Balancing Security and Customer Experience
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Using Device Insight to Balance Fraud Prevention and Customer Experience Today, your customer’s device has become their proxy for a large percentage of their online retail and banking activity. By using insight from those devices, you can reduce risk and ensure a smooth experience along the entire customer journey. In this webinar, you’ll learn from Max Anhoury, our VP of Global partnerships, about: * Today’s fraud and security trends * What a fraud ring looks like * The evolving online experience with EMV * How to create frictionless security across the consumer journey
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Balancing Security and Customer Experience
- 1. WEBINAR BALANCING SECURITY & CUSTOMER EXPERIENCE 7/19/16 MAX ANHOURY , VP, Global Partnerships
- 2. AGENDA 2 n Introduction n Fraud & Security Trends n Frictionless Security Across the Consumer Journey n Summary
- 3. 3 IOVATION INC. SOLUTIONS: Authentication and Fraud Prevention CUSTOMERS:450+, 6 Continents, 18 Time Zones FOUNDED: 2004 CUSTOMERRETENTION: 96% HEADQUARTERS: Portland, Oregon EMPLOYEES: 125 INVESTORS: Intel Capital, Sapphire Ventures COMMUNITY: 3,500 Fraud Professionals TOTAL TRANSACTIONS: 20B BRANDS PROTECTED:1,500+
- 4. 4 Every device tells a story. What stories do you care about? Am I authorized for this account? Where am I located? Do I have a fraud history? What other devices does this consumer have? How many accounts have I accessed? Am I hiding from detection?
- 5. 5 If a device can connect to the internet, we can recognize it.
- 6. 6 Which device is this? Is it associated with bad devices? Are there real time risk indicators? Is it associated with abuse? DEEP DEVICE INTELLIGENCE: BEYOND DEVICE RECOGNITION
- 8. STOPPING A FRAUD RING IN SO. CA.
- 9. 9 Ø 150 transactions Ø 50 Transactions Ø 20 transactions Ø 10 transactions ✪ ✪ ¤ ¤ AT 30 , 0 0 0 F T, THE F RAUD RING L OOKS L IKE THIS
- 10. 10 T H E T R E N D OF T R A N SA C T ION A C T IV IT Y OV E R T IME 0 10 20 30 40 50 60 15 16 17 18 19 20 21 22 23 24 25 TransactionCount Week Credit Bureaus Financial Institutions Retail Other actual activity noted with dashed lines
- 11. 11 Results of activity over 4 months • Searched for devices matching this profile: • Devices with activity with 3 or more subscribers • 2 of 3 subscribers within financial services industry • Devices with fraud histories from at least 2 subscribers 2K+ ACTIVE DEVICES 100K+ TRANSACTIONS 50K ACCOUNTS Performing Involving $ Step 1: Search existing fraud activity
- 12. 12 Step 2: Review account and transaction velocity Count of Devices Average Accounts Accessed Average Total Transactions Average Subscriber Count % with Credit Bureau Activity All Devices Profiled 2,126 23 47 9 43% 20+ Accounts Accessed 880 40 79 12 55% Highest was 259 accts accessed by single device 100+ Total Transactions 211 64 165 15 66% 2 devices had over 1,300 transactions attempted +10 Transactions/ Day 61 29 89 7 37% Highest trans/day was 659 (21 trans. in 44 minutes)
- 13. 13 Step 3: Associate devices & activity using data from our global network of our subscribers The group expands from 50k to 300k accounts ~16K+ ACTIVE DEVICES ~670K+ TRANSACTIONS ~300K ACCOUNTS Performing Involving $
- 14. 14 • This device is associated with 13 additional devices through common account access. • Then we reviewed the prior history to understand the connected activity. Step 4: Investigate details on an individual device
- 15. 15 • The 28 new account apps from Riverside were across 8 subscribers, demonstrating the effort taken to monetize stolen credentials. • Additional activity not accounted for above: 3 Credit Report access attempts from another Riverside address on 4/27 2 Credit Card Apps and 3 Login attempts from Whittier, CA (near Whittier College) on 5/17 4 Credit Card Apps and 18 Credit Report access attempts from a T-Mobile cell connection Subscriber Industry Transaction Type Riverside, CA Mira Loma, CA Univ of California – Riverside Totals Financial Services New Acct Application Online Account Login 28 28 5 1 1 34 29 Credit Reporting Agency Access Attempt 227 9 14 250 Retail Purchase 2 14 16 Telecommunications Online Account Login 1 1 Travel Purchase 2 2 Device Activity Step 5: compile fraud activity by location
- 16. 16 Ø 150 transactions Ø 50 Transactions Ø 20 transactions Ø 10 transactions ✪ ✪ ¤ ¤ AT 30 , 0 0 0 F T, THE F RAUD RING L OOKS L IKE THIS
- 17. 17 T H E T R E N D OF T R A N SA C T ION A C T IV IT Y OV E R T IME 0 10 20 30 40 50 60 15 16 17 18 19 20 21 22 23 24 25 TransactionCount Week Credit Bureaus Financial Institutions Retail Other actual activity noted with dashed lines
- 19. 19 are using a password that is 47% 77% 5+ YEARS OLD 1+ YEARS OLD are using a password that is
- 21. 21 Record high for data breaches TARGET EBAY ADOBESONY 70M 10M 145M 152M 1.32 BILLION RECORDS EXPOSED IDENTITY THEFT RESOURCE CENTER HOME DEPOT 56M MySpace Tumblr Fling LinkedIn 642M
- 22. 22 DATA BREACHES $5B in 2014 $8B in 2018 Data breaches will drive a 60% increase in Account Takeover and New Account Fraud. 60% SOURCE: JAVELIN, 2015 INCREASE
- 23. 23 F RAUD F ROM IDENTITY THEF T
- 24. 24 GROWTH IN SYNTHETIC F RAUD ATTEMPTS For a blend of consumer loan issuers, syntheticidentity frauds were 4X more frequent than true identity fraud (1st Party & 3rd Party) Contributing Factors Appeal of victim-less fraud SSN Randomization Increasing availability of valid PII 0% 2% 4% 6% 8% 10% 12% 14% 2010 2011 2012 2013 2014 2015 Synthetic Fraud Rate "True Identity" Fraud Rate SSN Randomization takes effect © 2016 ID Analytics
- 26. 26 Every online transaction is a potential source of risk. ACCOUNT CREATION LOGIN BROWSE STORE PURCHASE USE REWARD POINTS CHANGE ACCOUNT DETAILS
- 28. 28 ACCOUNT CREATION LOGIN BROWSE STORE PURCHASE USE REWARD POINTS CHANGE ACCOUNT DETAILS Mobile devices are proliferating and becoming an extension of your customers.
