The New Era of Payment Fraud and ATO: Benchmarks, Trends, and Insights

WEBVTT

1
00:00:11.060 –> 00:00:16.730
Brent Sleeper: Good morning, everyone, and thank you for joining us today. We really appreciate you taking the time to be here.

2
00:00:16.900 –> 00:00:22.299
Brent Sleeper: We’re going to spend the next 30 minutes or so unpacking some of the most interesting findings from CIF’s latest digital

3
00:00:22.800 –> 00:00:28.570
Brent Sleeper: latest Digital Trust Index Report, which looks at fraud trends across the global network of digital businesses.

4
00:00:30.070 –> 00:00:45.299
Brent Sleeper: My name is Brent Sleeper, and I’m a Senior Product Marketing Leader here at SIFT, and I’ll be guiding our conversation. And I’m so fortunate to be joined by Jeremy Cannon. Jeremy leads SIFT’s managed services team, and he works directly with companies across industries to tackle these challenges every day. Jeremy, welcome.

5
00:00:45.750 –> 00:00:47.419
Jeremy Cannon: Thanks, Brandon, I’m excited to be here.

6
00:00:47.780 –> 00:01:03.290
Brent Sleeper: I’m glad to be here with you. I’m really looking forward to learning from you as you help us translate what we’re seeing in the data into what it means in practice. We also have a couple quick polls along the way to get perspective from our audience and to compare it with what we’re seeing in the report. So, with that, let’s jump in.

7
00:01:05.099 –> 00:01:15.350
Brent Sleeper: SIF’s 2026 First Quarter Digital Trust Index reveals how fraud is evolving across payment fraud, account takeover, authentication, and consumer trust.

8
00:01:15.480 –> 00:01:18.299
Brent Sleeper: And our most recent fraud benchmarks are here.

9
00:01:18.410 –> 00:01:28.110
Brent Sleeper: Not to spoil the discussion, Jeremy, but what I’m picking up on across the report is that fraud hasn’t necessarily exploded, it’s maybe redistributed.

10
00:01:28.510 –> 00:01:31.780
Brent Sleeper: It seems like it’s earlier, it’s more embedded in accounts.

11
00:01:32.310 –> 00:01:33.579
Brent Sleeper: It’s harder to see.

12
00:01:33.740 –> 00:01:35.830
Brent Sleeper: Does that resonate with what you’re seeing in the field?

13
00:01:36.100 –> 00:01:54.650
Jeremy Cannon: Yeah, I think you’re absolutely right. Fraud hasn’t gone anywhere, it hasn’t significantly gone up, necessarily, but we’re seeing people pivot, change tactics, and I think as we… we’re seeing fraud happen, like, early and earlier in the user journey, and really across all stages of the user journey.

14
00:01:55.950 –> 00:01:59.120
Brent Sleeper: Yeah, yeah, it’s… it’s, it makes a lot of sense.

15
00:01:59.410 –> 00:02:08.769
Brent Sleeper: And, you know, I think when I reviewed the report, the data doesn’t necessarily show just how much fraud is happening, but how it’s changing, as you said.

16
00:02:09.120 –> 00:02:12.060
Brent Sleeper: Moving earlier in the journey, and shifting from

17
00:02:12.350 –> 00:02:28.370
Brent Sleeper: kind of moments in time at a transaction to really cross that whole account journey. We’re also seeing new pressure from alternative payment methods, and quite honestly, a tight connection between fraud, customer trust, and ultimately revenue.

18
00:02:28.530 –> 00:02:35.930
Brent Sleeper: I’m curious, when you look at these numbers, things like…

19
00:02:36.190 –> 00:02:41.949
Brent Sleeper: You know, the fact that transaction growth, you know, is up almost 20%, 18% year over year.

20
00:02:42.270 –> 00:02:47.650
Brent Sleeper: And yet, the fraud rate itself remains relatively constant. What does that tell you?

