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How Handy Uses Data To Find Fraudsters Before They Strike

Fraudsters are constantly reinventing their approach to schemes, putting businesses and eCommerce merchants in a precarious position of responding to constantly-evolving fraud threats. In other words, it is no longer enough to respond to a fraud attack after it occurs. Businesses must be able to anticipate and react to fraud in real time.

This task is growing increasingly challenging as more data becomes available for fraudsters to exploit. Recent projections indicate data volume will increase by 800 percent in the next few years, and 80 percent of this information will be unstructured, making it even more challenging for businesses to determine which pieces of data are relevant.

New fraud decisioning solutions are helping businesses clear the data haze to understand trends as they emerge in real time. The all-new Fraud Decisioning Playbook, a collaboration between PYMNTS and Simility, highlights the latest solutions that combine automation, artificial intelligence (AI), machine learning (ML) and Big Data analytics to help companies to better understand new fraud threats as they emerge.

Across the Fraud Decisioning Landscape

Loyalty programs offered by online retailers are becoming increasingly popular among fraudsters — for all the wrong reasons.

Recent research found fraud in the loyalty program space increased by 89 percent in the past year. The data indicates that roughly 1.5 million individuals have been impacted by account takeover (ATO) fraud attacks that resulted in a new account being opened in their name. In these attacks, bad actors transfer funds and rewards from legitimate users to fake accounts. Merchants’ return policies and point-of-sale (POS) transactions are also increasingly being targeted.

A new solution from Segasec aims to help online businesses protect themselves more effectively against fraud and phishing attacks. The new solution works by identifying potential ATOs before they can compromise customers’ accounts by detecting fake websites that attempt to defraud legitimate users.

A recent partnership between eCommerce solution provider Miva and digital fraud protection provider Kount uses AI-based tools to provide merchants with a clearer insight into a user’s potential fraud risk. Under the partnership, Kount will integrate Miva’s AI-powered solution into its eCommerce platform to enable merchants to more easily and automatically reject high-risk transactions and review suspicious orders.

Deep Dive: Dipping Into Data Lakes

Businesses that sit on troves of data must confront the three Vs of data processing — velocity, variety and volume. Data lakes can help businesses stay on top of fraud by storing and collecting information in large depositories and providing unstructured data and meaning that might not be obvious at first. The inaugural Playbook’s Deep Dive highlights how data lakes are prompting a sea change in the anti-fraud fight.

Marketplaces Fight Fraud on Two Fronts

Two-sided digital marketplaces that cater to both buyers and sellers must face fraud on both fronts by ensuring both parties are legitimate at the moment of onboarding. In the Playbook’s inaugural Feature Story, Oisin Hanrahan, CEO of on-demand professional hiring marketplace Handy explains how the firm’s use of AI, ML and human insights help it respond to fraud in real time.

About the Playbook

The Fraud Decisioning Playbook, a collaboration between PYMNTS and Simility, is a monthly report that highlights the way eCommerce merchants, financial institutions and other businesses are embracing fraud decisioning solutions to reduce chargebacks and account takeover attacks in order to deliver a secure and seamless experience for legitimate users.

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