Category: Brandpoint Business & Finance

2022-09-20T09:01:00

(BPT) – Successful small businesses are the ones that remain adaptable, forward-thinking, and leverage the right resources. As we enter the fall, there’s never been a better time to explore new opportunities to take your business to the next level. Read on for a few expert tips on how to help your business venture grow.

Optimize tools to track and maximize your spending

No matter how big or small, every business owner knows they will have to spend money to make a profit. It’s important to budget for and diligently track every expense to prevent overspending. Whether it’s for travel, paying a vendor, or purchasing supplies or inventory, these expenses should be recorded and tracked. One of the best ways to do this is by acquiring a business credit card.

A business rewards card allows you to organize your expenses and earn rewards by accumulating redeemable points that can be used in the future toward travel costs. In addition, every business credit card comes with its own perks and opportunities for Cardmembers to earn more rewards. For example, new Southwest^® Rapid Rewards^® Performance Business Credit Cardmembers can earn 80,000 Rapid Rewards points after spending $5,000 on purchases in the first three months from account opening and 9,000 anniversary bonus points each Cardmember anniversary year.

Be resourceful

Successful small business owners know which tools are worth incorporating into their businesses to save time (and money!). Various tools are available to help provide accounting, invoicing, and payroll services for a fraction of the cost of outsourcing the work. Others can help you build and schedule your social calendar to get the word out about your business with ease. Many of these services even offer a 30-day free trial for users to familiarize themselves with the platform and decide if they want to continue using it.

Some business credit cards even offer opportunities to earn on purchases for your business. For example, Southwest Rapid Rewards Performance Business Credit Cardmembers earn 2 points per dollar spent on social media and search engine advertising, internet, cable, and phone services.

Grow your network

Every person that you meet in a professional setting has the potential to be a customer, partner or advisor. In a world that revolves around social media, joining Facebook and LinkedIn groups that are relevant to your industry is one of the easiest ways to start building your network.

When possible, also try to identify conferences or in-person meet-ups that can connect you with other like-minded professionals or potential clients. Purchasing travel with the right credit card, like the Southwest Rapid Rewards Performance Business Credit Card, can help you maximize every trip for points toward future travel.

For example, Southwest Rapid Rewards Performance Business Credit Cardmembers can earn 4 points per $1 spent on Southwest Airlines^® purchases; 3 points per $1 on Rapid Rewards hotel and car rental partner purchases; 2 points per $1 spent on local transit and commuting purchases, including rideshare services, tolls, parking lots, and parking garages. Cardmembers can also enjoy the benefit of up to $100 statement credit every 4 years for Global Entry or TSA Pre-Check and can travel more comfortably and efficiently thanks to perks like 4 Upgraded Boardings every year, when available.

As a small business owner, it can sometimes feel intimidating to incorporate new tools or strategies — but many are quick to implement and can save time and money in the long run. Now is a great time to take stock of your business and assess where some of these tips can make an impact.

Accounts subject to credit approval. Restrictions and limitations apply. Offer subject to change. Cards are issued by JPMorgan Chase Bank, N.A. Member FDIC.

2022-09-20T11:47:00

(BPT) – By Kevin Bearley, Next Gen business strategist at Pinion, formerly KCoe Isom

You’ve worked hard to build your business, pouring your heart and soul into its success. You’ve had to tackle complex problems and sometimes make tough decisions. It’s not always clear which choices are best when running a business, but there is one thing you know for sure: thoughtful planning always pays off.

The same is true when it comes to the legacy of your business.

Whether you are a few years or a few decades away from stepping down, it’s essential to plan ahead. You want to leave your business on your terms and achieve the outcomes you desire, which is why succession planning shouldn’t be delayed. A formal exit strategy ensures your wishes are followed, whether that be family transfer, sale, employee buyout or another path.

You may have thought about succession planning, but because you’re busy, you’ve put it off or simply don’t know where to begin. You are not alone. More than 70% of business owners fail to put a strategic, written plan into place.

The truth is no one knows when the day will come that they can no longer run their business. Delaying the critical task of succession planning typically leaves the burden to the family, who may be unprepared and therefore make uninformed decisions that impact the business and your legacy. Essentially, if you fail to plan, you plan to fail.

