We often hear about operational risks in business, but what exactly are they? How do they affect eCommerce? What can we do to manage them correctly?
That’s what this post is all about. You’ll find out as we move forward because first of all, we want to tell you what operational risks are and which ones can affect your business. We will give you a hint; they derive from the decisions you often make within the business, day after day, week after week. About products, distribution, pricing, payment methods, etc. Whatever your business, operational risk will always be present, but the quality of its management is only up to you.
How to prevent it? Do you have an action plan? Discover the best operational risk management with PayXpert!
What is operational risk and how to manage it?
It is the possibility of financial losses caused by errors or inadequacies in processes, systems, technology, people, etc. In this context, talking about PayXpert is no coincidence, as this payment method provider has different alternatives and a consolidated team to help eCommerce to manage operational risk and reduce potential failures in the system
We are talking about financial risk, but also legal risk. Any handicap that may cause losses due to human, technological or external reasons, such as accidents or natural disasters, should be considered. But how to reduce them?
How and why reduce human and financial errors in your eCommerce?
It’s very likely that if you manage your online store website, reducing fraud is one of your priorities. Having the means to combat it is almost a must, because you want to offer the best possible frictionless customer experience. Right?
Throughout the crisis caused by the Covid-19 pandemic, we have seen an increase in eCommerce fraud. It’s time to put the brakes on, gather your courage, put up barriers and put a stop to it. Here are some tips on how to do it:
- Optimise your finances with a financial partner. At PayXpert, we have a team committed to helping you better understand your business finances. To do this, we have tools that will help you transform your business data into valuable and easy-to-read information. Transform numbers into efficient decisions!
- Use big data to manage risks. The struggle to reduce fraud and improve operational risk management increasingly relies on the proper handling and interpretation of data. After all, data is at the heart of any business. To do this, we have a Dashboard that is unrivalled in the sector, from which you can have an overview of payment transactions and track user behaviour.
- Create a good strategy. Have you ever heard of A/B testing? It is nothing more than comparing the effectiveness of two different strategies that have been created to solve the same problem. For example, two payment gateways to reduce fraud and manage risk.
With all these tasks, we help you accurately measure the extent to which fraud affects your business. Shall we get started?
Manage the operational risk of your online business with PayXpert
Today, it is considered to be the greatest impact on business. Having an operational risk management system in place is essential, including procedures, information systems, documentation and policies, among other things.
Operational risk management seeks to improve internal methods and relations with the environment. And that’s how we do it at PayXpert.
Fraud scoring, velocity checks, consistency checks. These are the means we use to prevent fraud and control risk based on scoring rules and advanced algorithms. Best of all, you can keep increasing conversions while reducing risk. Because that’s the goal of our intelligent, scalable and flexible fraud prevention module.
We are involved in execution and process management, as this is where most management errors occur. The capture of transactions, the documentation provided by the customer, their accounts, payments made, etc., is information that needs to be evaluated to determine whether or not operational risks exist.
Our payment gateway and data management tools provide maximum security. It’s important to know that advanced payment processing solutions like ours optimise eCommerce billing.
Types of risk in eCommerce
Do you know the main risks faced by eCommerce sellers? Considering that we live in a hyperconnected world, taking care of all the details to make your business and customers feel secure is more important than ever.
To do this, you need to know the main risks affecting your online store:
- Friendly frauds. They are so called because the fraudulent customer declares the purchase as fraudulent at the bank, despite the fact that it was intentional. First, he makes the purchase. Afterwards, it is returned to the eCommerce. The goal is to keep the product without incurring any cost.
- Identity theft. It means to impersonate someone else, taking on their identity to others. Some eCommerce customers use it to get credit card numbers, passwords, or usernames.
- Phishing. Preventing it is one of the biggest challenges for businesses. The scammer tricks the user through spam and uses a seemingly trustworthy banking page. It’s a trap!
- Account takeover. A customer’s information is extracted and his account is taken over. To do this, their address, telephone number, etc. are changed
Don’t think that these are the only risks eCommerce faces. Operational risk ranges from internal fraud (theft, bribery, non-compliance with regulations), external fraud (caused by the actions of outsiders), technological failures (with the software of the company, for example), to security and process execution.
Are you ready to deal with operational risk management? We are waiting for you!
