Cyber Monday Hits Record Online Application Volumes: What this Means for Fraud Risk Managers

by Ken Meiser

Ken Meiser

In our last post, we reported that on Black Friday in-store and online consumers shopped earlier in the day posting record breaking sales, which likely resulted in credit, loan and service application volumes also peaking earlier in the day. We also forecast that online credit application volumes were going to reign supreme over in-store applications on Cyber Monday. This was in-line with those who predicted record mobile and online sales for 2017.1 Did these predictions come true? What did we learn from a fraud risk perspective?

ID Analytics examined application data in the ID Network® over the Black Friday weekend (November 24-27, 2017) and compared the results to previous findings from October 2017 to November 2017. We saw a 29% increase in credit, loan and service application volumes from the bank card, retail card, wireless and online lending industries from October to November. Not surprisingly, most of those applications were generated by retailers (both online and in-store) with a 3.6x spike on Black Friday and 1.6x increase on Cyber Monday (see Figure 1).2

Figure 1

Figure 1. ID Analytics Black Friday weekend credit, loan and service application data analysis 2017.

We can hypothesize that the shift in credit applications peaking earlier this year could be due to an increase in online shoppers—for one ID Analytics customer 17% of Black Friday retail card applications were completed online, which is a 55% increase from what ID Analytics’ data revealed for Black Friday 2015.

What do these Black Friday through Cyber Monday spikes in online retail credit application volumes tell us about fraud risk?

Using ID Score®, our fraud risk analysis solution, ID Analytics examined levels of fraud risk on Black Friday across channels and discovered that retailers saw potential increased fraud risk through the online channel. Risk was measured by the number of applicants with an ID Score of 900 or greater (this score signifies applicants who are likely to be extremely risky). The percentage of applicants that fell into this score range was 2x higher for online applicants than in-store applicants.3

In the end, predictions rang true. Cyber Monday 2017 officially earned the title of the largest online shopping day in U.S. history reaching $6.59 billion, according to Adobe Insights.4 Mobile shopping also hit a record high $2 billion.5 Likewise, when ID Analytics looked at the online retail credit application volumes for one of our customers, Cyber Monday saw a 51% increase in the number of online applicants overall and a whopping 134% increase in online applicants when compared to Black Friday.6

As credit application volumes, and potential risk, continue to increase via online channels, enterprises need to ensure their fraud management strategies are equipped for these spikes. For more information, visit our fraud risk management page or download our webinar “Protecting the Peak: Fraud Strategies for Peak Retail Days.”

 

1. Forbes, https://www.forbes.com/sites/deborahweinswig/2017/10/27/2017-black-friday-and-cyber-monday-predictions/#1ede067a5f14 (accessed December 12, 2017)

2. 2017 Black Friday weekend credit, loan and service application data analysis, ID Analytics

3. Ibid.

4. CNBC, https://www.cnbc.com/2017/11/28/a-record-6-point-59-billion-spent-online-on-cyber-monday-making-us-history.html (accessed December 12, 2017)

5. Ibid.

6. Ibid 2.