Web Fraud Prevention, Identity Verification & Authentication Guide 2018 2019 Prevention

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Web Fraud Prevention, Identity Verification
& Authentication Guide 2018-2019
LATEST INSIGHTS INTO DIGITAL ONBOARDING AND FRAUD MITIGATION FOR
BANKS, MERCHANTS AND PSPS

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Web Fraud Prevention, Identity Verification
& Authentication Guide 2018-2019
LATEST INSIGHTS INTO DIGITAL ONBOARDING AND FRAUD MITIGATION
FOR BANKS, MERCHANTS AND PSPS

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RELEASE VERSION 1.0
DECEMBER 2018
COPYRIGHT © THE PAYPERS BV
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Editor’s letter
Customer experience and the conflict between offering a fric

However, fraud attacks are becoming more sophisticated, with

tionless customer service to good clients while managing risk

fraudsters having access to the latest technology and sophisticated

and blocking the bad guys are some themes that are emerging

tools. Therefore, what is really needed? A fraud management

from acquirers, card schemes, regulators, service providers,

solution can track the customer’s behavioural patterns (beha

merchants, as well as auditors and journalists alike.

vioural profiling) and instantly detect and report any signs
of fraud, triggering a step up authentication to mitigate the

Identifying fraudulent behaviour without rejecting or offending

potential risk (risk-based authentication).

good customers is key because a blocked good customer will
not return, and as the market is so competitive, they can go every

Similarly, when it comes to financial institutions (FIs), FIs

where. Moreover, automation technologies based on machine

are under intense competitive pressure to make the banking

learning and artificial intelligence are gaining prominence in this

experience easier and frictionless (while regulators in Europe

conversation. But, as always, some challenges in addressing these

appear to be taking the industry in a different direction, thanks to

themes, security-wise, still remain.

the second Payment Services Directive’s requirement for Strong
Customer Authentication).

The Web Fraud Prevention, Identity Verification &
Authentication Guide 2018-2019

The faceless nature of the online and mobile channels makes

To respond to some of these challenges, we have released our

authentication hard, however the large amounts of data that have

7th edition of the Web Fraud Prevention, Identity Verification

been breached in recent years combined with fraudsters’ use of

& Authentication Guide to provide payment and fraud and risk

phishing, social engineering, and malware make authentication

management professionals with a series of insightful perspectives

much more difficult. As a result, some of the top threats for 2018

from industry associations and leading market players on key

in ecommerce and banking are account takeover and new

aspects of the global digital identity, transactional and web fraud

account applications, according to Aite.

detection space.
For Europe especially, but also for the US, Canada and Australia,
The guide is structured in three parts; the first part focuses

in 2018, financial discussions revolved around Open Banking

on presenting the industry, with its most acute problems, but

initiatives. The concept of open banking promises users greater

also shares some best practices from industry leading players on

control over their financial data; however, it is not without risks,

how to tackle them. With the advent of digitalisation and the use

and its success is tied to consumer confidence when it comes

of smartphones, business and fraud coexist globally, both seen

to the security and privacy of their information.

as profitable activities, involving large masses of customers.
The surge in demand for many goods and services has enabled

At the moment, businesses have become incredibly dependent

not only businesses’ profits to soar but also fraudsters to

on a network of systems to manage, store, and transmit infor

capitalize on this growth. Bad actors are tricking retailers/

mation such as financial accounts, personally identifiable informa

merchants/banks by hiding beneath large transaction volumes

tion, intellectual property, transaction records etc. Within this web,

and exploiting the fact that many products and services providers

authentication, validation and verification have turned out to be

are willing to accept a greater degree of risk in order to approve

central to the ability of these businesses to effectively secure

more orders.

access to consumer-facing digital channels and the systems that
underpin their operations. ➔

Key challenges for businesses
One of the biggest challenges in the fraud detection space for
retailers/merchants is that for consumers, a transaction needs
to happen in the blink of an eye, and therefore fraud controls
should be invisible for them.

