Most companies in both the online and offline world, whatever sector they are in, are exposed to financial loss at some point. The causes can be very diverse, from technological and human, to infrastructure and external events. We want to avoid it! And to do so, the best thing to do is to have a suitable operational risk management system that allows us to be prepared, to have a contingency plan and to face the inconveniences of the business.
Where do we start? Let's see what this process is all about.
When we talk about operational risk, we refer to the possibility of incurring losses due to different reasons, such as human, environmental, external or infrastructure errors, among others. These losses can pose a serious danger to the development of the company's activity and prevent the fulfilment of all its corporate objectives. We are not only talking about economic consequences, but also about the level of reputation and systems.
Therefore, the management of these operational risks is part of good e-commerce practices, a kind of process where the steps to be taken to improve decision-making and protect business assets, such as financial resources, are defined.
The most important thing when contracting an operational risk management system is to check whether it will allow us to identify, evaluate, monitor, control and mitigate problems that may arise in the business. In the case of eCommerce, it would be ideal to have the presence of the Dashboard from which to control the behaviour of the business, transactions, consumers, etc.
Risk management in e-commerce should cover everything related to fraud prevention and risk control based on scoring rules and advanced algorithms. This way, it is possible to increase business conversions while reducing risk. And don't think it's so difficult to have such a system, some providers have already developed flexible, scalable and intelligent fraud prevention modules.
Thanks to these systems, you can identify the most loyal buyers and reduce the risk of fraud. Because there's nothing like using a data-driven approach to block fraudsters with a unique management engine, while optimising the conversion.
You'll reduce your risk during payments.
E-commerce is experiencing an optimistic moment because of its growth, year after year, and especially during the Covid-19 pandemic. Lockdown has boosted online sales, and that's very good news in the middle of the nightmare we are living worldwide.
Due to this growth, many companies are already putting the focus on e-commerce to act, in some way, as online shops. However, e-commerce also comes with some risks:
In order to address these shortcomings, the first thing you need is to identify, in detail, the risks that affect or may affect your business, analyse them and take preventive measures. How are you measuring the profitability of the actions you carry out? What about the consequences of the risks affecting your business?
Think about it.
The online environment has some risks that can affect the proper functioning of e-commerce, but thanks to risk management systems, we can not only solve them, but also obtain numerous advantages:
What are you doing to control fraud in your online shop? Do you use any tools to track suspicious user behaviour?
It's time to do it.
Without a doubt, technological risks can jeopardise the integrity of e-commerce. They can be minimal or cause great consequences. From the smallest bug in a tool, to the breakdown of the main software used by the company.
In short, e-commerce uses tools to support the sales process and are essential to the life of the business. For this reason, we must have a management system that avoids these problems at all costs. The consequences could range from the loss of sales to the temporary closure of the business.
If you have any doubts or want to improve your risk management, call us.