Are Manual Reviews Robbing You of Profits?

MINIMIZING MANUAL REVIEWS ARE MANUAL REVIEWS ROBBING YOU OF PROFITS?

eBook

eBookMINIMIZING MANUAL REVIEWS

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The “Average” Manual Review Process Causes Problems ..................................................................................3

Lost Time / Slower Growth .................................................................................................................................4

Less Flexibility / Reduced Profits .....................................................................................................................5

High Cost of “Average” Manual Review Process ...................................................................................................6

Most Manual Reviews are Unnecessary. .................................................................................................................7

Best Practices to Improve or Eliminate Manual Reviews ....................................................................................8

Better Screening / AI Plus Human Insight ......................................................................................................9

Efficiency Via Automation / Faster Answers .............................................................................................. 10

Consistent Results / Profitable Scalability .................................................................................................. 11

Optimize or Eliminate Your “Review Zone” ......................................................................................................... 12

Kount Overcomes Problems Caused by Manual Reviews ................................................................................. 13

Are Your Profits Being Hurt By Manual Reviews? .............................................................................................. 14

Manual reviews are often a last line of defense against fraud. But is your review process costing you profits? This eBook identifies ways to minimize (or even eliminate) manual reviews.



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The “Average” Manual Review Process Causes ProblemsThe inefficiencies/constraints associated with the typical “average” manual review process creates a number of issues. For online merchants—large, small, or somewhere in between—these obstacles eat up valuable time, slow order approvals, handcuff new initiatives, and exert a drag on profits.

Lost Time1Slower Growth2Less Flexibility3Reduced Profits4



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Lost TimeCompany A is a small e-commerce storefront. One of the partners in the business handles all the phone orders, customer service calls, and manual reviews. Lately, she’s been working nights and weekends. “It’s like whack-a-mole,” she complains. “Phone orders and customer service calls take so much of my time during the day that I fall behind on the manual reviews. They are really time-consuming—with the back and forth of emails and phone calls—but I can’t just let them drop.”

Slower GrowthCompany B is a medium-sized online merchant that’s growing fast. When they were smaller, manual reviews were a hassle. But now that they’re trying to expand into new markets, the burden of manual reviews is overwhelming. “We decided to be more restrictive and turn down certain types of sales,” explains their web master and fraud prevention manager. “Could we grow faster? Sure. But in this economy, we’re hesitant to hire the extra staff to manually review those additional orders.”



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Less FlexibilityCompany C is an online gaming site. Manual reviews are just not feasible for certain features, like in-game “buy/try” offers. “We could drive significantly higher sales with in-game orders,” reports their Fraud Manager. “Unfortunately, in-game transactions have much higher fraud rates, and it’s not realistic to conduct manual reviews during game play. But when we apply stricter automated rules to account for the higher fraud rates, we end up declining too many orders. It’s a lose-lose situation.”

Reduced ProfitsCompany D is a large online retailer in a highly-competitive market space. They process tens of thousands of transactions every month. “Manual reviews are a huge expense for us, but we have to do them,” says their VP of Fraud Prevention. “We can’t decline those sales and let them go to competitors. I wish there was a way to get review costs down and make our pricing more competitive...and still maintain our margins.”



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High Cost of “Average” Manual Review ProcessManual reviews are time-consuming and costly, yet their use is growing. According to a recent industry report, a record number of merchants said they were manually reviewing CNP orders in 2013:

• 8% more organizations conducting manual reviews than in prior year

• 42% of orders manually reviewed by small organizations (less than $5 million annual sales)

• 7% of orders manually reviewed by large organizations (more than $100 million annual sales)

Review agents typically account for largest portion of fraud prevention budget costs. Yet for all the additional money and effort being spent, the percentage of rejected orders was down on only slightly—2.3% in 2013 vs. 2.7% in 2012.

And for scenarios where manual reviews are not feasible—for example, in-game purchases during online gaming sessions, many merchants are simply forced to forego sales.

If your “cost-per-manual-review” does not decrease as sales grow, that means every new order actually reduces profitability. This is not a formula for long-term success.

72%24%

75%

73%

81%27%

25%

27%

% of merchants conducting manual reviews

% of orders manually reviewed

2008

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2010

2010

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2011

2012

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2013

2013



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Most Manual Reviews Are UnnecessaryMaking good customers feel bad is bad for business. You spend a lot of time and money attracting new customers. Why treat them like second-class citizens and alienate them by unnecessarily reviewing their orders?

• Delays caused by manual reviews can lead to cancelled orders

• Customers may take their business to competitors who are able to approve orders more quickly than you can

Even with all the extra time and money spent on manual reviews, the number of rejected orders remains essentially unchanged year-to-year. Why? The reality is that most manually-reviewed orders are approved:

• 75% of manually-reviewed orders are approved (average)

• 90% of manually-reviewed orders are ultimately approved by half of all merchants

2% more orders reviewed equals

over 700 extra manual reviews for an “average” online

merchant processing 100 orders/day

(based on the percentage of orders that are manually reviewed rising from 25% to 27%)

manual reviews9,855

manual reviews9,125

25% reviewed 27% reviewed



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Best Practices to Improve or Eliminate Manual ReviewsImproving your manual review process—or even eliminating it for certain transaction types—does not have to be difficult or costly. There are proven ways to help you turn a negative into a positive, without increasing fraud risks.