3

WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

The right tools for fighting fraud

Conclusion

The second part of our Web Fraud Prevention, Identity Verifi

Businesses may think they understand fraud, but the reality

cation & Authentication Guide 2018-2019 focuses on mapping

is far more complex, and this lack of insight could lead to

the key players in the fraud detection, identity verification

guessing, incorrect conclusions, and bad decisions. Premises

and online authentication space. The chapter aims to create

such as the fraudsters as geeky guys, conducting their activi

an accurate picture of what the fraud detection, identity

ties at night in their basements, and living somewhere in

verification and online authentication offerings looks like, and

Eastern Europe, or that ATOs are relatively low profile events

it displays the key players of the industry together with their

could shape businesses’ fraud-fighting operations from top to

main capabilities. Depicting the most important features of each

bottom. Moreover, these assumptions help determine how ana

company is part of our goal of helping merchants, banks, fintechs

lysts set up rules, how many people the fraud team hires and

and payment service providers to grasp the current market

staffs on a given day, and so on.

opportunities and to use them according to their own needs.
Therefore, security and risk management leaders responsible for
The whole range of capabilities is designed to address the pain

fraud prevention and payment security should align with cross-

points that organizations in the payments space are struggling

organisational groups (security, identity and access management,

to remove. To do so, security and risk management leaders

credit/underwriting) to detect high-risk or anomalous activity

involved in online fraud detection have started using machine-

and identity, and tap into technologies that enable fighting

learning analytics, cloud-based deployment options, artificial

against these threats. And if we consider the large amounts of

intelligence, behavioural analytics, and massive global data

harvested data, the capability of analysing and connecting

networks.

data across channels is vital for strong defence.

Such technologies generate real-time insights into the nuanced

Enjoy your reading!

patterns of fraud to enable businesses to spot and fight fraud.
These patterns are based on geography, industry, time of day,

Mirela Ciobanu

time of year, and over 15,000 other signals. Fraud management

Senior Editor, The Paypers

specialists/vendors have developed networks that analyse
millions of transactions in real time across billions of devices.
Finally, the third part of our Web Fraud Prevention guide, the
Company Profiles section, offers insights into the capabilities
fraud prevention companies offer businesses in order to spot
fraudulent attacks, stop them and prevent them from happening.
Obviously, we would like to express our appreciation to the
Merchant Risk Council and Holland FinTech – our endorsement
partners who have constantly supported us – and also to our
thought leaders, participating organisations and top industry
players that contributed to this edition, enriching it with valuable
insights and, thus, joining us in our constant endeavour to depict
an insightful picture of the industry.

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WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

Table of contents
4

Editor’s Letter: The Complex Faces of Risk Management and Fraud

8

1 Fraud Management – Trends and Developments

9

1.1 Overview on the Innovation Taking Place in the Fraud Management Space – Machine Learning and
Artificial Intelligence

10

The Rise of Machine Learning/Artificial intelligence in Fraud Detection – Introduction to ML&AI in Fraud Management |
Mirela Ciobanu, Senior Editor, The Paypers

14

Machine Learning Against Online Fraud: The Advantage of a Risk-Based Approach | Ralf Gladis, Co-Founder and CEO,
Computop

16

Why Implement a Fraud Management Solution that Combines Machine Learning with Rules? | Mark W. Hall, Sr. Director
Global Solutions Marketing, Fraud Management, CyberSource

18

Brick and Mortar Navigates Digital Transformation | Don Bush, Vice President of Marketing, Kount

20

Why a Machine Learning Based Approach to Mitigate This Risk Is Key in Fraud Prevention | Pavel Gnatenko,
Risk management expert, Covery

23

1.2 Best Practices in the Fraud Management Space

24

Collaboration Paving the Way for Ecommerce Customer Experience | Keith Briscoe, Chief Marketing Officer, Ethoca

26

Interview with RISK IDENT on the Challenges Merchants Face on Both Sides of the Atlantic | Felix Eckhardt,
Managing Director and CTO, Piet Mahler, COO, RISK IDENT

28

Are You Ready for the New Era of Online Payments? | Amador Testa, Chief Product Officer, Emailage

30

Account Takeover via Hacking Bots (The Rise of the Bots) | Neira Jones, Advisor and Ambassador, Emerging Payments
Association

32

Interview with MRC on the Way This Community Evolved to Support Merchants in Fighting Payments and Commerce
Fraud | Paul Kuykendal, CEO, Merchant Risk Council

35

1.3 Best Practices of Mitigating Fraud in Ecommerce - the State of Affairs in Ecommerce Verticals

36

Fraud in Ecommerce – Diagnosis and Treatment | Mirela Ciobanu, Senior Editor, The Paypers

38

Interview with Sift Science on Preventing Loyalty Fraud in Travelling | Kevin Lee, Trust and Safety Architect, Sift Science

40

Fraud in Airline Travel Industry – Airlines Need Better Anti-Fraud Data | Ronald Praetsch, Co-Founder and Managing
Director, about-fraud.com

42

Telecoms Fraud – The Impact of Digitalisation | Jason Lane-Sellers, President and Director, CFCA

44

Sim Swap Fraud – an Attack in Multiple Stages | Emma Mohan-Satta, Senior Fraud Manager, Capital on Tap