21
00:02:48.280 –> 00:02:59.830
Jeremy Cannon: I mean, it tells me that you’re still losing more dollars for fraud, right? If the percentage is the same, and even if the fraud rate is stable, if you’re selling more, doing more commerce online, that…

22
00:02:59.830 –> 00:03:10.240
Jeremy Cannon: 10%, 20% against a bigger number, it’s just a bigger loss to your company, and I think we’re all… everyone who’s in this webinar, everyone who’s attending, you know, our bottom line is to…

23
00:03:10.240 –> 00:03:24.270
Jeremy Cannon: retain more revenue, and one of the ways we do that is by, you know, cutting out fraud and mitigating fraud. So, just because the baseline percentage stays the same, if transaction growth is going up, that means dollar amounts are going up.

24
00:03:25.500 –> 00:03:28.480
Brent Sleeper: Yeah, and, you know, I think a lot of us are,

25
00:03:28.870 –> 00:03:35.189
Brent Sleeper: Trained, maybe, to look at that… at that rate, and if we’re… if we’re keeping… if we’re keeping the rate itself flat, we’re doing a good job, right?

26
00:03:35.510 –> 00:03:49.490
Brent Sleeper: But as you say, if your overall transaction volume is growing, those are real numbers. I mean, I think you said to me yesterday when we were talking about this that, you know, 1% of 100,000 is not the same thing as 1% of 100 million, right?

27
00:03:49.800 –> 00:03:59.870
Jeremy Cannon: Exactly, and I think, you know, as fraud practitioners, we do look at these percentages a lot, but our CFOs and our finance suite might think about these numbers a little bit differently.

28
00:04:00.410 –> 00:04:01.760
Brent Sleeper: Yeah, yeah, I hear that.

29
00:04:04.110 –> 00:04:12.170
Brent Sleeper: One of the things I’m kind of interested in hearing, I think we have a poll to put up on the screen, perhaps.

30
00:04:12.280 –> 00:04:21.210
Brent Sleeper: about what kind of accounts are most frequently compromised. You know, we have a banking, financial, food and delivery

31
00:04:22.089 –> 00:04:31.090
Brent Sleeper: gaming or gambling, social media, travel, lodging. I’m curious what all of you in the audience think the answer here might be.

32
00:04:37.050 –> 00:04:43.489
Jeremy Cannon: And we’ll give it a beat for everyone to get their answers in, and then we’ll see… we’ll see what we got here.

33
00:04:50.530 –> 00:04:52.690
Brent Sleeper: Are you seeing those numbers come up on screen, Jeremy?

34
00:04:52.690 –> 00:04:56.169
Jeremy Cannon: I am not. I’m seeing still the poll,

35
00:04:57.030 –> 00:05:14.789
Jeremy Cannon: So, I don’t know, we might need… we might need our backstage help to… to show us what the results were. Oh, here we go, I got them. 39% said baking and finance, 17% said food, 11 for gambling, 33% said social media.

36
00:05:17.500 –> 00:05:19.439
Brent Sleeper: Place a wager on the answer?

37
00:05:20.650 –> 00:05:21.950
Jeremy Cannon: Alright, let’s,

38
00:05:22.210 –> 00:05:29.540
Jeremy Cannon: you know, I don’t wanna… I don’t wanna commit fraud, I know the answer, so we won’t… So, yeah.

39
00:05:30.180 –> 00:05:30.800
Brent Sleeper: Go ahead.

40
00:05:31.020 –> 00:05:41.859
Jeremy Cannon: Social media and banking are about tied, and I think when Brent and I were going through these numbers, one of the things that… at first, I think social media sort of, took me a little bit back. I was…

41
00:05:41.860 –> 00:05:56.869
Jeremy Cannon: expecting it to be up in the top, but maybe not tied with banking. It seems our audience members maybe had a better grasp on this than me. But one of the things, you know, Brent and I talked about when we were looking at this is, like, if you get into someone’s social media.

42
00:05:57.400 –> 00:06:05.940
Jeremy Cannon: you know, you have a menu of things that you can access. If people are using social logins, if they’re using, you know, their Facebook to get into

43
00:06:05.940 –> 00:06:24.360
Jeremy Cannon: all their various accounts, it unlocks all these other things that are below this, right? As well as the ability to do social engineering-type fraud. So I think, you know, once I, like, stepped back and sort of thought about it, it wasn’t too surprising. Like, it is very powerful if you get into the right social media account.

44
00:06:25.290 –> 00:06:37.509
Brent Sleeper: Yeah, I hear that, and, you know, I think, maybe counter-intuitively, a lot of us don’t treat our social accounts with the care that we might, you know, say a banking login or anything else.

