Afterpay partners Cloudera for fraud detection

Afterpay is leveraging the Cloudera Data Platform (CDP) to run streaming analytics and advanced machine learning for detecting fraud in real time. The platform enables the company to identify, access, and reduce business risk related to fraud for its 3.6 million customers, helping deliver the company’s mission of powering an economy which provides consumers with improved financial access, inclusion, and experiences.

Fraud prevention and how the partnership falls into place

As detailed in the announcement, the Australia-based BNPL has a critical need for the ability to ingest data from millions of transactions in order to have duplicates and anomalies across its expansive customer base identified. Following an eightfold increase in daily transactions in less than a year, the company had a requirement for an increasingly stable production environment to accommodate large-scale data and ensure that analytics can be performed accurately and in an expedited manner, without having operational efficiencies compromised.

Based on press release information, existing in-house tools were not adequate in managing such internal analytics requirements, and the data platform was expected to be flexible, scalable, and built for growth so that it could accommodate new and additional services and solutions to support Afterpay’s expansion both regionally and globally.

Due to the analytics capabilities of CDP Public Cloud, Afterpay’s engineers are now enabled to produce as many as 800 million hybrid data streaming events and batch features so that the data analysis team can perform fraud and predictive analytics for increasingly data-driven and accurate insights.

Afterpay officials advised that fraudsters are becoming increasingly smarter in finding new patterns to take advantage of the system, which is why the company had a need for fast and flexible solutions to adjust to newly identified fraud patterns or behaviours in a rapid manner. As per their statement, the Cloudera Data Platform offers them the necessary set of tools and visibility to address these advanced fraud patterns in a proactive manner by having issues and irregularities detected in real time. This resulted in a 30% improvement in operational efficiencies and in internal net transaction loss (NTL) being kept under 10%.

What is more, Afterpay reinforced its fraud detection programme by having Cloudera’s advanced machine learning capabilities added onto its data platform, thus demonstrating CDP’s scaling ability. This enabled the data analysis team to anticipate fraud activities by identifying sequence patterns in valid transactions and flagging irregular transactions as being potentially fraudulent, which resulted in a 5% fraud rate reduction.

Cloudera representatives believe financial crime prevention requires continuous diligence as well as advanced analytics capabilities that help accelerate both detection and resolution. Following the increase in fraud activities, service providers should better their approach to addressing BNPL fraud to ensure merchants and customers alike that their personal data is secured. The company is committed to supporting Afterpay with the acceleration of its data transformation journey and helping them unlock the capabilities of machine learning and advanced analytics to manage business risks.