We’d be less than honest if we said we weren’t pretty excited about being named a Cool Vendor(1) in Gartner’s 2017 “Security for Midsize Enterprises” report.
After all, who doesn’t want to be cool? And sure, we realize that being excited about being cool is a bit of an oxymoron. But we believe this recognition is a reflection on more than just Signifyd. In many ways, it is an acknowledgement of a relatively new kind of online fraud protection.
“We’re gratified that Gartner recognized, what we feel is the work we’ve done to help make our merchants successful, while improving the customer experience they provide,” said Signifyd CEO Raj Ramanand. “Our guaranteed fraud protection allows merchants to ship more orders without the fear of fraud. They know they can do the work that that went into retail to do. Meanwhile, we’ll take care of fraud, guaranteeing to pay 100 percent of any fraud costs on orders we’ve approved that later turn out to be fraudulent.”
Guaranteed fraud protection shifts liability away from merchants
We believe that what distinguishes Signifyd in the fraud field is that we are the largest provider of guaranteed fraud protection, an innovative approach that relies on big data and machine learning, while shifting fraud liability from merchants to the companies providing the protection.
Because Signifyd’s fraud protection model is constantly learning what fraud looks like, it is able to keep up with the rapidly evolving tools and tactics of today’s fraudsters. That saves merchants from chargebacks and the other costs that come along with being defrauded.
Perhaps more importantly, a smart machine also learns what legitimate customer orders look like. Merchants lose billions of dollars a year because they needlessly decline legitimate orders that show signs they might be fraudulent. It’s the challenge of false declines, which Business Insider said cost retailers $8.6 billion in 2016. The figure was a third again higher than the amount merchants lost due to actual fraud that year, the publication reported.
While fraud and false declines take a clear toll on an ecommerce retailer’s profit margin, dealing with the challenge in a ham-handed way brings with it a host of negative effects. Customers today expect orders to be processed and delivered quickly. Merchants who rely on manual order reviews can find themselves swamped at peak times, stretching out the time it takes to get customers their orders.
False declines present an even more serious problem for those trying to provide a smooth customer experience. When a legitimate customer’s order is declined, it is highly unlikely that customer will give the retailer another chance with another order. For that reason, the measure of false declines is sometimes referred to as the “insult rate.”
Signifyd provides false declines insights
But with Signifyd, merchants can ship approved orders with confidence, even if legacy systems would flag the order as fraudulent. Signifyd, after all, has taken on the financial liability for the approved order should it in fact turn out to be fraudulent.
In fact, one of the keys to the success of guaranteed fraud protection is the value that shipping seemingly fraudulent orders brings. Legacy fraud protection systems are geared to spot fraud and withhold orders that appear fraudulent. Such systems are reinforced in one direction and they become more conservative as time goes on.
A guaranteed fraud protection system, on the other hand, learns from shipping seemingly fraudulent orders. Over time it sees orders shipped that might have traditionally been labeled fraudulent, but turn out to be legitimate. The machine learns from that data and knows that those kinds of orders are in fact legitimate.
We believe that it is all part of the future of Ecommerce Fraud Management. And we’re not going to lie: It is indeed pretty cool when that is recognized.
1. All statements in this report attributable to Gartner represent Signifyd’s interpretation of data, research opinion or viewpoints published as part of a syndicated subscription service by Gartner, Inc., and have not been reviewed by Gartner. Each Gartner publication speaks as of its original publication date (and not as of the date of this blog post). The opinions expressed in Gartner publications are not representations of fact, and are subject to change without notice.
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Contact Mike Cassidy at firstname.lastname@example.org; follow him on Twitter at @mikecassidy.