45
00:06:37.990 –> 00:06:44.660
Brent Sleeper: and inadvertently exposing ourselves, maybe, to more harm than we think. You know, not just posting

46
00:06:44.750 –> 00:07:03.970
Brent Sleeper: an off-color tweet, maybe, in our name, but actually hijacking all kinds of other connected logins. One of the things, Jeremy, I’m curious in your perspective on is that idea of how fraudsters and cybercriminals, you know, can use one login, essentially, as a

47
00:07:04.160 –> 00:07:14.240
Brent Sleeper: as a lily pad to hop from, you know, across the pond of different kinds of enterprises and organizations. Is that something you see among your customers and the…

48
00:07:14.470 –> 00:07:17.579
Brent Sleeper: You know, kinds of attacks that they’re defending themselves from.

49
00:07:18.060 –> 00:07:33.959
Jeremy Cannon: Yeah, I mean, we see this a lot, and it’s one of those things where we’re trying to… our customers are often trying to balance, you know, customer experience, the ability to just click one button and log in and manage everything, but then that… you give up some control, right? That’s not your…

50
00:07:34.480 –> 00:07:47.209
Jeremy Cannon: you’re not the one controlling that. The social media company is controlling a lot of the logins, so we see, you know, this is a challenge that our customers are facing, that I imagine most people here are facing, like, that balance between

51
00:07:47.230 –> 00:08:03.919
Jeremy Cannon: Customer experience and, you know, ease of getting into the account, ease of making the transaction, versus, you know, you being the one that holds the keys and the security that, you know, maybe you would implement that maybe the social media company isn’t.

52
00:08:04.520 –> 00:08:06.860
Brent Sleeper: Yeah, yeah, I hear that.

53
00:08:06.970 –> 00:08:12.799
Brent Sleeper: You know, maybe it might be helpful, you know, when we think about these kinds of compromised accounts.

54
00:08:13.240 –> 00:08:32.219
Brent Sleeper: you know, is ATO a single incident? Is it a pattern of behavior, you know, across a journey? What does it look like? If I’m, you know, say I’m running a, you know, an e-commerce platform, and maybe I have some sort of third-party, you know, social login enabled, what would that look like to me? How might I spot that kind of behavior?

55
00:08:33.440 –> 00:08:52.660
Jeremy Cannon: I mean, that’s one of the ones where it gets tough, right? When you’re talking about they’re logging in from these things, they’re using an existing account, it looks good. Depending on what signals you’re getting because they’re using the social login, you might be missing some signals, right? But I think as long as you’re getting signals like… like GEO and, you know.

56
00:08:52.660 –> 00:09:00.930
Jeremy Cannon: And you are pairing some of that with past customer behavior, there’s still some signals there that you can key in on to sort of say, this login looks

57
00:09:01.560 –> 00:09:16.829
Jeremy Cannon: suspicious, or out of the ordinary. And I think this goes back, you know, you mentioned ATO, and I think this goes back to what we were talking about earlier. Things are happening earlier in the journey, right? It’s not just at the transaction, it’s at login, and at login.

58
00:09:17.070 –> 00:09:28.580
Jeremy Cannon: If you have a fully, you know, as we refer to them, like, fully baked account that’s been sitting around for a while, logging in, if you can get access to that account, a lot of your behaviors can look, at least initially.

59
00:09:29.500 –> 00:09:32.050
Jeremy Cannon: Pretty normal, pretty much like you’re that user.

60
00:09:32.930 –> 00:09:46.830
Brent Sleeper: Yeah, that’s a little bit frightening, to be honest, you know, that what looks like what potentially could be a legitimate transaction is actually happening under the guise of a compromised account, and that can be very difficult.

61
00:09:46.830 –> 00:09:53.040
Brent Sleeper: to spot. Jeremy, among your customers and the enterprises you work with.

62
00:09:53.310 –> 00:10:03.450
Brent Sleeper: How are fraud teams starting to think about this problem? Are they taking responsibility for that account-level protection as well, or is it a mix? What do you see?