Better Screening1AI + Human Insight2Efficiency via Automation3Faster Answers for Agents4Consistent Results Across Agents5Profitable Scalability6



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1. Better Screening 2. AI Plus Human Insight The industry average for manual reviews is 27% of orders. But solutions with best-in-class automated screening technologies, like Kount Complete™, can reduce that number dramatically. A number of Kount customers have reduced manual reviews to below 5%, and in some cases, just 1-2% of orders. And for scenarios where manual reviews are not feasible, other Kount customers are able to successfully resolve 98%-99% of transactions without human intervention.

As data pours in faster and faster, it become harder for humans to detect patterns of fraud. Artificial Intelligence (AI) can process data at speeds far beyond human capability, exploiting in real-time the “network effect” of massive amounts of Big Data. Kount uses Artificial Intelligence to find “the needles in the haystack” so your human agents can focus their efforts on evaluating only those orders that are worthy of their time.

ProxyPiercer™

Geolocation

Cross-Merchant

Linking

AffiliateFraud Signals

REAL-TIMEANALYTICS

Multi-LayerDevice

Fingerprinting™

Persona™Technology

Mobile DeviceSignals

DynamicMonitoring

TransactionVelocity

ShoppingCart Data



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3. Efficiency Via Automation 4. Faster Answers Best-in-class-solutions automate “next steps” for evaluating suspect transactions before sending them to agents. For Kount, this involves polling 3rd party resources, checking in-house negative/positive lists, auto-emailing/texting confirmation messages to customers, etc. By automatically applying additional screening processes before intervention by a human agent, the cost of manual reviews are dramatically reduced.

When a transaction goes to an agent, best-in-class solutions like Kount present all information on a single screen and integrate this information with the entire system, so that agents can evaluate all available variables in full context. In addition, Kount can automatically prioritize the most important/urgent transactions so that they are processed first by review agents (for example, based on “time in queue”).



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5. Consistent Results 6. Profitable ScalabilityYour manual review system is only as strong as your most inexperienced agent. That’s why best-in-class solutions such as Kount employ rules-based review systems, putting every reviewer on the same level as your best reviewer. In addition, Kount makes it easy to route transactions for review to the most appropriate agent, for example, Spanish-language orders to Spanish-speaking agents.

By employing a fraud prevention solution like Kount that reduces the number of manual reviews while also reducing the time that agents spend on each review, you can grow without getting dragged down by manual reviews. Bottom line? You can confidently scale sales volume using Kount without worrying about overhead getting out of control. In fact, you’ll see profit margins increasing as your sales grow.



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Optimize or Eliminate Your “Review Zone” Achieve precise control. The Kount Risk Score quantifies the likelihood of an order being fraudulent. Because you can precisely define which Kount Risk Scores automatically get approved or declined, as well as the range of Risk Scores that require manual reviews (Review Zone), you control exactly how many manual

reviews you’ll undertake. Using actual customer transaction data, you can precisely adjust your Review Zone so that the revenue generated by borderline orders consistently exceeds the costs to manually review or decline those borderline orders. You can even set rules to eliminate manual reviews entirely.

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APPROVE DECLINEREVIEWZONE

Kount makes it easy to adjust how many orders should be manually reviewed and still maintain profit margins

Order Volume

Kount Score



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Kount Overcomes Problems Caused by Manual ReviewsCapitalize on Kount’s best practices to minimize/eliminate manual reviews. Reduce the time and money you spend on manual reviews, while growing sales, reducing fraud losses, and increasing profitability.

AFTER KOUNT

Systematic, rules-based process delivers higher, uniform standards for all reviewers.

Automated reporting shows up-to-the-minute performance of every agent.

All data organized on a single screen within the primary fraud management system for rapid, intuitive resolution.

5% of orders manually reviewed, with the option to eliminate manual reviews entirely for certain transaction types.

Resolution as fast as 30 seconds.

Highly-scalable system actually improves profitability as sales volume increases.

BEFORE KOUNT

Quality of manual review dependent upon skills and training of the individual agent.

Manual, ad hoc reporting makes it difficult to identify problem areas or struggling agents.

Review information scattered across disparate systems, requiring agents to manually aggregate resources.

27% of orders manually reviewed (industry average).

Minutes/hours to resolve manual reviews.

Labor-intensive process does not scale efficiently, hurting profitability. More Time

Scalable Growth

Maximum Flexibility

Higher Profits



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In just 30 minutes, we’ll show you how other merchants have reduced and/or eliminated manual reviews, while still reducing fraud rates as sales have grown.

About Kount Merchants using Kount can accept more orders from more people in more places than ever before. For each transaction, Kount’s “decisioning” engine analyzes hundreds of relevant variables and activity across the globe in real-time, providing the most accurate fraud prediction available. While reducing the risk of fraudulent activity, Kount’s intuitive business intelligence tools help merchants increase revenue opportunities in the future, thus boosting sales while reducing fraud. Kount is a single, turnkey fraud solution that is easy-to-implement and easy-to-use.

Are Your Profits Being Hurt By Manual Reviews?

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Are Manual Reviews Robbing You of Profits?