Loyalty and fraud. Not a nice pairing. Loyalty is great for business, fraud taxes it with ongoing losses. Yet the two have become inseparable in the past two decades, with fraudsters banking on loyalty points, miles and rewards and using them for their own profit.
Loyalty programs can be costly to implement, but they can also achieve great business results. According to a Bond Brand Loyalty report, 77 percent of consumers stick with the brands they are members of. On the flip side, fraudsters use and abuse loyalty programs as a form of currency exchange among themselves, with losses amounting to an estimated $1 billion every year. This estimate is likely rather conservative, considering the size of recent data breaches in the hospitality sphere and the estimate that more than $100 billion a year in reward points are not being redeemed because more than half of reward memberships in the U.S. are inactive, which makes loyalty accounts a rife source of profit for criminals.
But while the value of airline loyalty programs and the customers they serve is well-established, protecting these assets in terms of security controls is often an afterthought. Loyalty program systems are rarely considered as crown jewels, while in reality, the customer data they collect and use is beyond doubt some of the most important and a critical part of the business’s livelihood. When lost in attacks, customers’ personal and financial data results in fines, lawsuits and elevated breach remediation costs that ..
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