When consultancy Frost & Sullivan presented Signifyd with the 2018 North American Growth Excellence Leadership Award for its pioneering work in the guaranteed fraud protection field, it was another sign that the company’s approach of transforming fraud management into a lever for revenue growth is being embraced by the mainstream ecommerce market.
Fraud protection is no longer a defensive weapon when it’s delivered through a guaranteed fraud protection model. The model harnesses big data, machine learning and domain expertise to shift the liability for fraud from ecommerce merchants to the companies responsible for protecting them.
The award, which Frost & Sullivan presented after a comprehensive 10-step review process, is based on a company’s growth, vision and strategy — and its ability to provide customers with a valuable product and experience about which they speak positively. The review involved interviews with experts and thought leaders in the field and conferring with a panel of industry experts to select the honoree.
Removing friction from fraud is a key to customer experience
“Signifyd has demonstrated a clear ability to help improve business performance by reducing fraud and increasing the customer experience by removing friction in the shopping experience,” Frost & Sullivan wrote in its 15-page analysis of the company. “With over 10,000 customers in more than 100 countries Signifyd is clearly the market leader in the guaranteed fraud protection industry.”
In fact, in the research supporting the award, Frost & Sullivan said Signifyd is “leading the industry-wide transition to the GFP (guarantee fraud prevention) models.”
The recognition of Signifyd is the latest indication that guaranteed fraud protection is being embraced by the mass market in ecommerce and by the experts who advise retail enterprises on driving success now and in the future. This spring, venture capitalist Mary Meeker, a prominent shaper of business strategy, included guaranteed fraud protection as a cutting-edge technology in her annual Internet Trends report.
The 2018 report laid out the requirements for a modern retail ecommerce technology stack. She chose Signifyd as an example of the sort of fraud management that sophisticated ecommerce enterprises require. The inclusion in the report came at the same time that a group of venture capitalists led by Premji Invest announced it was investing $100 million in Signifyd’s Series D funding. Those developments followed Signifyd being named a Cool Vendor in in Gartner’s 2017 “Security for Midsize Enterprises” report and after years of building partnerships with leading ecommerce platforms and others in the fraud field.
The Frost & Sullivan analysis laid out four key challenges facing retailers working to find the right enterprise fraud management systems and pointed to guaranteed fraud protection as the answer.
Four ways guaranteed fraud protection points to the future
1. Fraud protection must provide friction-free customer experiences: Systems need to strike the right balance between protecting the retailer and staying out of the way of a consumer intending to buy. Requiring a customer to log-in for every purchase, for instance, is too cumbersome and probably not terribly effective in the era of account takeover fraud. Furthermore, mistakenly canceling legitimate orders for fear of fraud is not an acceptable practice. In fact, even unnecessarily delaying orders for manual reviews is a step that lowers customer satisfaction.
2. Old methods are not up to the task required by modern consumers and ecommerce enterprises: Traditional fraud management, especially among large retailers, tends to rely too heavily on rules-based systems and manual fraud review. Such systems are unable to learn from real-world challenges and they push fraud teams toward conservative decisions, reducing the number of orders shipped and thereby reducing revenue. Modern systems require rich data sources to compensate for mismatches in shipping and billing addresses and the lack of other common signals when processing international orders.
3. The difficulty for large enterprise retailers to completely replace existing fraud management systems: It is unreasonable for large enterprises to completely dismantle legacy systems and turn entirely to a guaranteed fraud protection model overnight. Enterprise retailers require a solution that can run in parallel with existing systems while offering increasing value as legacy systems are phased out over time. Guaranteed fraud protection models can offer enterprise retailers immediate value in a number of common circumstances, including: Managing overflow during peak ordering periods, protecting orders that are bought online and picked up in store and by more accurately reviewing orders that are initially — and incorrectly — declined for fear of fraud.
4. Identifying the right product and provider attributes for success: In short, fraud protection systems need to be anchored by machine learning models that consume high-quality data across different sales channels. Case management needs to be automated so that alerts are issued across payment types, channels, customer accounts etc. And the technology and customer support needs to be flexible and customizable for different needs among different retailers.
“Signifyd has emerged as the market leader”
In recognizing Signifyd’s leadership, Frost & Sullivan concluded that the company’s guaranteed fraud protection model provides solutions to the key challenges.
“Frost & Sullivan research indicates that Signifyd has emerged as the market leader in the GFP (guaranteed fraud protection) markets and is leading the industry-wide transition to GFP models,” the report accompanying the award said. In particular, the consultancy lauded Signifyd’s ability to deliver on its friction-free experience promise with its “potent combination” of machine learning and domain expertise.
“Signifyd’s competitors are mainly focused on loss prevention, as opposed to customer experience enhancements,” the report said.
It also pointed to Signifyd’s rapidly growing and broad customer base, saying it has allowed the company to capture “the most diverse set of first party transactional and behavioral data” in the market.
“Frost & Sullivan’s research indicates that Signifyd is the only company currently delivering complete fraud protection guarantees to support a highly diversified set of customers and use cases in U.S. ecommerce fraud prevention markets,” the report concluded.
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Contact Mike Cassidy at firstname.lastname@example.org; follow him on Twitter at @mikecassidy.