63
00:10:03.830 –> 00:10:12.080
Jeremy Cannon: Yeah, that’s the other thing that’s… it’s interesting about ATO and earlier in the journey, and, you know, other places I’ve worked, and some of the customers I’m working with, it’s sort of…

64
00:10:12.430 –> 00:10:19.370
Jeremy Cannon: that ATO sort of is that intersection between the fraud team and the security team, right? And so I think sometimes…

65
00:10:19.610 –> 00:10:28.389
Jeremy Cannon: sometimes there can be an ownership issue, even. Like, who actually owns this problem? Is this a security problem? Is this a fraud problem?

66
00:10:28.490 –> 00:10:34.800
Jeremy Cannon: But I’ve always had ATO as part of my remit, and I think it’s really important that we have a…

67
00:10:34.910 –> 00:10:42.630
Jeremy Cannon: Close working relationship with the security team and advocates across all the teams to sort of make sure that we’re building

68
00:10:43.000 –> 00:10:52.979
Jeremy Cannon: that step secure, whether it’s step-up authentication, because you’re seeing something different, confirm this is your account, you know, two-factor, all the various things that

69
00:10:53.490 –> 00:11:00.990
Jeremy Cannon: You would need an extra level of compromising someone to have, so… to try to protect… protect those accounts.

70
00:11:01.220 –> 00:11:04.699
Jeremy Cannon: You know, and we were… you were talking a little bit about how,

71
00:11:04.910 –> 00:11:21.609
Jeremy Cannon: you know, it could look like a normal user, and you know, I was saying one of the things we could look at is, like, geos, or what’s different about this, but if you look on here, the fourth highest… I mean, the third highest thing is grocery and food delivery. I think most of us use that while we’re traveling, right? Like, I probably use…

72
00:11:21.720 –> 00:11:39.849
Jeremy Cannon: those food delivery apps more when I’m away from home than when I am, and so I think even some of that stuff for, you know, maybe if you’re having your shoes sent to a different address, or logging in from somewhere weird to order shoes, that might look a little different, but ordering food, it, again, can look very, very normal.

73
00:11:40.340 –> 00:11:42.170
Brent Sleeper: Yeah, yeah, I hear that, and I think…

74
00:11:42.330 –> 00:11:57.869
Brent Sleeper: You know, I think whether or not a fraud team owns the account protection layer, certainly that close collaboration has got to be essential, and I don’t think we’d be at all off-base in recommending that people at least pay attention to that.

75
00:11:58.070 –> 00:12:07.750
Brent Sleeper: You know, one of the… one of the perspectives I’d love to hear from… from our audience, I think this is an opportunity for another poll, is…

76
00:12:08.050 –> 00:12:22.169
Brent Sleeper: kind of what’s your sense of how your customers, your end users, think about, think about their security practices? You know, are they, are they blind to it, not even aware of it? Are they taking…

77
00:12:22.360 –> 00:12:35.949
Brent Sleeper: steps, kind of, let’s say, introduce two factors you mentioned, or is that something that they’re willing to do? Or do you find that your customers are actually unwilling to do that, whether it’s, like, a convenience or…

78
00:12:36.810 –> 00:12:48.340
Brent Sleeper: any other reasons. So, we’ll give a moment here for folks to, to give their feedback. I’m really interested in hearing kind of what the state of consumer behavior is, today.

79
00:12:51.460 –> 00:13:02.789
Jeremy Cannon: Yeah, I’ll be curious to see what people think and what their customers say. I think you and I were talking about this a little offline, it’s like, I live sort of in a little bubble, a little tech bubble, most of my friends work in tech.

80
00:13:03.270 –> 00:13:13.500
Jeremy Cannon: I think, like, our experience is like, of course you want to have that, but, you know, I just think sometimes we’re not as close to the end user as some of our customers are, so I’d be interested to see how they feel about that.

81
00:13:16.010 –> 00:13:19.960
Brent Sleeper: And looks like we have some results up. Jeremy, what do you make of this?

82
00:13:21.550 –> 00:13:31.410
Jeremy Cannon: Yeah, I mean, I’m happy to see that 50%, 56% said their customers, are taking or willing to accept account security measures.