- 29. 29 LOGIN CHANGE ACCOUNTDETAILS ADD ITEMS TO SHOPPING CART REDEEM REWARDS POINTS Your customers expect a frictionless user experience across multiple channels: web, mobile web, mobile app ACCOUNT CREATION PURCHASEVIEW ORDER BROWSE CATALOG Your business depends on happy customers balanced with minimizing fraud risks and security TYPICAL CONSUMER JOURNEY FOR ONLINE RETAIL
- 30. 30 LOGIN CHANGE ACCOUNTDETAILS CHECK BALANCE VISITBRANCH OR CONTACT CALL CENTER LOAN ORIGINATION OR ACCOUNTCREATION CHECK BALANCE, DEPOSIT, PAYMENT WITHDRAWAL, TRANSFER TYPICAL CONSUMER JOURNEY FOR FINANCIAL SERVICES
- 31. 31 LOGIN CHANGE ACCOUNTDETAILS ADD ITEMS TO SHOPPING CART REDEEM REWARDS POINTS ACCOUNT CREATION PURCHASEVIEW ORDER BROWSE CATALOG Your business depends on happy customers balanced with minimizing fraud risks and security Device Intelligence can help achieve this balance Your customers expect a frictionless user experience across multiple channels: web, mobile web, mobile app
- 32. 32 AUTHORIZED FOR ACCOUNT HISTORICAL REPUTATION ANOMALOUS BEHAVIOR SECURITY RISK INDICATORS LINKSAND ASSOCIATIONS Use the device as the invisible second factor. Device intelligence can be used for frictionless authentication.
- 33. 33 The benefit of using device intelligence across the consumer online journey
- 34. 34 Concerns: Fraud prevention: 1st or 3rd party account creation fraud Device Intelligence Indicators • High velocity rate • Previous associated fraud evidence • Geo-location • Device evasion • History of device Application Origination
- 35. 35 Application Origination “Since we deployed iovation, we have experienced dramatically lower fraud losses resulting from the online credit card application channel.” -- CristinaKoder, Fraud Operations Supervisor Significant reduction in fraudulent credit applications iovation helped: n Link fraudulent devices and accounts together n Determine real location vs stated location Case Study: Financial Services Challenges: n Fraudsters applying for credit with stolen identity n Risky transactions coming from multiple geographies
- 36. 36 AUTHORIZED FOR ACCOUNT HISTORICAL REPUTATION ANOMALOUS BEHAVIOR SECURITY RISK INDICATORS LINKSAND ASSOCIATIONS Device-based Authentication Use the device as the invisible second factor.
- 37. 37 PASSWORD-BASED AUTHENTICATION STEP UP 1-Factor Experience & 2-Factor Security Users expect a low-friction authentication experience for most logins. Interacting with a 2nd factor of authentication is not low-friction. 1-FACTOR 2-FACTOR Desired User Experience Required Security
- 38. 38 Concerns: n Stolen payment credentials n International fraud rings n Chargebacks Device Intelligence Indicators n High velocity rate n Links to other accounts and devices n Previous associated fraud evidence n Geo-location n Device evasion n History of device Guest Checkout
- 39. 39 “iovation’s device reputation technology adds an incredibly important layer of protection to our fraud efforts” -- Fraud Manager reduction in order fraud n iovation helped: n Find and link previously unrelated accounts & devices n Reduce manual reviews n Identify & stop high-risk transactions Case Study: Electronics Retailer n Challenges: n Fraudsters constantly evolve new techniques to escape detection n Stolen payment credentials n Hard to shut down international fraud rings Guest Checkout 25%
- 40. 40 Our story starts with a stolen identity…
- 41. 41 Within just a few days… charged over $5,000 in online purchases
- 42. 42 The device had a history…
- 44. 44 The fraudster was arrested.
- 45. 45 15 identity theft victims 20 major retailers targeted with CNP fraud 60 credit apps $70K restitution $100K in projected losses 1 Person Fraud Ring
- 46. 46 LOGIN CHANGE ACCOUNTDETAILS CHECK BALANCE WITHDRAWAL, FUND TRANSFER iovation helps you balance security with user experience across the consumer journey LOAN ORIGINATION OR ACCOUNTCREATION CHECK BALANCE, DEPOSIT MAKE PAYMENTS CUSTOMER AUTHENTICATION FRAUD PREVENTION
- 47. Q&A
- 48. 48 ANNUAL F RAUD F ORCE SUMMIT R EGISTER @ www.fraudforcesummit.com U S E P R O M O C O D E ‘ w e b i n a r 1 0 0 ’ T O S A V E $ 1 0 0 K E Y N O T E SPE AK E R : THERESA PAYTON FORMER WHITE HOUSE CIO
- 49. 49 THANK YOU!