Video: 10 Minute IT Jams - An update from Forter

Fraud continues to evolve in the digital commerce landscape. As more businesses shift online, so too do the criminals seeking to abuse systems designed to make online shopping safer and easier. Joe Lee, Vice President for Asia Pacific at Forter, a company specialising in e-commerce fraud prevention, says the risks are greater than ever - but so are the solutions.

Speaking on Terminal it Jams, Lee described the core purpose of Forter. "We support customers on their digital commerce journey so every step of the way, we make digital commerce safe and we make it a place that people can trust the transactions that they're going through," he said. "We help in two ways: we help with literally declining fraud and keeping the bad people out, and then approving the good transactions and keeping the good people in."

Forter operates by deploying automated decision-making tools powered by artificial intelligence and machine learning, drawing on a vast pool of shopper personas and identities. This approach allows Forter to not just stop bad actors, but to ensure more genuine transactions go ahead. "Unlike most other companies - this is a very unique thing we do - we have a huge amount of personas and identities that helps us make these decisions quickly," Lee explained.

The boom in digital interactions over the past few years has brought real change to the threat landscape. "Fraudsters have got a lot more sophisticated for sure - every year they are," Lee noted. He pointed to the rise in promotional and advertising abuse, where, for example, scammers exploit online discounts or rebates and then resell products on the aftermarket, damaging both company margins and customer experiences.

According to Lee, the challenge is not limited to one product or sector. "There's literally fraud in almost anywhere you go," he said. Forter's client base in Asia Pacific is particularly diverse, ranging from fast fashion and cosmetics to food delivery and even ride hailing. Notably, cosmetic companies are facing higher volumes of fraud due to the high average order value of their products, making them especially attractive targets.

Promotional abuse is one form of online fraud, but Lee emphasised that identity theft and account takeovers are growing problems as well. The surge in the use of digital wallets and buy now pay later platforms, combined with fraudsters' increasing sophistication during the pandemic, has driven a spike in account takeovers. "We saw this spike in account takeovers. It's particularly relevant when you start getting into e-wallets and you get into like the BNPL space and all these different areas where people are literally doing remittance or payments online," Lee said.

Yet, blocking fraud comes with its own challenges. Measures that are too strict can inadvertently turn away legitimate customers. "Sometimes the fraud isn't really that high or they've found a way to manage it, but what they're doing is they put something in place called 3DS or 3DS 2.0," Lee explained, referring to the security layer merchants often add to online transactions. While effective at stopping some forms of fraud, these one-time password checks can cause "a huge amount of cart abandonment".

Lee recounted a scenario where Forter conducted a quick return-on-investment analysis: "We've had scenarios where they're leaving 50 million USD GMV (Gross Merchandise Value) on the table per year because the people are not able to work through 3DS." He continued, "People don't like that. They do want to be protected, they do not want frauds, they do not want to have to call their credit card company and ask for a refund - that's a hassle. But at the same time, if somebody does not have a differentiated good and you decline them, they'll buy the goods somewhere else."

Maintaining this balance between security and customer experience is central to Forter's work. The company advises routing people through additional security checks only when necessary. "We just have to find ways to work with these committees and to work with these companies so that we can support them... but it's not like a de facto standard," Lee said.

Lee shared real-world successes to illustrate the benefits of Forter's approach. "There's a company that is doing really well across APAC... called ShopBack. They do cash rewards. They literally decrease their cart abandonment by 70% and they went on record to say that," he noted. Such results are only possible, Lee said, when fraud prevention does not come at the expense of genuine customer interactions.

He cited other well-known clients, including Adore Beauty in Australia and Accent Group, which operates brands such as Hype and Platypus. Speaking of Accent Group, Lee said, "We protect a large amount of their websites and we just stop the bad users from doing anything there and, in essence, promoting and authorising more of the good users."

Looking to the future, Forter is expanding its footprint and thought leadership. "We have our inaugural Forter conference, for like the global one. Forter turned nine years old this last year," Lee shared. The upcoming event in New York is designed to be merchant-led, bringing together some of the world's largest retailers. "It's going to be merchants talking and figuring out ways that they can help each other, how they've worked around issues like we just mentioned," he explained.

Lee also hinted at Forter's expansion into emerging markets, such as India and Indonesia, with their vast populations and unique e-commerce challenges. "I am really excited about how we've now grown into where these markets are with other very large populations," he said.

For those wanting to connect or learn more, Lee suggested visiting the company's website and LinkedIn page, especially with the upcoming conference promising fresh insights from industry leaders.

He wrapped up by expressing his enthusiasm for the Asia Pacific region and for the ongoing challenge of staying one step ahead of online fraudsters. "Hopefully we'll get to help a lot more folks in the merchant business," he said.