83
00:13:32.390 –> 00:13:38.569
Jeremy Cannon: you know, 31% unaware, and 13% are unwilling, you know, which I think is…

84
00:13:38.830 –> 00:13:44.719
Jeremy Cannon: I think it’s actually a trend in the right direction. You know, I think if we would have done this poll

85
00:13:44.940 –> 00:13:49.500
Jeremy Cannon: I don’t know, let’s call it even 5 years ago, I think we would have had very different results.

86
00:13:49.650 –> 00:13:58.100
Brent Sleeper: Yeah, yeah, that rings true to me as well, and one of the things I think is encouraging about what our audience has shared with us here is

87
00:13:58.860 –> 00:14:16.240
Brent Sleeper: that there seems to… the challenge seems to be more an issue of education, rather than actual unwillingness on the part of the consumer. Obviously, there’s going to be a minority of people that are always going to be reluctant to do that, but I think all in all, it’s actually heartening to see that.

88
00:14:18.440 –> 00:14:30.960
Brent Sleeper: And, you know, to that point, you know, we’re seeing some uptick in our data in terms of the rate at which consumers are actually adopting two-factor as well.

89
00:14:30.960 –> 00:14:45.030
Brent Sleeper: Jeremy, can you help us understand a little bit about, kind of, what our data, a combination of survey and our network data, is telling us about consumer behavior? And how does that relate to what, what our audience just shared with us?

90
00:14:45.880 –> 00:14:56.210
Jeremy Cannon: Yeah, I mean, it lines up, for the most part. I think, you know, our customers are saying that people are willing to accept additional security steps during checkout or login.

91
00:14:56.360 –> 00:14:59.880
Jeremy Cannon: I was actually…

92
00:15:00.090 –> 00:15:07.320
Jeremy Cannon: talking with my father the other day, and he is not computer savvy, and I was helping him get into an account.

93
00:15:07.500 –> 00:15:14.579
Jeremy Cannon: And he was asking me, like, why do I have to get a text message? This is so annoying, you know? And I,

94
00:15:14.620 –> 00:15:29.850
Jeremy Cannon: I explained it to him, and we talked about a friend of his who actually had an account compromised, you know, and like, once I sort of broke it down to him, like, you know, my dad’s not watching, so it’s fine if I talk about him, poorly, but even my dad, who I would say is not, technically savvy at all, was like.

95
00:15:29.850 –> 00:15:36.069
Jeremy Cannon: Once you, like, kind of put dollars and cents behind it, and, like, this is protecting your bank account, your actual money.

96
00:15:36.280 –> 00:15:45.309
Jeremy Cannon: it didn’t seem like an inconvenience to him anymore, so what I’m saying is if my dad can accept it, literally anyone can.

97
00:15:45.900 –> 00:15:56.880
Brent Sleeper: Amen to that. And I think this bottom number here on the right of our slide, that 93% of consumers are willing to take some additional security steps.

98
00:15:57.090 –> 00:16:01.390
Brent Sleeper: was pretty eye-opening to me, to be honest, because I think there’s a little bit of a,

99
00:16:01.780 –> 00:16:05.900
Brent Sleeper: A shibboleth in our space, in our industry, that all friction is bad.

100
00:16:08.020 –> 00:16:09.410
Brent Sleeper: What’s your take on that?

101
00:16:09.720 –> 00:16:14.260
Jeremy Cannon: Oh, I mean, when I… when I started my fraud career, I mean, that was…

102
00:16:14.450 –> 00:16:26.540
Jeremy Cannon: that was a mantra, almost. You know, all friction is bad, let’s only apply friction to the top, you know, handful percentage of risky customers.

103
00:16:26.760 –> 00:16:46.199
Jeremy Cannon: And to see that 93% of people are willing to take, you know, these additional steps means… I think it gives us, as fraud practitioners, a lot more leeway, right? To… to be a little more aggressive with these… these two factors, or these step-ups, or require them all the time, and not have to worry about

104
00:16:46.640 –> 00:16:57.199
Jeremy Cannon: you know, are we gonna lose sales because of that? Are we gonna lose revenue? I mean, it’s… I think these numbers, you know, make me feel great, because some of the things that…

105
00:16:58.410 –> 00:17:00.849
Jeremy Cannon: Are in some ways easier to implement.