At Pinion, we have seen firsthand the costly damage caused by lack of planning, including undervaluing assets, misappropriating funds and excessive tax implications. These are all examples of costly financial implications, but what can be even more devastating can’t be boiled down to a number, such as when brand reputations are damaged, employee relations are diminished and family trust is destroyed.

Succession planning is primarily for when you plan to exit the business, but it can be an important legal tool at any time. One of the most memorable moments of my career was advocating for a $30 million family business serving as an expert witness in a case stopping the former son-in-law from taking a large share of family assets. The judge ruled in favor of the family because of the particularly clear terms in the succession-plan strategy the family created.

Planning now matters

2022-09-20T08:01:00

(BPT) – By Jay West, Executive Director of the Performance Fluoropolymer Partnership

News stories about per- and polyfluoroalkyl substance (PFAS) in drinking water and consumer products have raised a lot of questions about this diverse group of chemistries. One thing that’s often overlooked in the discussion of PFAS is the fact that all PFAS are not the same.

Take fluoropolymers, for example: highly specialized polymers that play a critical role in American industries, including semiconductors, medical devices, automobiles and renewable energy production. Despite their contribution to vital technologies and American competitiveness, some interests are pushing to ban the use of all PFAS, including fluoropolymers, regardless of whether equally safe and equally performing options are actually available.

A new study by the American Chemistry Council’s Performance Fluoropolymer Partnership (PFP), a trade organization of fluoropolymer manufacturers and users, shows that 14 fluoropolymers meet internationally accepted criteria used to identify polymers of low concern (PLC) to human health and the environment. The study, published in a peer-reviewed scientific journal, examined factors like chemical composition, reactivity, purity and stability. It also considered factors like the size of fluoropolymer molecules and whether they dissolve in water, which can be predictive of potential uptake by the body and movement through the environment.

The study builds on previous work that examined four other fluoropolymers against the PLC criteria. When taken together, the two studies cover the types of fluoropolymers that represent 96% of the global fluoropolymers market. But even more importantly, the study further demonstrates that all PFAS are not the same.

Why is that important? As media coverage of PFAS increases, some voices in Washington and state capitols are proposing overly broad laws and regulations that would ban the use of every PFAS chemistry. But the science simply doesn’t support that kind of approach. Unduly generic policies could threaten fluoropolymer manufacturing and availability, having an enormous impact on numerous industries that are the backbone of our nation’s economy and create the products Americans use and depend on every day.

Regulating all PFAS as a single group is neither scientifically accurate nor appropriate. Fluoropolymers that meet the criteria for polymers of low concern should not be swept up in laws and regulations intended to address other PFAS chemistries with completely different properties and uses.

Efforts to identify and mitigate concern about PFAS must be based on a sound scientific foundation. The PFP’s new study demonstrates clearly that all PFAS are not the same and that fluoropolymers meet criteria for identifying polymers of low concern to human health and the environment. Lumping fluoropolymers into the same laws and regulations as other PFAS with completely different properties could threaten the future availability of vital fluoropolymer technologies and the industries that rely on them.

To learn more about the study, visit FluoropolymerPartnership.com.

2022-09-20T08:01:00

(BPT) – Every year during Hispanic Heritage Month, the country honors and celebrates the contributions Latinos have made to this nation. From advancements in science, healthcare, civil and labor rights to leadership in government, military, entrepreneurship and business, the Hispanic community continues to have a profound and positive impact on our schools, our communities, our economy and our country. Nevertheless, they are still vastly underrepresented in many areas, particularly in Science, Tech, Engineering and Mathematics (STEM) sectors.

There are three current realities to consider when it comes to Hispanics, Latinos and Latinx in the fields of STEM:

1. The U.S. Hispanic population is significant but doesn’t have comparable representation in the tech market.

Technology continues to change how we work, live and learn, and it’s an important driver of the world’s economy. However, diversity gaps still exist across the industry, especially among the Latino population. They remain highly underrepresented in the STEM workforce — making up only 8% of STEM workers[1] despite being the country’s second-largest ethnic group. This divide is direr for women, with Latinas only holding 2% of STEM jobs[2] in the U.S. even though women comprise 28.8% of the U.S. tech workforce.[3] Higher education institutions and companies have a tremendous responsibility to support and encourage Hispanics and increase representation in the tech field.

