Experian’s ‘Combined Blows’ Against E-Commerce Fraud Promotes the Healthy Development of the Platform Economy
In China, the internet platform economy is both an emerging form of productivity organisation and a new driver for economic development. On August 8, the General Office of the State Council issued guidelines on promoting the healthy development of the platform economy. It said that the prominent issues hindering the platform economy’s development should be tackled with concentrated efforts. To promote an orderly and healthy development for platform economy, policy guidance, support and guarantee should be intensified according to the law of economy and trends.
As a typical representative of the platform economy, e-commerce’s orderly and healthy development plays an important role in many aspects, including optimising resource allocation, boosting all enterprises’ cross-border and mutual development, encouraging mass entrepreneurship and innovation, promoting industrial upgrading, expanding consumer market, and, especially, increasing employment.
Platform Economy Sweeps Across the Globe with Great Potential in Hong Kong and Taiwan E-commerce Markets
The global e-commerce market experienced strong growth in 2018. According to the E-COMMERCE IN CHINA 2018, a report released by the Department of Electronic Commerce and Informatisation of the Ministry of Commerce of the People’s Republic of China in May 2019, the global online retail turnover was $2.8 trillion with a year-on-year growth of 23.3 percent. Comparatively, the global retail turnover in 2018 was $23.9 trillion and the global online retail turnover rose from 10.2 percent in 2017 to 11.9 percent in 2018. Online retail has gradually become an important channel for global consumption, and the platform economy represented by e-commerce is sweeping across the globe, driving an irreversible globalisation trend.
According to the National Bureau of Statistics of China, China e-commerce turnover reached 31.63 trillion yuan (about $4.72 trillion) in 2018, and online retail sales surpassed 9 trillion yuan with a year-on-year growth of 23.9 percent. As a result, China remains the biggest online retail market in the world. Regionally, e-commerce plays an important role in Hong Kong’s economy. Statista estimates that e-commerce alone will generate $4,800 million (about 32.2 billion yuan) worth of revenue in Hong Kong in 2019. That figure will increase with a compound annual growth rate of 7.4 percent from 2019 to 2023, and the market size will reach $6,400 million (about 43 billion yuan) in 2023. The e-commerce industry has enormous potential over the next four years.
Meanwhile, Taiwan’s e-commerce market has grown rapidly in recent years, with users showing strong online consumption power. Data shows that by February 2018, Taiwan e-commerce industry saw an average annual growth rate of 7.4 percent in the past seven years, while the overall retail industry’s annual growth rate is only 1.9 percent. Market research institute eMarketer anticipates that Taiwan’s e-commerce will be able to maintain a 7 percent annual growth from 2018 to 2022, indicating there is still considerable room for growth and development in Taiwan’s e-commerce market.
Chaos Behind Prosperity: Frequent E-commerce Fraud Leaves Consumers in Urgent Need of a Safe Market Environment
As e-commerce and mobile payment have become increasingly convenient, new fraudulent means are also emerging. According to a global e-commerce fraud report released by Pymnts.com in October 2017, e-commerce fraud would cause a $58 billion loss in 2017. The “Underground Industry” behind e-commerce fraud is widespread, affecting numerous links of e-commerce, including account registration, identity fraud, advertising and traffic diversion, and loan payments.
According to the latest 2019 Global Identity and Fraud Report released by Experian, more than 2 in 5 consumers worldwide have already experienced a fraudulent event online at some point in their lives, with the highest incidence occurring in the United States and the lowest in the Europe, Middle East and Africa region. Even the marketplace that is most effective in mitigating online fraud has potentially left a full third of its digital customers vulnerable.
According to Experian’s 2019 Global Identity and Fraud Report (Asia-Pacific Edition), shopping online for goods and services is the most cited online activity. Fifty percent of businesses surveyed in the Asia-Pacific region reported an increase in fraud losses over the past 12 months from account originations and account takeovers – both potentially damaging to brand reputation. This is slightly lower than the global average of 55 percent. Over the past 12 months, 16 percent of consumers in China reported fraudulent incidents with electronic/mobile commerce marketplaces, compared with 8 percent in Hong Kong. Consumer confidence in businesses’ ability to safely confirm their online identity is moderate. Only 42 percent of consumers indicated that they have complete or very high confidence, with consumers in Hong Kong and Japan expressing the least confidence – 21 percent and 13 percent respectively – with Hong Kong consumers significantly more hesitant to share personal data.
Experian’s Products and Services Act as “Combined Blows” Against E-commerce Fraud, Safeguarding the Healthy Development of the Platform Economy
As a leading global information services company, Experian is committed to helping businesses combat fraud with new data and analytical tools. It has invested significantly in optimising existing anti-fraud solutions and enabling automated decisioning to successfully identify varied online fraud in an increasingly competitive market and win customers’ trust. Among Experian’s products and services, solutions like FraudNet, Hunter and CrossCore™ can help prevent fraud and provide real-time fraud prevention advice in every stage of a customer’s lifecycle, including account application and opening, identity theft and transaction fraud, offering consumers and businesses across all industries multi-protection against e-commerce fraud.
With the increasing frequency of e-commerce transactions, fraudsters and gangs are constantly updating and evolving their tricks. Online fraud works to exploit the weak links and loopholes of digitalisation, while remaining hidden. These organisations often disguise themselves as most valuable customers before jeopardizing legal accounts. To catch a criminal, you have to think like one.
Considering this, Experian developed FraudNet, a fraud detection solution that quickly tracks trusted customers. It is specially designed for banks, retailers, financial institutions or any businesses dependent on digital channels for customer acquisition and transactions. FraudNet recognises consumers through understanding their digital device interactions across multiple channels. As a scalable, risk assessment and intervention solution, it identifies every device visiting to highlight fraud indicators including inconsistencies and transaction volume and velocity from a single device. As such, FraudNet is cost-effective for reducing fraud and allowing legitimate transactions.
For any organisation that deals with application fraud data across multiple channels, Hunter, another solution developed by Experian, can protect customers against fraudsters and identity theft. The first and best strategy to reduce fraud losses is prevention, identifying and stopping fraudsters at the point of application. Using proven detection rules, Hunter screens for, and highlights potentially fraudulent applications, enabling fraudsters to be stropped before they become a customer, increasing fraud savings and assisting in management and control of bad debt.
Experian also designed CrossCore™, the first smart, open, plug-and-play platform for fraud and identity services to help businesses cope with the ever-changing, complex and challenging world of fraud prevention. It combines API with powerful workflow and decisioning functions while supporting a best-in-class approach to managing a portfolio of services that work together in any combination — including Experian solutions, third-party services and client systems. CrossCore™ allows you to connect, access, and orchestrate decisions across multiple systems more effectively with an open platform, delivering both visibility and agility.
As fraud has become increasingly frequent, Experian is committed to deploying advanced technology and providing solutions for businesses. While protecting consumer’s information security, Experian can reduce misjudgment rate, improve customer experience and increase turnover for clients. Compared with its peers, most of whom adopt third-party solutions, Experian can self-develop technology with local teams to provide customised real-time services. Besides, thanks to its strong research and development ability and rich international experiences accumulated in the industry, Experian can effectively update its technologies and products according to changes in fraud. While expanding its business in the Chinese market, Experian is making constant efforts in accelerating Chinese e-commerce industry’s transformation to the path of high-quality development. Together with China’s e-commerce industry, Experian is committed to further safeguarding and promoting the development quality of China’s platform economy.
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