E-commerce frauds and the role of fraud detection tools in managing the risks associated with the frauds

Driven by multiple drivers, a traditionally cash based society of India is adopting digital payments at an unprecedented speed and scale. This rapid adoption has in its wake, lead to increase in the types and scale of frauds. While building business around the digital technology, companies need to proactively address the need for identification and prevention of frauds. Given the scale of transactions and the sped at which transactions get completed, mere human intervention will be futile in overcoming the looming threats of frauds. The desired objective can only be achieved by deployment of the right tools for fraud identification and tools. Formulating the right processes, specific to the sector or nature of business operations, identification of the right tool for the purpose and taking advantage of technological developments like in memory computing, collaboration across businesses, big data analysis, machine learning etc., are the key factors to consider while formulating effective fraud detection/prevention strategies. Current fraud detection techniques, however, are far from accurate, can result in significant financial loses, inconvenience and dissatisfaction to customers. In this article an attempt has been made to find the technologies to address the fraud and steps of adopting the fraud detection and prevention technology. The objectives of the research paper are to find types of e-Commerce frauds and to develop the mechanism (process) and technologies used in detection and prevention of frauds in consumer transaction. © 2020 SERSC.