Voice of the Industry

The power of data intelligence in fraud prevention

Tuesday 8 September 2020 08:00 CET | Editor: Simona Negru | Voice of the industry

Glenn Cobb, Director, Solution Engineering at Simility, a PayPal Service, explains how data fuels modern businesses and informs every decision a firm makes, from launching new products to improving customer experiences to fighting fraud


By 2024, the amount of data generated will be greater than 150 Zettabytes – over three times as much created this year. Fraudsters also have access to large data sets and unprecedented access to sophisticated tools and forums. To fight fraud, firms must work with a partner that can leverage the insights of a vast risk intelligence network to out-maneuver the fraudsters. 



The ability to gather actionable intelligence from data is now one of the greatest competitive advantages a firm can have. Each year, more data is generated, and in the next four years the amount of data generated each year is expected to triple, from over 50 Zettabytes to more than 150 ZB. By efficiently leveraging data, businesses can launch products that are more likely to retain their customers and attract new clients from competitors. However, firms are not the only entities that have access to the new troves of data. Fraudsters — equipped with out of the box tools and dark web marketplaces where they purchase terabytes of data and with ready access to stolen identity information — have never been better positioned to defraud global firms.

Fraud poses an increasingly dire threat to firms, as it impacts not only their bottom line but also can lead to lost customer loyalty from stolen accounts or increased friction. Across the user journey, from signup to login to checkout, fraudsters can insert themselves at different points to create fictious accounts, take over legitimate user accounts, or use stolen cards to buy goods. Fraud is also rapidly evolving, and the tools fraudsters use today become ever more sophisticated with each passing year. These tools require new approaches and leveraging a variety of new data sources.

Fighting fraud requires network intelligence

To combat this rising fraud, firms must turn to a solution that can in turn harness data to identify fraudsters and help prevent fraud from entering into their ecosystems. With Simility, a PayPal Service, companies now have access to a new identity assessment service that helps provide enhanced risk information leveraged from PayPal’s 2-Sided Network to help firms reduce fraud and increase authorisation rates. With access to the PayPal Network — comprised 346 million active accounts transacting over 3 billion times each month — companies have a trove of intelligence to help verify the credibility of entities such as devices and IP addresses with PayPal before processing a new application or transaction.

PayPal global intelligence helps firms fighting fraud across three specific use cases: new account origination (NAO), account takeover (ATO), and transaction fraud. Device and IP information is crucial in helping identify fraudulent accounts during account signup, Simility provides insight into the frequency of an IP in the PayPal network as well as key indicators that can help determine if a device is suspicious. To help catch fraudsters that have taken over an account using stolen credentials, firms can use the intelligence service to better identify abnormal access behaviour and alert analysts of certain risk characteristics like TOR-based IP’s or emulated devices. Similar to account signup, device and IP data play a critical role in assessing transactions as they occur, and Simility can help identify fraudulent transactions due to stolen cards. 

PayPal global intelligence: network intelligence at scale

A simple integration connects Simility’s device recon service to the PayPal Network. The embedded code collects information when a user is using a firm’s app or site and provides a unique fingerprint and the risk parameters for assessment. The service leverages data known as evasion signals — signals that indicate a user is utilising methods to evade detection, such as using an emulator or proxy. When the data is received in the Simility platform, it is blended with event data, and relevant rules and models are run, generating a final decision and risk score. 

Integrating with PayPal global intelligence delivers more than 50 specific attributes that assess the potential risk associated with an IP address or device which can be seamlessly attached to the signup, login, or transaction data. This integration also brings in a new set of rules and ML models purposefully created to leverage the additional intelligence coming through PayPal. The new rules cover characteristics such as frequency of visibility, distance travelled/time calculations since last event, device OS and settings, and IP risk. The rules can be updated by firms as desired and models can be configured and trained as data becomes available.

With Simility, companies can now harness the intelligence from the PayPal Network, helping to better identify patterns indicative of fraud while improving authorisation rates and lowering manual reviews. In a world of growing data and evolving fraud, the firms that can harness the insights from a vast network of risk data will be the most effective at fighting fraud, boosting customer loyalty, and protecting their bottom line.  

About Glenn Cobb

Glenn has an extensive 30-year background related to Information Technology with a focus in financial services and ecommerce. He has been fighting fraud and related security attacks for more than 10 years through his role as an IT executive at Tompkins Financial in New York, and since then through consulting and providing solutions to firms globally. When he is not fighting fraud, Glenn likes to do carpentry and fly as a private pilot.

About Simility

Simility, a PayPal Service, offers real-time risk and fraud decisioning solutions to protect global businesses. Simility’s offerings are underpinned by the Adaptive Decisioning Platform, built with a data-first approach to deliver continuous risk assurance. By combining artificial intelligence and big-data analytics, Simility helps businesses orchestrate complex decisions to reduce friction, improve trust, and mitigate fraud. 

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Keywords: Glenn Cobb, Simility, data intelligence, fraud prevention, risk intelligence, threats, dark web, Marketplaces, accounts, account takeover, Network Intelligence, risk score
Categories: Fraud & Financial Crime
Countries: World
This article is part of category

Fraud & Financial Crime

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