October 5, 2018 | Veratad Blog | File under: Veratad Technologies Blog
September & October: Ask Us Your Digital Identity Questions
We’ve received loads of questions from customers, partners, and occasionally from friends, about a myriad of things relating to Fraud Prevention & Digital Identity.
We’re sure they aren’t the only ones with questions – so we’ve decided to launch a monthly mailbag where our Director of Strategic Accounts & Client Quality Services, Tom Canfarotta, will answer your questions.
We received many questions about fraud prevention and detection over the last few weeks. With the Holidays right around the corner, many of our friends in e-commerce are expecting an uptick in their fraud alerts, so we’re not surprised to be flooded with these types of questions. In addition, with the launch of our latest product, IDMatch+PredictSM on the horizon, there’s never been a better time to ask us your questions on fraud.
Can an age or identity verification solution be used as a fraud prevention solution?
~Kim, from New York
In short, perhaps, but not the best approach. Age and identity verification solutions do have a halo effect of fraud prevention but even the best age and/or identity verification solutions should not be counted on as a fraud prevention solution strategy.
As an example, one of our clients, Premium Vape Supply, implemented our age and document verification solutions and discovered they were able to prevent thousands of questionable and potentially fraudulent transactions. “While Veratad’s services are competitively priced, it’s paid for itself with the money we’ve saved from reducing our chargebacks,” the Premium Vape Supply team mentioned.
While these verification solutions are certainly beneficial in fraud prevention, age and digital identity verification solutions alone are not a replacement for a robust fraud prevention solution strategy. They are each designed to achieve their own goals and satisfy different regulations, and check different sources to fulfill these needs. While there is overlap in the data relied upon to prevent fraudulent transactions in both solutions, good fraud prevention solutions check against additional databases and other transaction, location, and device attribution to help detect fraudulent activity. For example, the data from a credit card isn’t necessary to run an age verification transaction; the same can be said for a name and a date of birth not being sufficient to run a fraud check.
Both can be used together as a multi-layered approach to fraud prevention. We highly suggest implementing the solutions designed to solve the problem at hand.
Does my fraud prevention solution need Machine Learning and Artificial Intelligence?
~Eric, from Los Angeles
We believe so. Fraudsters are continually adapting and breaking through the latest layers in cybersecurity. At the same time, customers are demanding more secure checkout and onboarding processes, with less friction. With this new ecosystem of evolving fraud and demanding customers, organizations are relying more and more on advanced technology to offer the path of least resistance to legitimate customers while blocking suspicious transactions.
Machine learning supports the rapid decision processes required to achieve this balance of low friction and fraud prevention and is an efficient way to combat evolving fraudsters attacks. Without machine learning and Artificial Intelligence on the fraud prevention side, how can we keep up with the fraudsters who are using machine learning and Artificial Intelligence?
What can we do to offset the expected increase in fraudulent activity from the upcoming Holidays?
~Sean from Miami
Well, you are correct in your expectation – last year, e-commerce fraud spiked about 30% over 2016 (Computer World) – so, the trend is up and you’re definitely right to be concerned for the upcoming Holiday Season.
So, to answer your question, first I will take a leap of faith that you already have some fraud prevention system in place and then second, I will ask you a question: Have you been keeping up with new solutions and or the existing enhancements of your current solution to work in conjunction with your current systems? If not, my answer then is to do that ASAP. It takes time to evaluate and implement new solutions; so, please get the ball rolling on this project as soon as you can. Remember, the best fraud prevention solutions are the multi-layered ones and if you’re still at a loss, give us a shout. We’d be happy to walk you though IDMatch+Predict! #ShamlessPlug
Did our post bring up more questions on fraud prevention and detection? Don’t worry, you can ask them here and we’ll share them in our next post!