Protect your online marketplace with a risk-based approach

One bad actor can sow mistrust, commit fraud and damage an online marketplace’s reputation.

But how do marketplaces strike the balance between limiting risky accounts and avoiding heavy-handed security controls? People expect a welcoming online destination that delivers trust and safety, but they don’t want a cumbersome, time-consuming onboarding experience.

The right strategies and tools can help marketplaces meet customer expectations while controlling risk.

Know your audience

Understanding your audience is crucial in creating a strategy that minimizes risk and optimizes performance. What countries are your customers in? What is the average transaction price? How many transactions do vendors conduct?

Answering those questions and determining the associated risks are the first steps in deploying a risk-based approach (RBA). Financial services companies have long used RBAs to mitigate fraud, risk and financial crime. It’s a powerful model for online marketplaces to adopt.

It’s not one strategy, but rather a holistic approach that adapts risk controls to fit a given situation. For example, a vendor selling used home goods is not the same as someone selling expensive watches.

Key business strategies around acceptable use, terms and conditions, monitoring and enforcement, data protection, and operating procedures factor in to an RBA. But the approach offers flexibility for fine-tuning based on marketplace sector, customer or vendor. That refinement allows marketplaces to better match risk controls with the situation.

With the right technology stack, the RBA can adapt to the marketplace’s changing needs.

Creating a trusted platform

Marketplaces can create trusted platforms by applying tools that quickly share and analyze customer and vendor data. Through data analysis, patterns emerge that help uncover bad actors and highlight trusted parties.

Building trust in a marketplace starts during onboarding. Vetting customers and vendors at the start helps verify legitimacy before they engage with the platform.

Vetting might sound simple, but digitally verifying a person or business can be complex, especially with a global audience transacting in a borderless economy. Verification includes:

• Determining the most effective data points and analyses
• Integrating with different data, access requirements, system protocols, data use rules, information formats and other variables
• Securing access to hundreds of data sources to verify identities online
• Complying with privacy and data regulations, which require strict security protocols, differ around the world and change regularly

In the competitive marketplace environment, fast, low-friction vetting can provide a competitive edge. First impressions are crucial, and slow, complicated customer and vendor onboarding can lead to frustration and onboarding abandonment.

Building a robust, trusted global platform requires sophisticated data, technology and expertise to foster confidence for everyone. Identity verification that quickly, accurately and compliantly vets vendors and customers can play a significant role in marketplace success.

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