This document summarizes a webinar presented by Eddie Glenn on fraud trends in financial services. It outlines the top fraud trends seen in different financial services segments in 2017, including loan defaults, true identity theft, and account takeovers. The document then discusses how iovation processed over 4.6 billion financial services transactions in 2017 and stopped 127 million fraudulent transactions using device intelligence and a global device intelligence network. Finally, it presents iovation's solutions for applying for credit, login verification, and stopping fraudulent transactions using risk-based authentication and a collaborative device intelligence network.

1. EDDIE GLENN, SENIOR PRODUCT MARKETING MANAGER
eddie.glenn@iovation.com
MARCH 2018
FRAUD TRENDS
IN FINANCIAL SERVICES
WEBINAR

2. 2
FINANCIAL SERVICES SEGMENTS
SHORT
TERM LENDING
CREDIT
ISSUANCE
PREPAID
CARDS
MONEY
SERVICES
RETAIL
BANKING
PAYMENT
SERVICES

3. 3

4. 4
iovation makes
the internet a safer
place by
recognizing any
online device and
understanding its
risk and reputation.
We create
confidence by
balancing the
assurance our
customers need
with the
experience their
users demand.

5. TRENDS

6. 6
ONLINE SECURITYONLINE FRAUD
Credit card fraud
Loan Defaults
1st Party App Fraud
True ID Theft
3rd Party App Fraud
Account takeover
Breached credentials
Spoofing
Unauthorized access
Replay attack
YOUR CUSTOMER

7. 7
$3.2 $3.3
$4.0 $4.4
$5.5 $5.9
$1.4 $1.6
$1.9
$2.2
$2.5
$2.8
$0.6
$0.7
$0.8
$0.8
$0.9
$1.0
2015 2016 e2017 e2018 e2019 e2020
U.S. ATO, CNP, and Application Fraud Growth, 2015 to e2020
(In US$ Billions)
ATO fraud
Application
fraud
CNP fraud
Source: Aite Group, 2017
FINANCIAL SERVICES FRAUD
U S A T O , C N P , A N D A P P L I C A T I O N F R A U D G R O W T H , 2 0 1 5 t o e 2 0 2 0 ( i n U S D
B i l l i o n s )

8. 8
IOVATION AND FINANCIAL SERVICES
IOVATION PROCESSED
4.6B
FINANCIAL SERVICES
TRANSACTIONS
STOPPING
127M
FRAUDULENT TRANSACTIONS
IN 2017

9. 9
IOVATION AND FINANCIAL SERVICESIN 2017
True ID Theft
Loan Default
1st Party
Application Fraud
Synthetic ID
Fraud
Scammer
FRAUD TRENDS
REPORTED BY OUR
FINANCIAL SERVICES
CUSTOMERS

10. 10
TOP FRAUD TRENDS
S E E N B Y I O V A T I O N S U B S C R I B E R S - 2 0 1 7
SHORT
TERM LENDING
CREDIT
ISSUANCE
PREPAID
CARDS
MONEY
SERVICES
RETAIL
BANKING
PAYMENT
SERVICES
 Loan Default
 True ID Theft
 ACH/Debit Fraud
 1st Party App Fraud
 Synthetic ID Fraud
 Counterfeit MO
 True ID Theft
 ATO
 Synthetic ID Fraud
 ATO
 1st Party Fraud
 3rd Party App Fraud
 Scammer
 True ID Theft
 ATO
 1st Party App Fraud
 Synthetic ID Fraud
 Counterfeit MO

11. SOLUTIONS

12. 12
APPLY
FOR
INSTANT
CREDIT
IOVATION DEVICE INTELLIGENCE
APPLY
Device risks
Device behavior
Device reputation
Device associations
PROTECT ANY INTERACTION
 Loan origination
 Credit app
 Login
 Payment
 Money Transfer

13. 13
DEVICE RISKS & BEHAVIOR
 Context:
 Is device in a risky geolocation?
 Are there geo-location inconsistencies?
 Characteristics:
 Are device attributes consistent?
 Are there device anomalies?
 Are there known risky attributes?
 Behavior:
 Is this a new device?
 Is transaction volume high?
 Is device being evasive?
 Machine Learning:
 Are there subtle risk patterns?