2. Higher education has an opportunity to do more to encourage and support Hispanics.

Hispanic students are often the first in their families to pursue an education and attend college. Often, they face numerous barriers that make a traditional college experience even more difficult, such as trying to balance family and work responsibilities. When educational institutions support and prepare Hispanic learners and others from underrepresented communities to succeed in a world shaped by technological change, they have a better chance to prosper. Increasing diversity in the overall student population, hiring diverse faculty, providing scholarships, implementing tech-influenced offerings and flexible programming are ways that higher education is meeting students where they are.

DeVry University is a prime example of how higher education can nurture student success. With Hispanics accounting for 17% of its total student population, DeVry’s education solutions include flexible programming, career services, and its NextGen Hispanics Scholars Program helps Latino students pursue a college education and advance in the workforce.

“I have experienced firsthand how education changes lives,” said DeVry University’s Chief Inclusion, Belonging, and Equity Officer, Veronica Calderón. “Our goal is to reduce educational disparities, close the gap and build a more diverse workforce. Our NextGen Hispanics Scholars Program provides access to numerous resources aimed to help Latinos thrive in tech careers.”

3. The tech industry has a role to play in fostering success, growth and opportunity for Latinos.

Diversity catalyzes new ways of problem solving and creative thinking — two keys to innovation. However, there’s a misconception that you must have specific college degrees to gain the technical know-how to work in the industry. Oftentimes, all one needs is digital training, a certificate or micro-credentials to gain the skills required to advance in a tech-driven ecosystem.

Organizations in and outside of STEM have an immense opportunity to support Latino employees and drive a more equitable workplace by helping them acquire the education and skills needed for career progression. By investing in upskilling and reskilling programs for underrepresented talent, organizations can help lift a common barrier to their growth, gain access to a large pool of untapped talent and keep up with the pace of innovation.

Santa Clarita’s former mayor and councilmember, Bill Miranda, has been on the leading edge of the high-tech industry for years. He recently spoke to a group of NextGen Hispanic Scholars and underscored the importance to making education accessible, affordable and equitable.

“Despite a projected growth in tech jobs, Latinos remain underrepresented in the tech field, and it’s time to change that,” added Councilmember Bill Miranda. “As a public servant, Air Force veteran and Latino in the tech industry, I know how important access to education, community resources and mentorship opportunities are for our community. We need diversity across the technology industry, and more Hispanics in tech careers that help to solve today’s challenges.”

The more we support the education and careers of the Latino community, particularly in tech, the more innovation and growth we’ll experience as a society. During Hispanic Heritage Month and beyond, think about how you can support the next generation of Hispanics — whether professionally or personally.

2022-09-20T06:01:00

(BPT) – Building your business has been your life’s passion. You have dedicated much time, energy and finances to ensure its success, and you want that success to continue even after you are no longer involved in the daily operations. This is why succession planning is essential.

Consider these two scenarios: First, you’re 75 and your son and daughter have been involved in running the business for 20 years, making some management decisions for the last five years. You have all discussed and have agreed on plans for the future of the business. Now imagine you’re 75 and you oversee all operations and make all the decisions without the input of your family. You have had no discussion with your son or daughter on whether they desire or intend to take over the business.

Should something unexpected happen, which scenario gives your business the best chance for survival?

“Most family business owners pride themselves in not just building a business, but rather, creating a family legacy to pass along,” said Jeanne Bernick, ag consultant at Pinion. “It’s important to put a plan on paper as soon as possible for the future of your business.”

Bernick has worked with hundreds of business owners helping them determine the best exit strategies to achieve their goals. She shares the top reasons why prioritizing succession planning now matters.

1. Decisions require time

When it comes to succession, finding the ‘window’ is one of the hardest parts, because unfortunately, most businesses often only find the window when there is a sudden illness or death in the family. As a result of the COVID disruption, now is actually the perfect opportunity to recognize those who have stepped up, and think through the implications of this long term to address what adjustments could be made.

2. Openness matters

Of the 81% of family operations that have no succession or transition plan, 50% think it’s too early to think about it and 29% feel they can’t afford the time. Management decisions, ownership decisions and family decisions require early communication and openness for long-term success.

