Online fraud isn’t going anywhere. According to the Financial Cost of Fraud 2018, it’s now costing an average 7% of companies’ global expenditure. To make matters worse, executives aren’t always clear on how to track, measure, and curb the impact of fraudulent attacks.
Tensions in fraud prevention
The conversation tends to be the same across all organisations. Executives want lower fraud rates. Fraud managers need more resources, as their day to day efforts still rely heavily on manual business process. But the IT department is overloaded. Finance needs time to rebudget.
Alternatively, it’s upper management who needs convincing. Reducing risk isn’t a top priority, and fraud managers struggle to find the right KPIs. How can they convince leaders to fight an enemy whose impact is hard to measure?
In both cases, the solution is the same: fraud prevention processes must be easy to integrate, implement, and scale – without cannibalising company resources.
Why use data-based risk analysis
As an article in The Economist claims: The world’s most valuable resource is no longer oil, but data. This is also true in the world of risk analysis. Put simply: the more data fraud managers can get about online users, the more they will be able to:
Increase the efficiency of manual reviews
Improve decision making
Reduce false positives and negatives
Provide a better user experience for legitimate users
The question is therefore the following: how do you immediately access more data about users with low effort? The answer: data enrichment.
Leveraging existing data pools
Data enrichment is a process generally defined as enhancing, refining or otherwise improving raw data. In the context of fraud prevention, it is about merging your existing user data with external third-party databases.
This helps leverage single data points to create a broader user profile, based only on an email address, IP address, phone number, or even device used, (discovered through device fingerprinting).
Let’s consider a simple example. An email address is considered a core element of the digital identity of any online user. Trying to register on a website or signing up for a service? Good luck without an email address. Analysing certain third party-databases and utilising the proper tools will allow us to build an extensive profile about any user based on this simple piece of information. An email address surely does tell a lot about its owner. Even more so, similar things can be done based on an IP address, a device and various other data-points.
While the process seems deceptively simple, the results speak for themselves. At SEON, for instance, we used data enrichment to lower a company’s chargeback rate by 91% in 30 days only.
How enriched data becomes insights
Enriching data is a good start, but it doesn’t reduce fraud managers’ workload. That is unless you feed it through the right system. At SEON, it is our machine learning engine, which automates data enrichment processing in order to:
Discover patterns and trends in fraudulent behavior before humans can
Automate models so their accuracy improve over time
Improve the speed at which anomalies are discovered
Process unlimited amounts of data, 24/7
Machine learning through our Sense Platform takes data analytics to its logical conclusion, by offering true insight into a business through automated processing of enriched data.
Frictionless data enrichment integration
Whether you already have a fraud prevention system in place or not, SEON worked hard to create modular, flexible and easy-to-integrate solutions through two unique products:
SEON Intelligence Tool: packing all data enrichment features into a simple toolkit including a browser extension and a graphical user interface. Fraud managers can use it to manually enrich single data points for specific manual reviews or even aid currently used fraud management systems. It’s fast, efficient, and doesn’t require integration - therefore avoiding IT department and upper management concerns.
SEON Sense Platform: a complete end-to-end fraud prevention solution with integrated machine-learning module. Provides easy and flexible integration through API endpoints, and an intuitive GUI that gives fraud managers full flexibility over custom rules, adjustable ML modules, analysis features and multiuser management.
Exploiting your existing data goldmine
Many organisations do not realise that they’re already sitting on a data goldmine, easy to tap into with little effort. At SEON, we believe automated data enrichment is the future of fraud prevention, and that it is a tremendously powerful tool in the hands of the right fraud managers.
Whether you enrich data manually with the SEON Intelligence plugin or feed it into SEON Sense’s advanced Machine Learning module, we know our tools will help you gain the upper hand against fraudsters – with minimum effort, and through a solution that scales along with your organisation.
About SEON
SEON supercharges fraud prevention for online businesses. Harnessing machine learning and powerful data enrichment, we help banking, gambling, ecommerce or SaaS leaders reduce risk and improve conversion rates. Our flexible and innovative products give fraud managers a complete picture of online users, whether they want a no-integration data-enrichment plugin or a full end-to-end prevention solution that delivers automated, AI-powered rules.
About Bence Jendruszak
Bence Jendruszak is the Co-founder and Business Operations Manager of SEON. His vision is to create a safer environment for online high risk merchants. This is why together with his team has developed SEON, a unified risk management solution able to serve the needs of fraud managers.
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