106
00:17:01.150 –> 00:17:16.409
Jeremy Cannon: but worried about adoption, or if people will do, means that maybe they’re on the table a little more, and hopefully these numbers will encourage some of the, you know, UX people, the finance people, to say, like, oh, this isn’t a hindrance, this is actually… looks good.

107
00:17:16.750 –> 00:17:22.480
Jeremy Cannon: I mean, I’ve heard people even say, like, they are… they are suspect when they can’t enable two-factor.

108
00:17:22.690 –> 00:17:27.319
Jeremy Cannon: You know, so, like, I think that is a big… that is a big trend and a big change.

109
00:17:27.459 –> 00:17:35.459
Brent Sleeper: Yeah, that’s really interesting, and I think, you know, as you said, when you began working in the fraud space, the idea was that

110
00:17:35.459 –> 00:17:47.629
Brent Sleeper: friction… friction is bad, period, and that you should avoid at all costs. You know, one of… one of the ideas, maybe, that… that a lot of teams are starting to think about is that, it’s really about, kind of, the right kind of friction at the right

111
00:17:47.729 –> 00:17:55.099
Brent Sleeper: At the right time, and in the right place, and so on, rather than a binary, we either do it or we don’t.

112
00:17:55.730 –> 00:18:06.039
Jeremy Cannon: Yeah, no, and I think we have some tools in our tool belt now to, like, you know, even using a tool like SIFT to say, at some threshold, require

113
00:18:06.780 –> 00:18:22.189
Jeremy Cannon: more. You know, require an authentication. You know, if they… if the score is higher, these signals are met, then we want to… we wanna step that up, and we want to make them do something, and I think… I think that’s a thing that’s changed, too, right? I think when I started, it was all or nothing.

114
00:18:22.540 –> 00:18:26.490
Jeremy Cannon: You know, you either did it or you didn’t, and now we have a little leeway to…

115
00:18:26.610 –> 00:18:29.970
Jeremy Cannon: Let our trusted customers have a little less friction.

116
00:18:30.770 –> 00:18:35.550
Jeremy Cannon: And, you know… have risky… Prove yourself.

117
00:18:35.550 –> 00:18:52.740
Brent Sleeper: Yeah, exactly right. And I think, you know, one of the data points that came out in our research this quarter is just how strongly correlated a consumer’s experience of fraud is with their actual shopping behavior. You know, in some ways, I think that

118
00:18:52.740 –> 00:18:55.610
Brent Sleeper: That is intuitive, that you… if you have… if we have a…

119
00:18:55.620 –> 00:19:02.719
Brent Sleeper: a bad experience with, you know, some kind of payment theft or other kind of compromise or account, it’s obviously going to leave a bad taste in our mouth.

120
00:19:03.690 –> 00:19:23.089
Brent Sleeper: But I was really struck by, I guess, the magnitude of these numbers. So the top chart here is talking about what consumers do, you know, after they’ve been exposed to fraud on a platform. And I’m curious, Jeremy, what you make of these responses.

121
00:19:24.120 –> 00:19:31.360
Jeremy Cannon: Yeah, I mean, 52% said they would stop using the platform, right? If we… I think if we pair that with this idea of…

122
00:19:31.400 –> 00:19:45.510
Jeremy Cannon: you know, what was it, 70, 90-some-odd percent are fine with friction, then, like, I mean, it kind of answers the question for you, like, they’re fine with friction. If they get compromised, they’re not coming back. A fraction of those are not coming back, right? So, to me, it’s…

123
00:19:45.750 –> 00:20:08.220
Jeremy Cannon: it’s almost a no-brainer, and in some ways, like, I’m surprised these numbers aren’t higher, and maybe that’s it. I’m jaded. I started as, like, a fraud ops person, which meant I had to talk to people whose accounts were compromised, and they all swore to me they were never coming back. So, in some ways, I’m, I’m shocked this number isn’t higher, but I think it proves the point if, like, revenue

124
00:20:08.420 –> 00:20:16.630
Jeremy Cannon: Is your end goal, which is all of our goals, here, you know, working for companies that Adding friction…

125
00:20:16.960 –> 00:20:22.799
Jeremy Cannon: Probably doesn’t stop anybody, but once they get compromised, once fraud happens on your platform.

