In the world of digital commerce, data is crucial because it helps businesses identify their customers, understand their behavior, and create personalized experiences. However, digital commerce also faces a data problem that has been a headache for merchants, issuers, and consumers alike. The data “payloads” accompanying eCommerce transactions lack the information that is most useful in determining a customer’s risk profile. This lack of information makes it challenging for issuers to make informed decisions, leading to higher rates of false declines, fraud, and friction in the customer experience.
This problem is further exacerbated by the fragmented nature of the banking industry, where issuers differ in their ability to digest or use data. Risk procedures and operations are not uniform, making it even harder for merchants to work consistently with every issuing bank. Merchants need a solution that helps them decide how to package and route a specific transaction, and the industry needs “smart data models” to achieve this.
This is where Forter, an AI-powered digital commerce enablement company, enters the picture. It opens lines of communication between banks and merchants, providing relevant data and context specific to their businesses. Forter’s goal is to predict issuer behavior and route transactions in a way that maximizes their chance of success – with a positive outcome for banks, merchants, and consumers.
Optimizing transactions with AI-driven insights
Forter’s AI-powered platform helps bridge the gap between the merchant and banking sides by using advanced fraud detection technology, along with a consortium of over 9,000 merchants, banks, and payment providers.
The system analyzes a vast amount of data points, such as purchase history and location, device fingerprinting, and social media data to create a holistic view of each transaction. The platform then assigns a risk score based on the data, which issuers can use to make an informed decision about that transaction.
Unlike traditional fraud prevention systems, Forter’s platform avoids false positives, which can be frustrating for customers and result in lost revenue. Forter’s AI system enables it to scrutinize transactions and establish behavioral patterns with impressive accuracy, allowing issuers to approve or decline transactions in real-time.
Understanding Data Privacy Regulations While Conducting Transactions
As the world becomes more data-driven, concerns about privacy regulations and data governance for the banking industry continue to arise. The landscape of digital commerce is changing with regulations such as the California Consumer Privacy Act of 2018 (CCPA), the European Union’s General Data Protection Regulation (GDPR), and the data rules of individual banks. Banks are under heavy regulatory scrutiny and cannot easily adapt their data governance policies based on the specific needs of a merchant.
To navigate privacy and data governance concerns while driving transactions, Forter manages the entire process of underwriting and risk management for merchants. The company uses a proprietary machine learning system to verify customer identities, analyze behavioral patterns, and assess potential fraud risk. They can then work with banks to ensure appropriate levels of data sharing without violating data privacy laws.
Agreement on Success Metrics
As more merchants and financial entities turn to FinTechs like Forter to harmonize competing interests that share the same goal of enabling more digital commerce securely, there must be agreement on success metrics. For merchants, success may be higher conversion rates, lower fraud rates, or higher approval rates. For banks, success may be the reduction of false declines or increased efficiency in handling transactions.
Ultimately, having a clear and accurate picture of these performance metrics is key to driving better results for every party involved. Forter’s system provides real-time insights on transaction approvals, declines, and fraud rates, helping merchants and banks streamline their operations to reduce false declines and improve approval rates. This approach supports maintaining a safe and secure shopping experience for customers.
Forter is solving the data problem for digital commerce by bridging the gap between issuers and merchants, creating a more efficient and secure shopping experience for customers. Its AI-based system provides real-time insights to minimize the risk of fraud and optimize the transaction process. While navigating the privacy and data governance concerns surrounding digital commerce, Forter seeks to create a collaborative environment where merchants and issuers can work together to drive better performance and enhance the customer experience. With agreements on success metrics in place, merchants, banks, and customers can benefit from smoother, safer, and more profitable transactions.