How can online retailers keep cybercriminals at bay without making loyal shoppers jump through hoops to make a purchase?

According to Government figures, cybercrime costs UK retailers £27 billion each year, and can also irreparably damage a reputation.

However, the increasingly stringent validation requirements businesses are implementing to their website checkouts are leading genuine customers to abandon their purchases.

Customer authentication is a complex matter for ecommerce retailers.

On the one hand, the rising number of sophisticated security attacks make a robust fraud detection system more important than ever.

On the other, there’s a fine line between protecting your customers and turning transactions into the online shopping equivalent of Fort Knox.

Second level authentication systems such as 3DSecure can often prove burdensome to consumers, leading them to become frustrated and abandon baskets at the final point in the purchasing journey.

However, there are opportunities for retailers to update their fraud detection systems without driving away valid business.

Secure customer accounts

Many ecommerce fraud breaches begin with hackers stealing genuine customers’ account credentials. Common types of attack include phishing, man-in-the-browser and Trojans.

By securing customer accounts, retailers can detect not only logins from accounts being used to commit fraud, but pick up automated logins from bots and compromised devices. They can also highlight login attempts from unrecognised devices and suspicious locations.

Embrace multi-factor authentication

Switching to a security system that requires several independent credentials enables retailers to positively identify shoppers when they access an account. Through this they can discover suspicious login request patterns or unauthorised password sharing, while the customer only has to sign on once.

Moving to context-based authentication and persona recognition provides real-time fraud defence. It also has the added value of protecting customer accounts without inconveniencing them at the checkout.

Be mindful of mobile

One of the biggest authentication challenges presented to retailers today is m-commerce. Loyal customers may not be recognised when logging on from new devices, but equally there is more opportunity for cybercriminals to infiltrate mobile payment gateways.

In order to limit fraud losses, retailers need to implement a fraud detection solution that identifies account takeover attempts coming from mobile channels. This can be done by detecting suspicious device configurations or pinpointing devices disguising their geolocation.

Use a single fraud prevention solution

Deploying a single solution enhances online fraud prevention as it gives retailers the opportunity to secure all applications centrally.

Not only that, but sophisticated platforms will examine shopper behaviour to identify uncharacteristic activities at the same time as profiling general devices and identity threats.

In addition to creating a comprehensive fraud defence system, controlling data threats from a single source empowers retail businesses to analyse combined findings. From there, they can identify areas where improvements can be made to network security, in order to optimise consumer experiences.

By embracing context-based authentication from a centrally controlled platform, retailers have the power to reduce fraud losses by 50% and decrease ‘false positives’ – genuine customers being identified as cybercriminals – by 70%.

Not only that, but maintaining a frictionless consumer experience in the process can bring down cart abandonment rates by 50%.