14. 14
 5B known devices
 Global consortium of over 4,000 analysts
 Submits a fraud report when fraud is confirmed
 45+ types of fraud, abuse, and policy
violations
 49M+ confirmed fraud reports
1st/3rd Party
Application
Fraud
1st/3rd Party
Claims
Fraud
Stolen /
Synthetic
Identity
Fraud
Stolen /
Synthetic
Identity
Fraud
Shipping
Fraud
Affiliate
Fraud
Loan
Default
Cheating &
Promotion
Abuse
Policy
Violations
Account
Takeover
Chat
Abuse
Gold
Farming
DEVICE REPUTATION

15. 15
DEVICE AND ACCOUNT ASSOCIATIONS
P A T E N T E D “ D E V I C E W E B ” T E C H N O L O G Y R E V E A L S H I D D E N
A S S O C I A T I O N S
ASSOCIATION
ASSOCIATION
A user account
on a mobile
or web app
Credit App #528
Credit App #921
Credit App #150
 Is this new account or
credit application fraud?
 Or just a public computer being used?
FRAUD
 Get notified if a global velocity of
transactions is exceeded for a device
 Or block new transactions if any of
our clients have previously reported
fraud
Flagged Credit App

16. 16
DEVICE AND ACCOUNT ASSOCIATIONS
ASSOCIATION
ASSOCIATION
A user account
on a mobile
or web app
Credit App #528
Credit App #921
Credit App #150
 The fraudster now knows that the
device they are using is being blocked
FRAUD
 …so they switch to another one
Blocked
transaction
Blocked
transaction
 And through the power of associated
fraud, transactions can now be
blocked from this device too
P A T E N T E D “ D E V I C E W E B ” T E C H N O L O G Y R E V E A L S H I D D E N
A S S O C I A T I O N S

17. 17
LOAN/CREDIT APP AND HIGH RISK
TRANSACTIONS
I O V A T I O N I N F O R M S Y O U :
Is this device associated with past application fraud?
Is this device associated with a past loan default?
Are any device risk factors present: location, jailbroken,
evasion, velocity, other inconsistencies?
Is this device associated with past credit card fraud?
Has this device been seen before?
How many applications have been created recently?
SUBMIT

18. 18
LOGIN
I O V A T I O N I N F O R M S Y O U :
If not, then authenticate it?
Is this your customer’s device?
Is this device authorized to login to this account?
Is this device coming from a different geolocation?
Are any device changes within your specified parameters?
Are any device risk factors present: location, jailbroken,
evasion, velocity, past fraud, other inconsistencies?
SUBMIT

19. 19
STOPPING FRAUDULENT TRANSACTIONS
I O V A T I O N F I N A N C I A L C U S T O M E R S 2 0 1 7
device reputation
compound
velocity
risk profile
age based
geolocation anomaly
watch list

20. 20
MULTIFACTOR AUTHENTICATION
LaunchKey
On-demand multifactor authentication that’s
strong, usable, and fully customizable.
RISK MITIGATION
FraudForce
Real time fraud prevention based
on world class device intelligence.
TRUST INSIGHT
SureScore
Machine learning identifies valuable customers,
reduces review and accelerates revenue.
DEVICE-BASED AUTHENTICATION
ClearKey
Transparent device-based authentication for
outstanding user experience.

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SUMMARY
ADVANCED DEVICE
INTELLIGENCE
Common platform for
authentication and fraud
preventon
Industry leading device
recognition
Hundreds of device &
transaction details
Global perspective
EXCEPTIONAL
SERVICE AND
RELIABILITY
Advanced architecture delivers
real-time response with proven
reliability
Our customer service ensures
your success
Protecting Financial Services
since 2004
COLLABORATIVE DEVICE
INTELLIGENCE NETWORK
4,000 fraud & security analysts
Cross-subscriber shared
device intelligence
Detailed fraud reports
GDPR Compliant

23. Q&A
THANK YOU!