The New Fraud Frontier: Using Mobile Data to Fight Fraud
13 Jun 2017
Mobile: The New Fraud Frontier
Legends tell of a time when we weren’t glued to our smartphones…but that was long, long ago. Now, 98% of American Millennials own a mobile device. These devices aren’t just for making phone calls anymore; phones are vital to the way we do business, navigate the world, and create our identities.
Consumers aren’t the only ones who’ve recognized the importance of mobile, though: fraudsters have, too. Merchants who accept mobile payments always suffer higher fraud rates. In many ways, mobile is the newest frontier for fraud.
Customer Data: Your Best Defense
How can you protect your customers in these uncharted waters? As it turns out, the tool you need to prevent mobile fraud is already in your possession: your customers’ data. The data you collect throughout the customer experience can enhance your fraud prevention efforts, helping create a frictionless and pleasant experience for your customers. Here are five sources of mobile-specific customer data that you can leverage to fight fraud.
1. How many apps are on the phone?
The average smartphone owner has 26 apps installed on their phone. But fraudsters usually have far fewer.
2. Is the phone jailbroken or rooted?
Fraudsters who use their phones for nefarious schemes often jailbreak or root their devices. Jailbreaking an Apple device involves removing limitations that the manufacturer put in place, allowing fraudsters to use unapproved software and perform non-recommended tasks. Rooting is similar, permitting fraudsters (or other hackers) to bypass Android’s security architecture. Just because a device is jailbroken or rooted doesn’t necessarily mean that a fraudster is using it, but it’s a good clue.
3. What kind of phone is it?
Fraudsters prefer older, more rudimentary phones. They’re cheap and easy to discard if the authorities are hot on the fraudster’s trail.
4. Which version of your app is being used?
As you improve your app, you probably release periodic patches and updates aimed at reducing security vulnerabilities. In many cases, customers fall prey to fraud because they’ve failed to update the apps on their phones. Similarly, fraudsters rely on older versions of your app to exploit security loopholes.
5. How is the user behaving?
Biometrics can be powerful clues when you’re on the hunt for fraudsters. Is the user swiping or typing? Are they typing rhythmically or erratically? This data might seem trivial or anecdotal, but it can actually help you figure out whether you’re dealing with a human or a bot. Humans prefer swiping to typing, while bots type more evenly and systematically than humans.
Telling Your Fraud Story
While these data points are all good indicators that a fraudster might be interacting with your business, they’re clues – not guarantees. Data is a language, not a story.
But how do you piece together this data to form a coherent fraud story? The key is to have a robust fraud solution. Sift Science ingests multiple types of data in one machine learning platform. By leveraging data collected across all stages of the customer journey, Sift Science helps you understand your users by providing them with highly accurate risk scores, even if they’ve never visited your site or app before.