46

Interview with Ubisoft on the Status of Online Gaming Industry Fraud, with Insights into the Grey Market |
Sithy Phoutchanthavongsa, Fraud Expert, Ubisoft

48

With Low Order Volumes, Richemont Faces a Different Fraud Review Challenge | Leon Brown, Fraud and Payments
Manager, Richemont

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WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

Table of contents
51

1.4 Best Practices of Mitigating Fraud in Banking

52

Fraud Mitigation – Key Challenges for Banks | Mirela Ciobanu, Senior Editor, The Paypers

57

Machine Learning Innovations for Fighting Financial Crime in an Open Banking Era | Pedro Bizarro, Chief Science
Officer, Feedzai

59

Accertify and InAuth: Fighting Fraudulent Account Opening | Michael Lynch, Chief Strategy Officer, InAuth

61

Interview with Nordea on Cybercrime Trends and Fraud Management Solutions | Fraud Awareness and Communication
team of Nordea

63

2 Online Authentication – The Journey from Passwords and Secret Questions to
Zero Factor Authentication

64

An introduction to Online Authentication and Stronger Authentication | Mirela Ciobanu, Senior Editor, The Paypers

68

Reimagining Identity in the Post-Data Breach Era | Alisdair Faulkner, Chief Identity Officer, Business Services, ThreatMetrix,
a LexisNexis Risk Solutions company

70

Adaptive Authentication: Balance Opportunity and Risk in an Omnichannel World | Mathew Long, Senior Advisor,
Fraud & Risk Intelligence, RSA

72

Interview with HID Global on the Role Adaptive Authentication Plays within the Open Banking Ecosystem |
Olivier Thirion de Briel, Global Solution Marketing Director, HID Global

74

Seamless and Secure Online Authentication: A Solvable Goal? | Robert Holm, Senior Vice President Fraud Management,
Arvato Financial Solutions

76

Account Takeover and Step Up Authentication – True Customer Satisfaction Means Optimizing Experiences and
Relationships from Start to Finish | Andrew Gowasack, Cofounder and Managing Director, Trust Stamp

78

Interview with CA Technologies on PSD2, 3DS 2.0, and the New Authentication Landscape | James Rendell, Payment
Security Strategy and Product Management, CA Technologies

80

Complex Fraud Threats Call for Adaptive Detection Tools | Rahul Pangam, Co-Founder and CEO, Simility, a PayPal
Service

82

The Journey towards Zero Factor Authentication | Yinglian Xie, CEO and Co-founder, DataVisor

84

2019: The Push for Orchestrated Authentication | Julie Conroy, Research Director, Aite Group

86

Open Banking: Why a New Approach to Authentication Is Key to its Success | Brett McDowell, FIDO Alliance

88
89

3 Customer Onboarding and Digital Identity Verification
3.1 Customer Onboarding and Identity Verification

90

An introduction to Customer Onboarding and Digital Identity Verification | Mirela Ciobanu, Senior Editor, The Paypers

94

Interview with Melissa on Best Practices in KYC | Barley Laing, Managing Director, Melissa Global Intelligence

96

Hard Problems: Identity Verification, Fraud Prevention and the Giant Leap Towards Financial Inclusion | Zac Cohen,
General Manager, Trulioo

98

Digitising Complex Onboarding Processes: Who Will Be Leading in Getting It Right? | Josje Fiolet, Manager, Lead Digital
Onboarding, INNOPAY

100

Interview with Steve Cook on Latest Trends in Biometrics Technology and the Value of Biometric Authentication for
the KYC Process | Steve Cook, Independent Biometrics and Fintech Consultant

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WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

Table of contents
103

3.2 Digital Identity at Border: Between Standardisation and Innovation

104

Making Sense of Digital Identity | Steve Pannifer, COO, Consult Hyperion

106

eIDas – Its Role in Our Future | Jon Shamah, Chair, EEMA

108

Self-Sovereign Identity and Shared Ledger Technologies. A vanguard of a bright new digital identity world,
or an over-hyped innovation? | Ewan Willars, Senior Associate, Innovate Identity

110
111

4 The Regulatory Space

A Brief Summary of EBA Guidelines on Fraud Reporting Under the PSD2 | Irena Dajkovic, Partner of DALIR Law Firm

113

Reconciling Consent in PSD2 and GDPR | Niels Vandezande, Legal Consultant, Timelex

115

Bitcoin and AML: Regulating the New Mainstream | Nadja van der Veer, Co-Founder, PaymentCounsel

