Risk Detection: Let Device Intelligence Make A Difference!
In 2023 alone, global retail e-commerce has reached an estimated value of 6.8 trillion USD, with projections of a 39 percent growth in the coming years (Statista). However, growing e-commerce and online payment activities is seen to increase the likelihood of online fraud, with continuously evolving tactics.
To face this complex threat, many fraud detection and prevention tools have been developed and introduced to mitigate fraud attacks, and different solutions have their distinctive features and benefits, applying to various online scenarios. This comes as both an advantage and a challenge for financial institutions, especially in figuring out which solution is suitable for their concerns and use cases.
In this new series “Fraud Risk Detection”, we will be diving deeper into the different features of our AI-powered Fraud Detection System Veri-id, while exploring the many use cases that it can be applied into, to help your institution eliminate online fraud and achieve impactful business results.
What is Veri-id?
Veri-id is our very own in-house developed system designed to equip financial institutions and online platforms with the capability to detect fraud early, and in turn, prevent them.
The Smart Fraud Detection System is backed by AI/Machine Learning algorithms and models that establishes a powerful ground of insights and year-round protective shield for your institution. Veri-id consists of five main components that are Device Fingerprint (based on the concept of Device Intelligence), Explainable AI, Rule Engine, Scheduling Schemes, and Data Visualization.
Why do we develop Veri-id?
With over 20 years developing and providing solutions to help institutions prevent fraud attacks, Veri-id is the innovative tool that we have designed to look at suspicious transactions in even more detail. While developing Veri-id’s infrastructure, we have put ourselves into different perspectives: from your business’, and your customers’.
From this approach, we were able to understand that businesses, despite having security concerns, also care about the customer experience since bad ones are known to cost you customer churn. On the customer’s side, we witness the strong preference for more convenient but credible platforms, allowing for quick purchases, without going through too many steps – which could cause cart abandonment.
By looking at the digital payment and e-commerce customer journey from both sides, we have managed to develop a solution that ensures utmost protection against fraud based on transparent data, while maintaining great customer experience that will help your business stand out in the market.
What is Device Intelligence?
In this section, we will explore Device Fingerprint – the heart of our Smart Fraud Detection system. Before then, we would like to introduce you to Device Intelligence – a process that is crucial to detecting suspicious activities resembling online fraud.
Device Intelligence is the process of collecting device related information, analyzing them, and serving as the fundamental technique to help businesses identify users, hence unveiling potential fraudulent behaviors. While different solution providers have their own technology in tackling fraud, at HiTRUST, we strongly believe that a user’s device says a lot about them.
Within our Smart Fraud Detection system, device intelligence is portrayed by our patented Device Identity Identification Analysis (DiiA) to provide the fundamental insights into your customer even before they reach the last step of the journey.
DiiA, Veri-id Device Fingerprint
If you think of us humans, there are certain physical characteristics that can help other people and systems to identify that we are uniquely ourselves. Those can be your DNA, iris, facial features, fingerprint, the list goes on. For Veri-id, we have utilized the same concept to identify each device from another, in which the industry refers to as Device Fingerprint.
How It Works
This method allows Veri-id device fingerprint to act as the unique identifier for each visiting device which can be tracked and reviewed over time. With collection of up to 100 device attributes, information from the DiiA is categorized into different groups, including hardware, operating system, IP address, browser, and abnormal behavior.
After being collected, these compiled data points play an important role in helping Veri-id detect abnormalities. For example, a user comes from the United States and usually makes daily purchases at the groceries stores, coffee shops, and local department stores, then all of a sudden, their device fingerprint shows their location as Singapore, using a VPN that originates from China, all of these information might indicate something abnormal is happening.
If the customer’s historical data indicates that they have been making purchases related to traveling, such as air tickets from the United States to Singapore, and/or hotel reservation transactions in Singapore, then the card issuer might be able to understand that this person is outside of their usual location because they are traveling.
Contrastingly, if the historical data reveals no change in location, it may indicate that the transaction is of high risk and the issuer can request for step-up authentication or decline the transaction, depending on the risk level (reflected as a “score” by Veri-id) and their risk policy.
The Role of Device Fingerprints
As part of the risk decision process is explained for suspicious transactions, we can see that Device Fingerprinting technology plays a vital role in detecting discrepancy and abnormalities directly from the user device. By collecting and providing institution users more access to time-sensitive information, your organization can take proactive actions to stop fraud before they happen.
The biggest advantage of this component is that your institution will not need to include any additional step or process to collect device information. Besides, device information collection, when applied into your system, begins as soon as the user enters the site/ platform and logs in, providing a comprehensive, all-in-one layer of protection against fraudulent attacks.
DiiA is amazing, but it's not all that Veri-id holds
As previously mentioned, although the Device Fingerprint DiiA allows your institution to take a deeper dive into device-related information, there are other aspects of Veri-id that will take your fraud prevention program to another level.
As a developer and provider of online payment security in Asia, HiTRUST puts safety and user experience at the forefront. Explore more on Veri-id’s Explainable AI, Rule Engine, Scheduling Schemes, and Data Visualization components and how they can work together to help detect risks early and prevent fraud.