3. The unexpected happens

No matter when you intend to transition, remember that the business is more valuable — for your personal wealth and the longevity of the business for the family — if it’s running smoothly and you have the right management and successors in place should anything unexpected happen.

4. It’s never too soon

There is no magic number when it comes to age and succession planning. The sooner you start the sooner you can take advantage of the advanced planning techniques that can help build and transfer value to your business for its future and its stability to support your family. If situations change, you can easily adapt your plan.

5. Get relief

By getting started now, you get your ducks in a row and put a plan in place. If you hesitate because the process forces real family conversations that could be uncomfortable or tense, imagine the relief that comes from the identification of back-up leaders and management to be prepared for when the time comes — not just who you think might want to, but actually identify those who have the heart, desire and talent to step up.

6. Coaches provide guidance

There are specially trained family business coaches and advisors that can help you get started. A simple consultation to talk about your business and operations is all it takes. Yes, it can be complex at times because, let’s face it, families can be complex. But it’s never going to be easier to address these important topics than right now.

7. A professional facilitator helps

Uncomfortable at the idea of having difficult conversations with loved ones? A professional facilitator can schedule a time to visit with you and your family, and help you to easily navigate the process and any tough conversations that need to happen.

Strategic succession planning is essential to the future of your business. Learn more at PinionGlobal.com.

2022-09-13T09:19:00

(BPT) – Today, women in business face multiple challenges, from finding mentors to receiving funding. Woman-founded brand Stacy’s Pita Chips is committed to helping women entrepreneurs overcome these challenges through the Stacy’s Rise Project, a grant and mentorship program. Read on to learn about the experiences and challenges of three previous winners.

2022-09-08T12:01:00

(BPT) – In school, students are learning new skills that will help them achieve their dreams. For a growing number of them, these dreams include owning their own business. Small businesses are an important part of the American economy and have accounted for two out of every three jobs added in the past 25 years, according to the Bureau of Labor Statistics. Investing in budding entrepreneurs today will help create strong small businesses in the future.

One way students learn about what it’s like to be a small-business owner is through Junior Achievement, an organization that works to provide school-aged children with lessons in financial literacy, work and career readiness, and entrepreneurship. Because Junior Achievement educators directly work with students in communities across the country, they have unique insight into ways to support the next generation of small-business owners.

In fact, according to a Junior Achievement survey, nearly 9 out of 10 (86%) teens indicated they had some level of interest in starting their own business. These students may decide to start their own business after graduation or bring their entrepreneurial ambitions into their college endeavors.

Schools provide important lessons about the skills and drive needed to own a business, but learning doesn’t stop when the last school bell rings. Role models in the community can also significantly make a positive impact in forging a path for future small-business owners.

Engage kids

If you have children of your own or friends with children, ask them about their entrepreneurial interests. Tell them about your reasons for supporting small businesses and take them to these stores in your community. Oftentimes the owners are present, and if they aren’t too busy, are happy to discuss their experiences.

Mentor and hire interns

If you own a small business yourself, consider hiring students and interns. This can help you during busy seasons while also exposing young adults to what it’s like to run a small business. If developing a hiring program like this doesn’t work for you, consider being a mentor instead. Your local business association or college would likely love volunteers and you’ll feel good about making a difference.

Support businesses making an impact

Put your money where it matters by shopping at businesses that are helping entrepreneurs. For example, the Start Small, Grow Big program by The UPS Store is designed to support future small-business owners and entrepreneurs by enabling customers across their network of 5,100+ locations to donate to Junior Achievement USA upon checkout. All donations benefit Junior Achievement programs in the communities in which they are received. Learn more at TheUPSStore.com/StartSmall.

Start an entrepreneurial project

Whether part of a school assignment or just for fun, consider ways children can get a taste of what it’s like to own a small business by choosing an age-appropriate project you can assist them with. You might help young kids run a yard sale or lemonade stand. Adolescents might start an online storefront for their arts and crafts, or perhaps for their tutoring or childcare services. Whatever the project, talk about goals, budgeting, customer service and other important components of a good business plan.

The future is bright as the next generation of small-business owners are learning important life skills and dreaming big. With these steps, you can help ensure their early visions empower them in the future.

