Customer Spotlight: Battling Internet Fraud With Analytics

Kurk Spendlove's picture
 By | december 09, 2016
december 09, 2016

Learning how to monetize your data is one of the major themes of a new book by Gerry Cohen and Rado Kotorov titled "Organizational Intelligence: How Smart Companies Use Information to Become More Competitive and Profitable." iovation is pleased to be profiled in the case studies section, and our fraud prevention service represents one of the primary data monetization use cases.

Whether you are using your data to incentivize certain types of behavior, reveal the value of an asset, or help a process run more efficiently, data holds tremendous potential to directly impact the fortunes of the companies that collect it. As Gerry and Rado explain, the best way to monetize data and insights is with custom informational applications (InfoApps™) that allow users to obtain fact-based answers to specific questions.

Most InfoApps™ are built for a specific purpose and fit into a particular familiar workflow – in our case, fraud detection. We have created a knowledge base that contains information about the physical devices used to conduct online transactions. We calculate a “reputation” for each device based on previous fraud history, associations with other bad accounts or devices, and real-time risk assessments.

This data, along with WebFOCUS analytics, anchors a valuable service. Clients of iovation are alerted if a device directly or indirectly associated with a known fraudster tries to access one of the clients’ sites. For example, if a user commits fraud on a financial site using an iPhone, then taps over to a retail site using that same phone, our fraud prevention service will alert the retailer of potential malicious intentions, even if it’s that user’s first visit.

This is valuable information that our clients are willing to pay for – and we’re not alone in this growth market. Risk mitigation, fraud detection, and loss prevention are round-the-clock activities at nearly every large enterprise that does business online.  

We believe the key to effectively combating fraud is to remain one step ahead of fraudsters by proactively detecting and blocking suspicious activities before they are executed. That could mean flagging a fraudulent account registration, log-in, transfer, deposit, or checkout. More than 3,500 fraud analysts in various industries leverage our database of information on more than three billion Internet devices to determine the level of risk associated with online transactions. This database, along with iovation’s associated information systems, protects 17 million transactions and stops an average of 300,000 fraudulent activities every day.

Our secret sauce is an “association matrix” that reveals connections among related accounts and devices. It’s a bit like Facebook, with its nested associations of friends, friends-of-friends, and so forth – but in this case the associations are applied to devices and accounts rather than to people. For example, an Internet user might move from a retail site to a financial site to a dating site to a social network site. By looking at the transactions that are executed by that user’s device, we can tie all those things together.

With WebFOCUS, we deliver interactive reports and InfoApps™ that allow clients to analyze actual and potential threats. Fraud management teams, both internally and at our client sites, use these InfoApps™ to investigate transaction details, device histories, and suspicious visitors.  

These are just the high points of how we use data to provide valuable insights to our clients. Check out the book if you would like to read our complete story – along with many other relevant case studies. You’ll glean lots of useful ideas about how you can monetize your data, and get a sense for the immense historical impact of organizational intelligence.