the tools needed to optimize fraud controls and boost fraud immunization on a continuous basis.

The urgent need to protect your revenue and reputation

People are spending more hours than ever before in front of their screens, opening new accounts for online shopping, for content consumption, for gaming, for work collaboration tools, and on social networking platforms. If businesses do not have a robust fraud protection system in place, they open the door to fraud and abuse, exposing their customers’ accounts and information to automated bot attacks and account takeover.

Now, it has never been more important for organizations to increase their cybersecurity and equip themselves with the necessary tools to keep fraudsters away while maintaining their standard level of service.

While implementing Dynamics 365 Fraud Protection with account protection capability, merchants are enabled to counteract fraudulent account access, fake account creation and account takeover, and safeguard user accounts from abuse and fraud. The account assessment aligned to the fraud protection network empower merchants to protect their businesses from fake accounts and attacks to their ecosystem, using adaptive AI, bot detection and device fingerprinting, while protecting customers’ account activity.

With the imposition of social distancing measures, people from all ages are now doing most of their shopping online, taking advantage of special delivery at home or curbside pickup when available.

According to Business Wire, the data highlights that more customers than ever before are shopping online, including senior citizens, who have traditionally preferred physical retail options, and are now using e-commerce at a rate 15 percent higher than the same time last year.

Every time a user creates a new account, they are prompted to provide their name, email address, postal addresses, and payment information when required. All this information can be stolen or abused by fraudsters. In the United States alone, Coronavirus scams have affected nearly 53,000 Americans, reporting total losses of over $36.8 million, according to the Federal Trade Commission.

For merchants to keep abreast of this increasingly fraudulent environment, and more importantly, protect their revenue and customers from fraud and abuse, they need to rapidly adopt a fraud protection solution.

According to TransUnion, now that many transactions have shifted online, fraudsters have tried to take advantage and companies must adapt. Businesses that come out on top will be those leveraging fraud prevention tools that provide great detection rates and friction-right experiences for consumers.

Dynamics 365 Fraud Protection adaptive AI technology provides assessment on every critical step of the account lifecycle, enabling merchants to block fraud before any damage is caused, prevent account takeover, and protect their customers, while preserving business reputation.

The exacerbated diversification of fraud

With social distancing policies leading to increased idle time, there has been an uptick in unnecessary online shopping, aligned to an increase in merchandise returns and return fraud.

The hardships COVID-19 has brought to the economy may also increase items-not-received (INR) fraud as customers look to put money back in their pockets. Returns fraud abuse may also rise with customers who are quarantined engaging in activities like boredom shopping.

Dynamics 365 Fraud Protection with loss prevention capability helps omnichannel and brick-and-mortar merchants identify potential fraud on returns and discounts arising from omnichannel purchases, enabling business managers and investigators to quickly take action to mitigate losses.

Adaptive AI technology continuously learns and adapts from fraud patterns, working together with the fraud protection network to equip merchants with the tools they needed to optimize fraud controls related to discounts and returns.

Additionally, Dynamics 365 Fraud Protection operational efficiency booster helps merchants in achieving high efficiency of human resources by reducing manual efforts required to determine at-risk business entities and functions, ultimately helping business managers reduce fraudulent returns and discounts.

Staying ahead of fraud

Now is the time for you to protect your revenue, your reputation, and your customers. Dynamics 365 Fraud Protection capabilities help merchants like you combat purchase, account, and omnichannel return and discount fraud by increasing visibility and providing business insights to optimize fraud controls.

  • Step one—Dynamics 365 Fraud Protection in a Day: Analyze your historical data to quickly gain fraud insights in your environment using previous three or more months data
  • Step two—Dynamics 365 Fraud Protection in a Fortnight: Test Dynamics 365 Fraud Protection using real-time transactions and compare it to your incumbent solution using API integration
  • Step three—Protect: Use Dynamics 365 Fraud Protection as your primary assessment tool in production environment

We’re here to help you prepare for the future. Please contact your Microsoft sales representative to find out more about our range of offers to help your businesses rapidly adapt and onboard with needed technologies.

Learn more about Dynamics 365 Fraud Protection by reading Microsoft’s customer story and hear more about how Microsoft can help. Register now for the on-demand webinar, Microsoft’s Retail Best Practices for the New Economic Environment with Shelley Bransten and Alysa Taylor.

Subscribe to the Connected & Ready podcast on your preferred streaming platform to get new episodes as they launch every Wednesday, and stay tuned for our episode on fraud protection coming later in July.