COSTA MESA, Calif., June 25, 2015 /PRNewswire/ -- Today, Experian's global Fraud and Identity business released its analysis of client transaction data from the 2014 holiday season, showing an 80 percent reduction in the number of manual reviews among online merchants using the company's fraud and identity products and services compared with the industry average. These results and other observations indicate that a customer-centric approach to fraud prevention would be more effective for many online merchants, leading the company to recommend five best practices for online merchants preparing for the 2015 holiday season.

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                   Experian fraud improvements over industry
                                    average
                   -----------------------------------------

    Pulled for manual                                 18x fewer orders pulled
     review                                           for manual review
    -----------------                                ------------------------

    Order reject rate                                 14x fewer rejected
                                                      orders
    -----------------                                -------------------

    Attack rate                                      15x fewer fraud attempts
    -----------                                      ------------------------

    Source: Data is based on Cybersource 2014
     Fraud Report and Experian analysis of client
     transactions. The industry average for
     orders pulled for manual review is 5 percent
     to 30 percent or higher, depending on the
     size of the organization.
    ---------------------------------------------

[View our Customer Centric Fraud Prevention Strategy infographic]

Experian's holiday fraud data highlighted the performance delta between the company's technology and alternative approaches. Many merchants, for example, will loosen their fraud rules to process more orders during peak periods. To compensate for the increased risk of fraud caused by this approach, more manual reviews were conducted. This is a counterproductive approach that drives up operating costs and increases customer friction. Despite the increase in manual reviews, undetected fraud can occur and good revenue can be left on the table.

"Good fraud detection should be about more than preventing loss. It should increase revenue by allowing more good customers through and providing a hassle-free shopping experience, especially during the critical holiday shopping season," said Steve Platt, Global EVP, Fraud and Identity, Experian. "To help our clients with this, we combine insights derived from device intelligence and digital behavior, with the contextual data about the event itself (e.g., transaction, application, login, etc.). We analyze millions of transactions per day, evaluate risk in real time and deliver responses in mere milliseconds. With this approach, our clients are catching more fraud and reducing customer friction, leading to fewer manual reviews and lower operational costs. It's a win-win-win."

For one U.S. multichannel retail client, this "win" translated into a 95 percent detection rate (amount of fraud caught) valued at $17.3 million during the fourth quarter alone. This is just one example of how applying the following recommended best practices can help clients reduce fraud and drive top-line growth.

Best fraud-prevention practices for the holidays
 With the 2015 holiday shopping season less than five months away, now is the time for merchants to prepare to effectively protect themselves and their customers during the busiest time of the year. Experian(®) shares five fraud-prevention best practices for a stronger 2015 holiday sales cycle:


    --  Avoid one-size-fits-all approaches -- Many online merchants make a
        general temporary adjustment to loosen fraud-prevention rules,
        supplementing with additional manual reviews to accommodate the
        increased holiday volume. Not only does this increase operational costs
        for the business, but it also translates to an insult rate (falsely
        identifying good customers) of 29 percent to address a 0.9 percent
        problem. This is a significant imbalance. By leveraging the right
        fraud-prevention measures at the right time, you'll see increased and
        sustainable top-line growth.
    --  Make your customer data work for you across the business -- While many
        risk teams already use internal customer data to improve fraud
        detection, the explosion of channels and devices means there are other
        data sets across the enterprise that can be leveraged effectively to
        maintain visibility and authenticate identities across the digital
        ecosystem. Further, by establishing and maintaining a single, persistent
        customer view, companies benefit from additional, actionable insights
        throughout the customer journey. According to Experian Marketing
        Services' 2015 Digital Marketer Report, 89 percent of marketers globally
        say that they have trouble achieving a single customer view. By using
        technology to link data sets and identities together -- like customer
        loyalty data with customer transactional data, social and digital
        behavior, demographics and more -- merchants are getting a clearer
        picture of who their customers are. In addition, they have a better
        understanding of how those customers engage across channels. It is also
        critical to understand that the amount of data alone is not the answer;
        the insights and intelligence gleaned from or applied to that data must
        be considered as well.
    --  Bring fraud and marketing efforts together -- Although this is not an
        obvious combination at first glance, this relationship can be one of the
        most powerful in the enterprise. Just last year, a survey by Experian
        Marketing Services reported that 80 percent of marketers planned to run
        cross-channel marketing campaigns in 2014. More channels, more campaigns
        and increased volume mean new challenges for fraud-risk managers.
        Together, fraud and marketing teams can help the top line and the bottom
        line by preventing bad transactions without impacting the customer
        experience. The past often can tell a lot about the future. These groups
        should jointly review past holiday performance in terms of both top-line
        growth (i.e., successful campaigns) and successful risk strategies that
        complement those growth objectives and use the insight to form future
        strategies.
    --  Establish a dedicated team responsible for the customer experience --
        Several of our financial services clients are reporting notable success
        with digital groups. These teams are responsible for bringing together
        marketing, risk and consumer experience experts to create and maintain a
        directional and strategic customer purview across channels. Formalizing
        the sharing of data, processes and best practices among these
        traditionally siloed departments is a way to process more customers
        while reviewing fewer transactions, catching more fraud and providing a
        hassle-free customer experience.
    --  Stay ahead of evolving market conditions -- There are some things that
        are out of retailers' control, such as the impending October 2015 EMV
        rollout in the United States. While most point-of-sale transactions will
        be vastly safer and more secure as a result of the rollout, we have seen
        card-not-present fraud rise in Europe, where EMV already is in place.
        This is because criminals will focus their energies on the fraud they
        can still perpetrate. We also have the proliferation of personalized
        mobile transactions. While this technology aids in ensuring a seamless
        customer experience, personal and/or financial information now is being
        exchanged at an increasing rate and exposing businesses to new fraud
        risks. Being aware and having a plan to react quickly to the
        ever-changing fraud landscape can significantly increase the chances of
        thwarting criminals and keeping businesses safe.

Listen to a recording of our 2015 Holiday Fraud webinar to learn how your business can prepare its fraud strategy for this season

About Experian
We are the leading global information services company, providing data and analytical tools to our clients around the world. We help businesses to manage credit risk, prevent fraud, target marketing offers and automate decision making. We also help people to check their credit report and credit score, and protect against identity theft. In 2014, we were named by Forbes magazine as one of the "World's Most Innovative Companies."

We employ approximately 17,000 people in 39 countries and our corporate headquarters are in Dublin, Ireland, with operational headquarters in Nottingham, UK; California, US; and Sao Paulo, Brazil.

Experian plc is listed on the London Stock Exchange (EXPN) and is a constituent of the FTSE 100 index. Total revenue for the year ended March 31, 2015, was US$4.8 billion.

To find out more about our company, please visit http://www.experianplc.com or watch our documentary, "Inside Experian."

Experian and the Experian marks used herein are trademarks or registered trademarks of Experian Information Solutions, Inc. Other product and company names mentioned herein are the property of their respective owners.

Contact:
 Matt Tatham
Experian Public Relations
1 212 380 2939
matt.tatham@experian.com

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SOURCE Experian