126
00:20:22.920 –> 00:20:32.530
Jeremy Cannon: They, they’re gonna not stop coming, and if you look at the numbers below, it’s almost a 50-50 split between who they blame, and in a lot of cases, it’s you.

127
00:20:33.060 –> 00:20:51.440
Brent Sleeper: Yep, yep. Yeah, you know, one of the ways, sort of, as I’ve started to process some of this information myself, I’ve… I’ve started to come up with kind of one way I’ve been thinking about it is that fraud now is almost a retention problem, as much as it is a strict loss problem. That, you know, a lot of times.

128
00:20:51.450 –> 00:20:59.679
Brent Sleeper: Understandably so, fraud teams are measured on, you know, what’s the dollar value of what was lost, and what loss did they prevent.

129
00:20:59.710 –> 00:21:06.840
Brent Sleeper: But there’s a whole other aspect to this, which is what’s the, you know, potential revenue loss because a consumer never returned?

130
00:21:07.500 –> 00:21:12.760
Jeremy Cannon: Yeah, and I think that’s a… that’s a lot harder one sometimes to calculate. I’ve been in positions…

131
00:21:12.760 –> 00:21:29.479
Jeremy Cannon: Where, you know, we tried to calculate those numbers, like, if, you know, 50% of people don’t come back, what’s their average spend? But it’s, you know, in some industries, it’s really hard to tell, because as you build trust, they might come back more and more. You know, so, like, the potential of lost earnings by losing their trust.

132
00:21:29.480 –> 00:21:33.020
Jeremy Cannon: is, I think, significantly higher than adding some friction.

133
00:21:33.410 –> 00:21:43.919
Brent Sleeper: Yeah, yeah, I think that’s right. And, you know, I think, if nothing else, one of the takeaways I get from these numbers is that consumer tolerance for that friction is probably higher than we’ve maybe assumed.

134
00:21:44.020 –> 00:21:58.529
Brent Sleeper: You know, another aspect of the data in our report this quarter is looking at the relative rate of fraud among different payment mechanisms. So, you know, everything from credit card to point redemption.

135
00:21:59.400 –> 00:22:01.570
Brent Sleeper: Do these numbers, surprise you in any way?

136
00:22:02.800 –> 00:22:11.629
Jeremy Cannon: A little bit, but I think, you know, like the previous numbers, once we unpacked them a little bit, I think they sort of made sense. I mean.

137
00:22:11.780 –> 00:22:25.610
Jeremy Cannon: we were talking about ATO, and we were talking about ways to sort of look like you’re a normal user, or you’re a normal consumer, and logging in and using your points to redeem something is a very normal behavior, and I think

138
00:22:25.930 –> 00:22:29.929
Jeremy Cannon: I think a lot of us in the past have been so tied into

139
00:22:30.670 –> 00:22:45.419
Jeremy Cannon: credit cards, and those types of, like, financials that are the thing that is getting stolen, and we’ve not put as many checks, or step-ups, or those sorts of things on redeeming points, because…

140
00:22:45.860 –> 00:22:57.450
Jeremy Cannon: you know, they’re funny money in some different… in ways, they’re not… they’re not actual, like, whole cop… whole… like, cash to the consumer, but they are to your business. And if you’re redeeming that, you know.

141
00:22:57.720 –> 00:23:08.079
Jeremy Cannon: that could really lose trust again. It goes back to that trust thing, right? Like, someone stole my points, maybe I’m not interested in coming back here and collecting points again, and the whole…

142
00:23:08.640 –> 00:23:21.640
Jeremy Cannon: point of having points, I wish I would have said that better, is that, you know, you… that engagement, you… you want the people to try to gamify that system and keep coming and gathering points. Yeah.

143
00:23:21.920 –> 00:23:33.399
Jeremy Cannon: But I also think, you know, when we talk about points, it’s not just the redeeming, right? It’s the farming of points. I’ve seen… I’ve talked to customers that…

144
00:23:33.690 –> 00:23:51.859
Jeremy Cannon: you know, they work in the restaurant industry, and they have people that are, oh, you don’t have a rewards card? Cool, I’ll scan mine, right? And they’re doing that hundreds of times a day for every person that comes and checks out, and, you know, I mean, in some ways, that’s a business decision, but that is another type of fraud that could hurt your company’s bottom line.

