You’re fighting a multifront war on fraud—do you have a modern arsenal?
As both ecommerce opportunities and risks have risen on the same tide, fraud has become a factor wherever business is done online. In fact, our recent study found that digital businesses contend with the equivalent of one full day of short, high-speed attacks every other week.
With global losses from online fraud increasing from an estimated $17.5 billion in 2020 to a projected $48 billion by the end of 2023, it’s an endlessly growing threat.
Making matters more difficult is the simple fact that businesses must wage a multifront war on fraud. Effective fraudster attacks manifest in different ways and often at the same time.
There’s no silver bullet in the war on fraud, especially as you try to balance the cost of added friction. But behavioral analytics comes close when deployed strategically and preemptively. Industry data shows that it’s the best way to stay one step ahead of fraudsters and the increasingly sophisticated tricks they use to erode and exploit your security infrastructure and protocols.
Let’s take a crowd-level-view of advanced fraudster tactics to better understand what the battlefield of fraud looks like today, and how NeuroID’s behavioral analytics-fueled technology can protect you—and your genuine users—without collecting personal identification information or compromising your valued customers’ experience.
Snapshot of online fraud today
NeuroID recently conducted targeted quantitative studies of customers to help digital businesses understand what various types of fraud look like when deployed and provide insights into how best to prepare and respond to attacks when they occur. These studies uncovered a variety of insights into key characteristics like frequency, velocity, and intensity of fraud attacks and provided helpful data on what particular types of fraud can look like in practice. These studies also illustrated what our customers already know: fraud comes in many forms, from the odd wolf-in-sheep’s clothing to full on packs of digital predators.
The spectrum of attacks, from bad actors to trained battalions
The most common tactics in online fraud today run the spectrum of quiet, hard-to-detect ambient fraud that flies under the radar to high-volume, high-intensity attacks. They may be highly coordinated or leveled by unconnected individuals.
Ambient fraud is the kind of continuous activity commonly used by fraudsters to test and probe the defenses and safeguards put in place by orgs to verify legitimate form-fillers and filter out the rest. It requires constant vigilance against the sum of many unconnected parts, making it hard to detect and track. Fraud ring attacks, on the other hand, are highly-coordinated group efforts to quietly exploit known weaknesses with proven tactics. Sophisticated fraud ring attacks may go undetected as fraudsters share information and combine efforts. High velocity attacks are anything but quiet—they are intense, full-blown assaults meant to overwhelm defenses and inflict costly damage quickly. These attacks are typically easy to recognize, but hard to stop.
Making matters more complex, any of the types of activities just described may be automated and scaled up with the use of purpose-built bots that can level attacks with more velocity and consistency than any human ever could.
Though these activities differ from one another in many ways, our research uncovered one crucial fact: 100% of the fraudulent bot activities observed during our studies originated with some human activity from the start. Real people are still applying pressure to find weaknesses. Thankfully, subsequent activities look nothing like what a human would, or even could, execute on their own.
If you’d like to learn more about how bot attacks are deployed today, be sure to read the second edition in our research report series, Emerging Trends in Bot Attacks.
Monitor behavior, not personal data
To understand why behavior analytics is so effective in identifying fraud, let’s look at a representative example from a NeuroID customer.
This payment processing company noticed some suspicious activities focused on its account sign-up page.
While monitoring one consumer finance manager’s digital application process, NeuroID identified a marked increase in both human users and bots over a 3-week period. Activity associated with “risky” human users rose from 11% to 18% over that time period, as well as steep increases in automated users.
One particular behavior gave the game away. Even the human users marked “risky” were completing forms faster than humanly possible. Taken together, it became clear that bad actors were utilizing both manual shortcuts and bots to quickly fill forms, either manually through copy/paste or via scripts written for automated bots.
In sum, these behaviors uncovered a multi-phase plan to quietly test and compile fraudulent credentials and other validation criteria before unleashing an all-out bot attack. Importantly, these preventative indicators were surfaced without collecting any personal information, for either legitimate or illegitimate applicants. Instead, we simply used behavioral analytics to observe and collect data on behavior—and behavior doesn’t lie.
Behavior analytics where you need it most: on the front line
Online fraud will only continue to get more sophisticated. Behavioral analytics can help you stay vigilant so you can preempt attacks or quickly shut them down.
As effective approaches like fraud rings and bot attacks are increasingly deployed from all angles, tools like NeuroID’s ID Crowd Alert™ solution can alert you quickly to suspicious activity and save you millions in fraud-related losses.
It’s never too late to fortify your business against online fraud. Behavioral analytics can help. Are you ready to get started?