Most global e-commerce merchants are planning to hire new fraud specialists this year after being swamped with scams over the past 12 months, according to Ravelin.
The anti-fraud vendor polled 1900 global fraud professionals working for businesses with over $50m in annual revenue to compile its Global Fraud Trends 2023 study.
It revealed that 59% recorded a rise in online payment fraud, while just over half (51%) said the same about account takeovers.
A similar share pointed to a surge in promotion abuse (52%) and refund abuse (53%), while 40% claimed to have experienced an increase in customer or friendly fraud. Over half (52%) of UK respondents said friendly fraud had increased.
Read more on e-commerce fraud: Global E-Commerce Fraud to Top $25bn by 2024
As a result of these trends, most online merchants in the UK (58%), Germany (80%), the US (72%) and Australia (86%) are planning to grow their fraud teams this year, Ravelin claimed.
When it comes to technology investments, machine learning-powered tools and two-factor authentication (2FA) are particularly popular. Almost half (48%) of UK businesses acknowledged that machine learning is one of the most effective tools they have, while three-quarters merchants said the same about 2FA.
Machine learning algorithms can be trained to observe “normal” transaction patterns so they are better able to spot the trends human eyes might miss, which could indicate suspicious activity. They also have the advantage of working 24/7/365, taking the pressure off human teams, which are used to investigate suspicious activity flagged by their machines.
However, Ravelin warned that businesses may be setting themselves up for a fall as most use in-house solutions, which it claimed are expensive to maintain and difficult to scale.
“Businesses need to get on the front foot managing fraud: using automation to nip fraudulent transactions in the bud,” argued Ravelin CEO, Martin Sweeney.
“Better automation helps teams scale and frees up fraud investigators from mundane tasks enabling them to focus on informing product development, identifying other sources of profit erosion, and other more important strategic tasks that drive growth. With the economy in an uncertain place, enabling growth must become the priority.”