By striking the right balance between security and user experience, merchants can stay one step ahead of the competition. With cybercrime expected to cost the global economy USD 10.5 trillion by 2025, implementing friction to protect your business from fraud, chargebacks, and a wide variety of revenue killing activities is necessary. However, it's those merchants who take the appropriate steps to integrate security solutions that do not negatively impact their consumers who come out on top.
Synthetic identity fraud is a problem that is growing in sophistication. Bad actors are increasing the frequency and development of fraud techniques that mix-and-match real and fake identity attributes; constructing a fabricated identity with valid characteristics. This allows them to bypass fraud systems of both big and small companies, preying on the often rudimentary validation and verification checks that are still used. While there is a higher risk for a smaller or newer businesses – because they often lack the sophisticated technology, experience, and infrastructure of more established operations – identity thieves are experts at probing for vulnerabilities and then exploiting them. Because synthetic identity fraud affects businesses of all sizes and industries, no business is safe.
While data is fundamental to business success, not all data is created equal. When it comes to accuracy, quality matters. Some merchants continue to use internal data to authenticate customers. Unfortunately, internal data may not always be enough.
In a recent on-demand webinar, Noelle Wiggins, Director, Global Data Strategy at Ekata, a Mastercard company, and Erika Dietrich, VP of Global Merchant Payments Analytics & Optimisation, ACI Worldwide, explain that complementary data can be leveraged to add context and drive differentiation by enriching existing business logic or helping you create stronger machine learning (ML) models for the purpose of identity verification and fraud prevention. The focus here is on ML models because, although rule-based systems are great, they are not always flexible enough to see past anomalies that may have been driven by social media, flash sales, etc. Another thing to note is that just because you have a lot of data, it doesn’t automatically make identity verification better if you don’t know how to leverage the data that you have.
Meanwhile, one of the best ways to derive meaningful insights from internal data is to invest in technology that adds context across time and geography. Businesses should license data and technology that helps them answer two fundamental questions:
Is the person real?
Is the person whom they claim to be?
To answer these questions, the right solution must link the digital identity back to the person and provide an analysis of how they are interacting and behaving online.
The Ekata Identity Engine enriches existing data for the purpose of identity verification and fraud prevention. Tools like this can be used to reduce internal friction by giving merchants a powerful, up-to-date service that ingests millions of updates per day. In turn, when customers’ entered identity elements are submitted (name, email, phone, IP, address), you receive validity markers and risk scores that enable better, more informed decisions about each customer. Merchants also gain transactional insight into whether those same elements have been used for good or bad transactions on other merchant sites. This is a powerful capability that goes beyond identity validation by offering customer intelligence that remains private but offers a game changing decision check. For example, a customer’s information can be validated and the transaction approved. However, if that information were being used on another site to create fraud, you might make a different decision either pre- or post-authorisation.
The Identity Engine comprises two distinct and mutually exclusive data sources: Ekata Identity Graph and Ekata Identity Network.
Ekata Identity Graph can answer the following questions:
Does this email belong to the customer?
Is this physical address valid?
Is this phone carrier historically risky?
Ekata Identity Network can answer the following questions:
When was the email first seen in a digital interaction?
Is the IP address risky?
Are there any anomalies or unnatural frequency of use of the identity elements?
Ekata uses these two data assets, along with sophisticated machine learning capabilities, to power our global APIs and SaaS solution. By offering you a comprehensive view of a customer’s digital identity and associated risk you can minimise friction for good customers. This is the ultimate way to ensure loyalty in an ever-evolving, competitive marketplace.
About Milena Babayev
Milena has over 18 years of marketing experience in the technology vertical. Working in security and fraud prevention has been one of the most meaningful experiences because she helps organisations make informed decisions about keeping their employees and customers safe from cybercriminals.
About Ekata
Ekata, a Mastercard company, empowers businesses to enable frictionless transactions and combat fraud worldwide. Our identity verification solutions are powered by the Ekata Identity Engine, which combines sophisticated data science and machine learning to help businesses make quick and accurate risk decisions about their customers. Our solutions empower more than 2,000 businesses and partners to combat cyberfraud and enable an inclusive, frictionless experience for customers in over 230 countries and territories. To learn more about how Ekata and our partners can help you deliver the best experience for your customers visit www.ekata.com.
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