Omnichannel and risk protection: a delicate balancing act

Sabu Samarnath
Sabu Samarnath
3 min read

Today, innovation and protection need to sit together – they can no longer be at odds. It may be a delicate balancing act, but it’s one that financial institutions will have to perform if they want to keep hold of their customers.

In response to this new demand, AI-powered automation can provide companies with a single view of the customer journey and potential fraud access points, meaning they can offer customers omnichannel banking without compromising the security or seamlessness of the experience.

PSD2: a tectonic shift towards a digital single market

Demand for omnichannel convenience is on the rise. Consumers want to be able to shop anywhere, anytime, regardless of their preferred means.

75% of consumers say it’s important or extremely important to be able to easily switch between channels when interacting with their bank.

One of the factors bringing about this shift is the Second Payments Services Directive (PSD2). This new European mandate dictates that banks and merchants must allow access to new payment providers, such as social media platforms and various new fintechs. This means that existing fraud detection systems will be under immense pressure to cope with the increased velocity of real-time payments and higher data throughput when more channels are in use.

Friction costs businesses their customers

Somehow, financial institutions need to be able to provide omnichannel without introducing friction, because customers won’t settle for anything less than a seamless experience. We’ve already seen this with card payments in recent times: according to Javelin, nearly 40% of cardholders abandon cards after false declines, and a quarter of those people move their cards to the back of their wallets. Transaction friction costs payment providers their customers.

More channels = more blind spots 

Convenient for customers though it may be, omnichannel banking poses unique security challenges.
A Riskified study found that fraud prevention may be taking a backseat to a more customer-centric approach; companies are becoming too preoccupied with omnichannel user experience and mobile payment performance to focus on security issues.

But the threat of omnichannel is very real. The more channels there are, and the more siloed data there is to track, the more potential weak spots appear.

Unite organisational silos 

One of the keys for banks to make sure their security systems keep up with omnichannel technology lies in uniting organisational silos that deal with the different stages of fraud. Risk identification, customer behaviours – they all need to work in unison, under the same framework. A disparate view of a fraud case often means that investigators and analysts have multiple views of customer risk. Some fraud risks may be missed by certain silos or separate systems, or it may take longer to review cases across different departments – potentially delaying legitimate customer journeys.

Multiple channels, single platform

To keep up with the rate and expanse of omnichannel payments, businesses will need to house their fraud processing under an automated decisioning platform that can seamlessly integrate with multiple interfaces and solutions.

The benefits of a single fraud decisioning platform are manifold. They can:

  • provide a single view of the customer journey and potential fraud access points.
  • take data and behaviours from a large array of locations to deliver a holistic approach to detection and investigation.
  • be encoded with a company’s fraud expertise, meaning that the highest standard of fraud processing can be applied across various channels and large data sets to deal with multiple cases simultaneously.

Automating fraud processing across channels and with a bedrock of human expertise means that cases are more likely to be correctly spotted, less likely to be falsely flagged, and can be dealt with faster.

The end result: increased efficiency, less friction in transactions, and as a result, more customer loyalty.

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