145
00:23:52.240 –> 00:24:03.600
Brent Sleeper: Yeah, I hear that. And, you know, in some ways, this circles back to what we were talking about a few minutes ago, about things like, you know, account protection and preventing takeovers and things like that, that,

146
00:24:03.730 –> 00:24:14.340
Brent Sleeper: You know, it really isn’t enough to just look at a moment, a single moment, a transactional moment, and say, yes, either this is good or bad, but really look at what was the whole customer, you know.

147
00:24:14.460 –> 00:24:24.339
Brent Sleeper: you know, session journey like? You know, are there signals along the way that we could have picked up on? Do we protect the account? And so on. It’s, it’s all… it’s all interrelated, for sure.

148
00:24:24.790 –> 00:24:33.920
Brent Sleeper: you know, I think as alternative payment methods, you know, continue to proliferate, I have to think we’re going to see both,

149
00:24:34.450 –> 00:24:40.849
Brent Sleeper: You know, potential growth in fraud, but also novel ways of exploiting those systems.

150
00:24:41.500 –> 00:24:46.940
Jeremy Cannon: Yeah, I agree. I think, you know, another one that’s high up here is digital wallets, and I think for a long time.

151
00:24:47.090 –> 00:24:56.679
Jeremy Cannon: a lot of customers I work with and places I work, we… we considered them to be safer, right? We didn’t put the same checks in them because

152
00:24:57.040 –> 00:25:02.890
Jeremy Cannon: You know, you’ve had to add it to your phone, it’s a thing you have, it’s a… you know, but…

153
00:25:03.020 –> 00:25:03.870
Jeremy Cannon: you know.

154
00:25:03.970 –> 00:25:22.850
Jeremy Cannon: just like everything else, those things can get compromised, and you can have access to those things. You know, so I think that’s a thing we need to start thinking about, too, in the industry at large, is some of the things that maybe we thought were safer, that we gave a little more open lane to. Fraudsters are pivoting towards those types of

155
00:25:23.780 –> 00:25:25.740
Jeremy Cannon: You know, instruments to pay.

156
00:25:26.190 –> 00:25:41.119
Brent Sleeper: Yeah, I hear that, and this might be a whole other webinar in and of itself, but I think the increasing sophistication of attacks and the interconnectedness of attacks and so on really is something that we’re going to need to keep an eye on.

157
00:25:41.360 –> 00:25:50.770
Brent Sleeper: We’re just about near the end of our time, and Jeremy, first, I really wanted to thank you for your insight and the conversation today. I’ve really enjoyed this discussion.

158
00:25:51.550 –> 00:25:57.809
Jeremy Cannon: No, I had a great time, Brant. I’m happy that people showed up, and I hope that they got something from this, and…

159
00:25:58.060 –> 00:26:12.099
Jeremy Cannon: if there’s anything, you know, that more questions or anyone wants to chat with you or I, like, I recommend using our, you know, Contact Us page on our website. Like, I could talk about this stuff all day, so I’m happy to chat with anyone.

160
00:26:12.680 –> 00:26:18.819
Brent Sleeper: Excellent, thanks, Jeremy. And to everyone listening, really, thank you for your time. We’re really glad you could join us today.

161
00:26:18.870 –> 00:26:33.360
Brent Sleeper: As Jeremy said, I just want to echo it. I hope you found it useful, you know, not just for some perspective on trends that we’re seeing in our network data and the benchmarks and so on, and their effects on commerce and trust, but I hope that this helped

162
00:26:33.530 –> 00:26:41.830
Brent Sleeper: Give you some insight into where your business’s own performance both reflects great controls, you know, that you have, and also some

163
00:26:42.290 –> 00:26:47.469
Brent Sleeper: Potential opportunities for, for, for finding those hidden gaps as well.

164
00:26:47.530 –> 00:27:07.309
Brent Sleeper: I would like to invite everyone to dig in deeper by exploring the Digital Trust Index report. It’s full of data and insights, like the ones we’ve discussed today. We will follow up with you via email with a link to the report, but if you’d like to get at it right away, you can access it directly on our website, which is sif.com.

165
00:27:07.360 –> 00:27:13.839
Brent Sleeper: And with that, I would like to, again, thank you all for your time, and we hope you have a great day.