March 25, 2015 – WIRED Innovation Insights: Where Should Fraud Detection Start? Shifting the Focus from Check-Out to Account Creation
by Ryan Wilk
NuData Security’s Ryan Wilk, Director of Customer Success, makes the case for judging whether fraud is occurring not at the snapshot of one point in time but by the entire range of the user’s behavior from account creation up until checkout.
Online fraud, from the merchant’s standpoint, is defined as someone other than you spending your money online. As the purchaser, you have a credit card with a secret code on the back that you only know if you possess the card. You type in your card information and your secret code, and then the retailer runs the numbers to see if your credit card checks out. Retailers left that task to the banks and credit card companies, and that became the standard strategy as online shopping started to ramp up in the ’90s.
As time went on, sales and marketing teams realized that asking the user for any additional information, like that security code, resulted in lost sales. Marketers within retail shopping portals constantly pushed for new ways to safely and securely store customer data in order to reduce customer friction and make the order confirmation path as smooth and speedy as possible.
But for each additional marketing-driven change, fraud teams felt the knock-on effects in the form of new challenges. The architecture of online shopping changed fundamentally. Instead of checking the card at transaction, the fraud test shifted to the user account, which holds all your sensitive information secured by a password.
For the full article, head over to the WIRED Innovation Insight blog here.