2022-09-08T06:01:00

(BPT) – The effects of the global pandemic have led to economic uncertainty, and small businesses are the most vulnerable due to their lack of resources. According to a survey by Goldman Sachs, 89% of small business owners say broader economic trends, such as inflation, supply chain issues and labor shortages are having a negative impact on their business. Due to a variety of issues related to these trends, consumers are also spending less.

With consumer spending trending downward and operational costs going up, small businesses will need to reduce costs and attract new customers to stay competitive. Digital advertising is a cost-effective way to achieve these goals and you don’t need to be an expert to get impactful results. Here are three tips to make the most of your marketing budget:

1. Understand your customer

Modern consumer behaviors have changed drastically over the last few years, including how people shop and make purchasing decisions. Whether your customers have switched to working from home or embraced new tools and technologies, it is important to understand these trends.

Put yourself in your customer’s shoes. Where are they spending their time — and are they making purchase decisions at different times of the day? What do they care about most in today’s environment? For example, 85% of consumers say they’ll only consider a brand if they trust the brand. As you think about your ad strategy, look beyond just product features and pricing. Using advertising tactics that reflect your values helps create meaningful connections with potential customers. This could include everything from audience targeting to keyword selection to ad copy. And staying connected to your customer also means incorporating social media into your strategy. Having a social media presence and creating a schedule to post regularly will allow you to reach your customers where they are spending time.

To learn more about your customers, ask for feedback through surveys, in-person, email or even social communities. Also, leverage insights from sources like your own website traffic reports and industry reports on consumer trends. Keeping these learnings in mind will help you make more informed decisions on what messaging will resonate and where your marketing dollars should be spent.

2. Take a multi-channel approach

Small businesses need to be strategic about how and where they advertise to reach those most likely to purchase their product or service by showing up at key points in the decision-making process. These can often span more than a dozen points across devices (PC and mobile) and websites or apps and take place over days, weeks or months. This requires businesses to take a multi-channel approach to their digital advertising, placing advertisements across search engines, websites, video and social to reach people at different points in their shopping journeys. Building and managing campaigns across these different types of ad products and sites, not to mention learning the ad tools that power these, may sound complex. However, it can be a lot easier than you expect thanks to modern tools that help you build and manage campaigns across different websites and apps.

You can save time and run multi-channel campaigns with a one-stop solution like Smart Campaigns from Microsoft Advertising, which helps small businesses get started with digital advertising and connect with the right customers online. Its new redesign provides a simple and efficient way for advertisers of all sizes and budgets to run ads across devices on Microsoft properties such as MSN, Bing and Outlook.com, and partner properties, including sites like Yahoo, AOL, DuckDuckGo and more. Plus, the new Multi-platform feature makes it easy to run ads across leading advertising and social media platforms, including Google Ads, Twitter, Facebook, Instagram and LinkedIn, all managed from one convenient place.

3. Use automated tools to save time

Time is a limited and diminishing resource, especially for small businesses. To save time and help reduce the stress of promoting your business, consider automated marketing and advertising tools that require minimal maintenance and help streamline the process. These tools often work within a certain set of parameters that you define, along with your desired outcomes. They use various signals and machine learning capabilities to make adjustments in real time to give your ad the best chances of showing to the right person at the right time in the right place. Tools that use automation take the complexity out of daily advertising campaign management to allow you to focus on other business priorities like quality, customer satisfaction and retention.

Maximize your time and resources while growing your business by leveraging these three tips in your digital marketing.

2022-09-06T16:01:00

(BPT) – Consumer behaviors are shifting faster than ever before, and businesses that want to succeed in this environment need to stay one step ahead of the game.

For small businesses, there’s more competition than ever. According to recently released data, in 2021, 5.4 million new business applications were filed, surpassing the record set in 2020 of 4.4 million. On top of this, the pandemic forced consumers to reevaluate the way they interact with brands and businesses – according to Nielsen, 67% of consumers changed the way they shop in 2021, and this figure is poised for further growth.

But for businesses thinking one step ahead, this evolution is creating opportunities to innovate, differentiate, build new streams of revenue and grow their businesses. Here are three trends SMBs need to focus on in order to keep up with customer needs in 2022 and beyond.

