Understanding Customers Key to Fraud Prevention
December 13, 2016
Combining behavioral analytics and passive biometrics with traditional verification solutions goes a long way towards ensuring fast and safe online interactions for customers, while fighting fraud and lowering risk.
It’s estimated that by 2026, 75% of shoppers will make most of their purchases online. If indications from this holiday shopping season continue as expected we’re in for another epic year of online shopping.
I was thinking about the astonishing fact that the world now has more mobile devices than people. When you think about this reality, it’s inevitable that consumers are driving merchants toward more and more mobile shopping, and are demanding excellent online shopping experiences at the same time.
Understanding users reduces costs
The downside of online shopping is that where there is increased activity there is increased risk. NuData found that high-risk transactions increased by 167% over 2015. One of the ways companies try to manage risk is to manually review risky transactions – but it’s costly. Some sources say as many as 29% of all purchases are reviewed manually, and these reviews present a huge burden on operational expenditures.
Companies that seek to balance lower rates of manual reviews and great customer experiences are finding that an effective path is to become more accurate in verifying users. One global Fortune 5 E-commerce company used NuDetect passive biometrics and behavioral analytics to observe all aspects of the account lifecycle, not just the resulting transaction. Users with high levels of trust were green-pathed toward their purchases and manual reviews were reduced by 30%. In addition, there was a 60% reduction in false positive decisions. This was possible by focusing on pre-transactional customer behavior and analysis, saving the company $3,077,000 in manual review costs in the first year of implementation – all the while using their existing risk engine!
The Advance of Behavioral Biometrics for Better Customer Experiences
Advanced authentication models use behavioral biometrics in a layered approach to verify that the person accessing or applying for an account is the entity they purport to be. Solutions such as NuDetect exist on a transparent layer, totally unseen by the customer and fraudsters alike, requiring zero interaction from the customer, and no personally identifiable data is stored in a way that is ever attributed back to the end user.
How someone holds their device, the weight of their key strokes, along with hundreds of other behavioral data points are used. Not all automation is bad and the solution can decipher what is good and bad automation, and who is a good human, or a bad human. So, even if another person steals a device and tries to access an account with the valid credentials, or open a new one with a stolen identity, the technology will note anomalous biometric behaviors and empower NuDetect clients to make a decision. Combining behavioral analytics and passive biometrics with traditional verification solutions goes a long way towards ensuring fast and safe online interactions for customers, while fighting fraud and lowering risk.
*All claims and statistical material are attributable to NuData.
About the Author
Robert Capps is the vice president of Business Development for NuData Security. He is a recognized technologist, thought leader and advisor with more than 20 years of experience in the design, management and protection of complex information systems – leveraging people, process and technology to counter cyber risks.