How brand reputation is taking the fall for scams and what businesses can do about it

The rapid rise of scams in the last year is an unchecked problem. Even if customers are not deceived by the scam, their reactions to these messages are varied. Anger, irritation, and worry are all normal emotional reactions to fraudulent communication. All of which are aimed at the company that the bad actor is impersonating.

As a result, 49.8 percent of customers in the MENA region have lost trust in the company in question.

Customers ask that the organisations they do business with protects them, their data, and their finances. And companies are not doing that if they authenticate customers in the same channels used by malicious actors.

Customer pain points and challenges

Many customers who receive a scam message don’t report it to their bank, the company whose name was used, the police, or anyone else.

The lack of clarity about what the recipient of such messages should do about it does little to alleviate their frustrations. As a result, the scale of scam messaging and victims is likely to be underestimated, as approximately 41 percent of consumers in the region do not report these messages.

It is essential to remember that fraud is not a victimless crime. Fraud has a significant impact on consumers who are caught up in it – and not just financially.

Embarrassment and even fear all play a part in the failure to report scams.

It’s also important not to overlook the psychological consequences of fraud. Embarrassment and even fear all play a part in the failure to report scams. After receiving a message, about a third of people regionally indicated they felt vulnerable, with more than a third expressing anger.

Understanding the impact on businesses

In the UAE, 57 percent of consumers believe their bank is responsible for protecting them against these scams and 36 percent of people think that the corporation whose name the fraudster used is responsible for preventing scams.

More concerning is, about half (49.8 percent) of consumers in the MENA region simply lose trust in an organisation if it’s related to a scam message. Moreover, almost one-fifth of consumers regionally who have been scammed stopped dealing with company impersonated in the fraudulent incident.

However, a smaller percentage of consumers are likely to abandon the channel the communication was executed from. So, regardless of the fraud tactic used, the original brand suffers from the loss of customers.

According to our research, almost half of consumers (48 percent) in the region believe that identity is the issue, and that people should prove their identity when signing up to use a platform or services to prevent fraud. These customer concerns highlight the need for digital identitification to be addressed by businesses.

In the UAE, 57 percent of consumers believe their bank is responsible for protecting them against these scams.

When it comes to establishing digital trust, the channels via which customers are communicated to must be secure and straightforward to use.

Currently, businesses are using the same channels to authenticate customers that bad actors are using to commit fraud – only 8 percent of MENA consumers believe SMS is a secure method of communication. It’s no surprise that trust is deteriorating from all sides.

Because of the way things stand, customer loyalty has never been more fragile. Customer acquisition and retention are time-consuming and costly, and all that effort can be undone by a single fraudulent message.

Positive identification – the way forward

The bad actors are not fool proof and will move on to weaker targets if they can’t get beyond authentication measures and scam prevention technologies. And it’s technologies such as next-generation behavioral biometrics that present these bad actors with these impossible tasks.

Behavioral biometrics are tailored to each user’s unique inherence characteristics – how they type, or swipe their device, even how they hold it. Thus, even the most determined bad actor will give up long before they get close to acquiring access.

AI-driven ensembling can use machine learning to recognise a genuine user passively.

Moreover, AI-driven ensembling can use machine learning to recognise a genuine user passively, even if they’re using a different device or in another location. This happens when data which is collected from thousands of data points across device, locations, behavior, and any third-party systems are passively analysed.

Additionally, because malicious actors monopolise open channels like SMS and email, these channels can’t be depended on to verify identification. Businesses must therefore re-evaluate the communication channels they use to communicate with their customers.

Overall, as they increasingly interact with their customers online, businesses must realise that digital trust is basic, if not the most critical component for every organisation. Trust is underpinned by digital identity and digital identity must be at the heart of all digital transactions to re-establish digital trust.

Saeed Ahmad, managing director, Middle East and North Africa, Callsign.