Your Data Can Become Your Best Detective to Hunt Fraud

We’ve all felt the shockwaves of the e-commerce eruption. It’s transformed the way people and businesses make payments. What’s more, the amount of data it’s creating is swelling with every second. In just 10 years, the amount of data in existence went from 1.2 trillion gigabytes to a whopping 59 trillion gigabytes — that’s a rise of 5,000 percent.

Many companies, including retailers, take the view that more data means more business insight opportunities. This is true to some extent — if that data is accurate and analyzed properly. But from a security perspective, the more data you hold, the more potential targets fraudsters have to attack.

Technology is evolving at break-neck pace, but fraudsters are moving even faster. Just in 2021, there was an estimated $20 billion lost to online e-commerce fraud, a growth of 18 percent in one year. And all of the headline-making data security failures cause huge and irreversible damage to businesses, harming their reputations and weakening customer trust.

Then there’s the time and cost involved in repairing defenses, including the painful financial penalties imposed by regulators for noncompliance with data security regulations like PCI-DSS and GDPR.

That’s why it’s more important than ever for retailers to optimize their data reporting and reconciliation capabilities, and turn their data into their best detective to fight fraud.

For retailers and the third-party companies that work with them like payment processors, customer data comes from several sources, including transactions and new customer registrations.

It’s vital that businesses ensure that sensitive transaction or customer data is protected, and complies with payment industry regulations. At the same time, that data needs to be accurate and accessible so that it can be used to generate business insights and future growth.

Retailers and their processing partners need to know where their data resides in their systems, which data needs safeguarding, and what data needs purging when required. Often, data can be duplicated, made redundant, or worse, left unprotected altogether. It makes no business sense to store stale data that’s no longer needed. If data doesn’t exist in your systems, it can’t be breached or used fraudulently.

Optimized Data Reporting Can Hunt Down Fraud

With data volumes rising so rapidly, it’s just not humanly possible to manually review every fragment and identify reconciliation errors or every potential fraud-related irregularity.

By automating data reporting and reconciliation, businesses can quickly aggregate and itemize information, identify and hunt down potential fraud incidents, and speed up reconciliation times with no need for manual investigation.

When a third party's core data reporting and reconciliation platform, and all the information that goes into it, is tokenized, it doesn't ever store sensitive data, ensuring compliance with PCI DSS regulations. Data can be consumed from any retailer’s payment processor, acquirer, bank or third-party companies, and gather it all into one place. Once that data has been parsed and analyzed, clients have the ability to view that data at any time, in a standardized and easy-to-use way.

It’s easy to integrate APIs into the new generation of automated reconciliation platforms, and route data instantly to fraud detection systems using machine learning. With every data source and transaction, machine learning constantly adapts to identify new fraud trends, instantly doing the detection work that would need huge in-house staff teams.

When businesses align fraud prevention with enhanced data reporting and reconciliation services, they give themselves the best possible protection against emerging threats, and combined with first-class client support, retailers can generate even more valuable business insights and build strong foundations for future growth.

Aaron Holmes is the CEO of Kani Payments, focused on supporting FinTech and payment systems in achieving hassle-free reconciliation and reporting. Kani Payments is a reconciliation and reporting platform specifically designed to reduce complexity for financial services businesses.