1. Expanding online to meet customers where they are

Being online is no longer a nice-to-have — it’s table stakes. SMBs that haven’t adopted an online presence, or who have few digital channels (Facebook, Instagram etc.), should consider enhancing their online presence to be more accessible – and visible – to their customers. Customers’ lives are becoming increasingly digital every day, and businesses need to expand their digital touchpoints to meet them where they are – whether that be by adopting new online marketplaces, social commerce, digital marketing tools or new, convenient payment methods for customers.

E-commerce has been increasing year-over-year for decades, and the pandemic only accelerated the move online for small businesses. According to a report by Digital.com, 77% of small retailers now have a business website, but to stay one step ahead, businesses need to be exploring options beyond their own website to generate additional sales avenues online. Commerce developments on social media platforms and new online marketplaces have created opportunities to reach and sell to customers in new ways.

Of course, one reason many small businesses aren’t expanding their online footprint is the upfront expenses it takes to get started.

“Small- and medium-sized businesses are the backbone of the U.S. economy, but too often they are living ‘sale by sale’ without enough cash flow to innovate or evolve their business quickly,” said Bernardo Martinez, Vice President of Global Merchant Lending at PayPal. “SMB owners need access to financing tools that help them quickly jump on opportunities at the earliest possible moment in order to maximize customer interactions and sales.”

Flexible spending solutions are available to help SMB owners capitalize on these opportunities quickly. For example, PayPal’s new Business Cashback Mastercard® credit card can enable purchasing quickly with access to a virtual card that can be used when checking out with PayPal, available immediately upon approval. Additionally, the card’s activity – including employee cards – can be accessed from the business’s PayPal account, making it simple to check available credit and monitor employee spending. Beyond this, the card rewards business owners with unlimited 2% cash back¹ on purchases without a purchase category restriction or an annual fee² helping SMB’s earn cash back on everyday expenses that can then be applied to the card balance as a statement credit or their PayPal balance.

2. Adapting business models to customer behavior

During the pandemic, customers engaged with brands in new ways, making it necessary for SMBs to find innovative sales avenues and unique service models. Even as customers return to pre-pandemic behaviors, SMBs should continue to explore how to evolve their business model and tap into new opportunities. For example, according to DoorDash’s 2022 Restaurant Online Ordering Trends, 86% of customers surveyed said they ordered pickup or takeout as much or more than they did last year. While many restaurants and retail stores established curbside pickup or walk-up window options during the pandemic instead of delivery, even as social distancing guidelines lifted, customers continue to seek out the option to pick up.

SMBs can get strategic about evolving their business model and use the wealth of customer intel at their fingertips to increase communication with customers via websites, online chats and social media channels and truly listen to their feedback. Another way to level up customer engagement and loyalty is to offer discounts on digital platforms or host virtual events and contests to reward existing customers and capture new ones. Thinking more strategically about data and insights can help enrich customer engagement and ultimately increase sales and loyalty.

3. Identifying and filling market gaps quickly

According to the NFIB’s Small Business Problems and Priorities Research, keeping up on business and market developments is one of ten small business challenges that business owners agree upon the most. But when an SMB can quickly identify and fill a market gap, they can stay one step ahead. Take for example the Los Angeles-based restaurant Dog Haus Worldwide. During the pandemic with grocery shelves bare and their in-dining numbers declining, they expanded beyond their restaurant to sell fresh foods customers would normally buy at the grocery store like hot dogs, sausages and burgers.

Small-business owners that stay abreast of industry trends, closely track developments in their competitive landscape and pay attention to pain points in their communities have a leg up in spotting new opportunities, early on. Thinking outside of the box to fill gaps in customer needs can lead to new streams of income.

Of course, the ability to pivot and meet consumers’ needs quickly often requires purchasing power. SMBs should be aware of the different options available to them beyond bank loans that could help with expenses related to new projects.

To learn more about how to pay for business expenses and get rewarded for purchases, visit PayPal.com/businesscreditcard.

The PayPal Business Cashback Mastercard is issued by WebBank pursuant to a license by Mastercard International and serviced by Concerto Card Company. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

¹Purchases and other transactions subject to credit approval. See the Business Cash Rewards Terms and Conditions for details. To earn Business Cash Rewards on eligible purchases, you must have an open Business account with PayPal to which your Business Card is linked. If your Business account with PayPal is closed for any reason, you will no longer be able to earn Business Cash Rewards and will forfeit any remaining Business Cash Rewards balance.

