M&S and Co-op recently reported damaging cyberattacks on their IT systems, with M&S reporting losses of around £300 million as they witnessed their market valuation decline by £1.3 billion.
Both had issues with empty shelves and M&S had to switch off the capability to order online for many weeks.
Along with the significant financial cost due to the disruption in sales because of these cyberattacks, there’s also the loss of consumer trust and reputational damage that can lead to once loyal customers not returning.
There’s also the issue of ecommerce fraud. Juniper Research reveals that this type of fraud will rise from $44.3 billion in 2024 to $107 billion globally in 2029; a growth of 141 per cent, which will impact negatively on retailers’ bottom lines.
With these challenges retailers need to bolster their efforts in cybersecurity which means recognising the value of obtaining customer contact data quality, and in delivering simple ID checks, as they look to avoid future cyberattacks and ecommerce fraud.
Reliable customer contact data strengthens cybersecurity measures
The quality of customer contact data is critical to the effectiveness of ID processes, influencing everything from end-to-end fraud prevention to delivering simple ‘non-intrusive’ ID checks; meaning more complex, customer intrusive and costly identity verification practices may not be necessary.
It’s by having access to accurate customer contact details, such as name, address, email and phone number that the verification process is made more reliable. With this data ID verification technology can effectively cross-reference the information provided against official databases, or other authoritative sources, without inconsistencies that could result in false positives or negatives.
It’s important to recognise that the cornerstone of contact data quality is address verification – having a consistently accurate, standardised address. It’s much easier to match and verify identities across multiple sources with up-to-date customer addresses. As a result, verifying the accuracy and legitimacy of an individual’s address should be the first stage in any identity related process, with any inconsistencies between a claimed address and official records highlighting a possible fraudster.
Running the National Change of Address (NCOA) database against your own helps to maintain accurate customer addresses because it provides quick access to the new addresses of customers who have moved home, and highlights who have passed away. This prevents customer communications being sent to incorrect addresses, which could encourage fraud. Also, such data will aid the delivery of a speedy fulfilment process, to ensure a consistent positive customer experience.
Undertake eIDV
“Always on” automated electronic ID verification (eIDV) tools are vital in undertaking ID verification with fraudulent payments on the rise worldwide. They can, in real-time, cross-check the names and addresses (for proof of address), email addresses and phone numbers provided by prospective customers online. This results in a good customer experience while preventing fraud.
It is preferable to source an eIDV platform with access to billions of consumer records from reputable sources around the world. This ensures the delivery of an efficient customer ID verification service, globally.
Maturing technology is enabling eIDV to be offered at a range of affordable options, which is good news for a retail sector that operates on tight margins.
Mobile ID verification
With around 60 per cent of the world’s population having access to a smartphone mobile ID verification, which is matching a name to a mobile number, is becoming increasingly important as part of the ID verification process. A key reason why is mobile verification utilises real-time data from mobile network operators (MNOs) to authenticate an individual’s identity with a high degree of accuracy, which is unlike traditional identity verification methods that depend on semi-static data.
Additionally, mobile ID verification is often more cost effective when compared to identity verification performed against regulated data sources such as credit bureaus and government bodies.
Value of the IP address
As part of the identity verification process don’t forget the significance of the IP address. It’s possible to verify whether the IP address of a prospective buyer matches or is geographically close to the physical address they’ve provided. For example, if someone is looking to buy a big ticket item in a different country from their registered address, implementing additional verification checks would be advisable prior to it being approved.
Stop phishing
Outside of ID verification ensure there is a first line of defence in place when it comes to email-based security. This is because email is a common route cybercriminals take to enter an organisation, with phishing the main tactic. To protect the workforce from potentially falling victim to phishing, and a range of other attacks on your system that puts the entire organisation at risk, it’s critical to employ services that identify and prevent a full range of bad actors with phishing, scam, malicious and malware domains at point of entry.
In summary
As cyberattacks become more frequent and damaging for retailers, implementing clean data practices and employing comprehensive yet affordable global ID verification services will play an increasingly vital role as part of wider cybersecurity efforts.
About the Author
Barley Laing is UK Managing Director at Melissa. Barley Laing established and leads the UK office of US-headquartered global data quality and ID verification business, Melissa.
As Managing Director, with 28 years of technology and data industry experience, his role is focused on meeting the data quality, address and ID/compliance needs for organisations in the UK, Ireland, Scandinavia, and worldwide.
The team that Barley heads up provides data consultancy, sales and technical support across their wide range of market leading web services, apps, SaaS and on-premise software solutions. These help organisations to deliver efficient multichannel customer engagement; onboarding; build customer loyalty; optimise organisational efficiency; and deliver data management and ID verification to meet Know your Customer (KYC), Know your Business (KYB) and Anti-Money Laundering (AML) requirements.