²Terms and Conditions apply. You must have a PayPal Business account to apply for a PayPal Business Cashback Mastercard.

2022-08-25T08:01:00

(BPT) – How many things do you get done online in a day? From banking, gaming, shopping, dating, fitness, social media and more, the digital landscape broadens your world in many useful and interesting ways. The downside is signing up for all those accounts can also put you at risk of new account fraud.

New account fraud occurs when criminals exploit a victim’s personal information, such as a phone number, address and email, in order to gain access to a digital platform. Once fraudsters have access to accounts, they commit costly fraud that leaves a trail of angry customers and damaged brand reputations along the way.

Unfortunately, this online trend is growing. Synthetic ID fraud, one example of new account fraud that can occur during the customer onboarding process, is up 33% from a few years ago with financial institutions estimating $20 billion in losses during 2020 alone.

The good news is reputable companies are taking steps to protect their customers and members by implementing various security steps and authentication methods. Recent studies report that 80% of people select a company that has a strong digital identity verification. What was once thought of as an inconvenience is now an expectation—an important signal to customers that the brand is protecting them.

Shutting down new account fraud online requires a personalized, dedicated solution that adapts to the evolving world of fraud. If you have digital accounts, you have probably encountered Telesign whether you realize it or not. A leader in account verification and digital security, Telesign technology helps companies securely onboard customers, prevent fraud, secure communications, and enable the digital economy by allowing companies and customers to engage with confidence.

The more you know about new account fraud, the more you can protect yourself from it. Here are some of the most prevalent examples of new account fraud being perpetrated online by fraudsters today, along with the latest best practices you can use to help keep your digital accounts safe:

Fake users

New account fraud is often carried out by fake users, who complete the onboarding process under the guise of false information in order to commit fraud and wreak havoc on digital platforms. A fake user is able to pass through the verification and authentication processes during onboarding and set up shop in the ecosystem, where they spam and victimize legitimate users, impersonate brands and commit fraud.

Synthetic ID fraud

Synthetic identity fraud happens during account creation. In synthetic ID fraud, criminals combine both real and fake personal information to create a fake person, which they then use to apply for credit and make purchases in bad faith. One of the biggest problems resulting from synthetic ID is the identity created in these schemes doesn’t belong to a single, real person, and thus any fraudulent activity is untraceable and extremely costly to the victims.

IRSF

International Revenue Share Fraud is a communications fraud that gives criminals a chance to benefit from revenue share from premium numbers. In IRSF, which occurs in the onboarding stage, fraudsters use scripted attacks and other illegal business practices to make unauthorized calls and messages to premium rate numbers (PRN). Unlike other types of new account fraud, IRSF doesn’t target individuals; it targets businesses.

Promo abuse

Promo abuse happens when a fraudster circumvents a company’s rules or restrictions regarding promotions, using multiple accounts to take advantage of sign-up offers, such as coupons or free trials. On the surface, promotion abuse sounds innocuous, but in the long run, abuse of signup bonuses, referral rewards and free trials can add up. In fact, promo abuse is now one of the costliest forms of fraud retailers face, which impacts their finances and costs for everyone.

Protecting your accounts

Always follow the latest account security best practices, such as enabling multi-factor authentication (MFA) or two-factor authentication (2FA) and using your real mobile phone number, when working with an ecommerce or digital organization.

Two-factor authentication significantly decreases the risk of fraudsters accessing your online accounts. Authentication factors can include a one-time password sent to a mobile device, subscriber status and more. Additionally, if given the option for multi-factor authentication, always opt yes to ensure higher security every time you sign into your account.

As part of your account creation, you will likely be asked for your phone number. Your phone number is important for businesses monitoring security, so be sure to provide your real number. Using phone number attributes, businesses can monitor traffic for suspicious patterns and then input the new-account request into a global telecom fraud database. This stops creation of unauthorized accounts and blocks creation of multiple accounts by verifying each phone number and its owner.

To learn more about digital fraud and steps to protect yourself and your customers, visit Telesign today.