118

5 Fraud Detection, Identity Verification & Online Authentication –
Mapping and Infographic

119

5.1 Introduction

121

5.2 Fraud Detection, Identity Verification & Online Authentication – Infographic

122

5.3 Fraud Detection, Identity Verification & Online Authentication – Mapping of Key Players

144

6 Company Profiles

236

7 Glossary

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WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

Fraud Management –
Trends and Developments

Overview on the Innovation Taking Place
in the Fraud Management Space –
Machine Learning and Artificial Intelligence

The Rise of Machine Learning/
Artificial Intelligence in Fraud Detection
Mirela Ciobanu | Senior Editor | The Paypers
The lines are blurring between man and machine. As advances in AI, smart tech, and machine learning turn science
fiction into fact, a future once fantastical draws near now. How will the payments industry harness these mind-blowing
opportunities?
Artificial intelligence and machine learning have a wide array of applications, from improving customer experience to ena
bling businesses to fight fraud, from driving the creation of personalised shopping/user experiences by analysing multiple
data points to enabling businesses to stay compliant with the ever changing regulation landscape – KYC, AML. Moreover,
these emerging technologies have also been applied in medicine; popular AI solutions such as IBM’s Watson are actively
used in multiple cancer research hospitals, and they operate as a doctor’s assistant.
However, in this subchapter we will mostly focus on the ways in which these technologies can help fight fraud, manage
and mitigate risk, and enable companies to stay compliant with AML laws and fight transaction laundering.

Artificial intelligence
Artificial intelligence (AI), sometimes called machine intelligence, is intelligence demonstrated by machines, in contrast
to the natural intelligence displayed by humans and other animals. AI augments human intelligence and should provide
explanations to avoid erroneous interpretations, and its value should be considered in context, as definitive answers do
not exist, according to Pedro Bizarro, Chief Science Officer, Feedzai.
AI design principles should be transparency, controllability, and automation. Moreover, data provenance is a crucial feature,
as the user needs to keep track of data in order to be able to reconstruct it, and models should learn from real data, and
be able to re-learn, while not being influenced/based on previous models. Most importantly, we must create the means of
developing this tool in order for it to be human-enabled and human-centric.
According to Forbes, AI needs to be ‘Explainable’ and ‘Understandable’. Explainable AI is the domain of data scientists
and AI engineers, the individuals who create and code artificial intelligence algorithms. These specialists aim to develop
new algorithms that explain intermediate outcomes or provide reasoning for their solutions.
Understandable AI combines not only the technical expertise of engineers with the design usability knowledge of UI/UX
experts, but also the people-centric design of product developers. Explainable AI is different from understandable AI.
Since AI-driven solutions need to be developed with ‘user-first’ principles in mind, understandable AI has become the
domain of UI/UX designers and product developers, in collaboration with AI engineers and data scientists.
Critical to the understandable AI process are the integration of non-data scientists to the development and design of

AI products and enabling people to be a part of the decision-making process in an AI-driven enterprise. ➔

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WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

The Rise of Machine Learning/
Artificial Intelligence in Fraud Detection
To begin the journey towards a truly human-machine collaborative model that creates understandable AI outcomes,
leaders, governance bodies, and companies must:
- d evelop intuitive user interfaces – by using voice recognition and natural language processing, the technology
industry is currently developing AI user interfaces that enable people to interact with intelligent machines simply by
talking to them. By encouraging the development of these tools, the democratisation of AI technologies is encouraged;
- create ethical principles for AI – all major stakeholders in the future of AI need to work together to build principles that
embed understandability into technology development;
- apply design principles – enterprises should use design-led thinking to examine core ethical questions in context. In
addition, they are advised to build a set of value-driven requirements under which the AI will be deployed – including
where explanations for decisions are expected;
- monitor and audit – the AI solutions used at the enterprise level need to be continually improved through value-driven
metrics such as algorithmic accountability, bias, and cybersecurity.
When it comes to financial services, artificial intelligence can be applied to specific areas such as financial crime preven
tion, regulatory compliance, and payments. Successful AI projects rely on the deep amounts of research and work that
expertise developers put in, and the application to specific business problems, which can be used in multiple different
contexts. A critical element of AI systems is the data on which they are trained – it’s that combination of innovative AI
capabilities and deep domain expertise.
A fundamental concept of AI is machine learning – that is why sometimes these two technologies go intertwined.

Machine learning – an approach to fraud detection and protection
Machine learning, a form of artificial intelligence, combines data, context, and feature engineering to allow organisations
evaluate the risk of a particular digital interaction or purchase.
Machine learning is being used at many levels in the online fraud detection market. Some solutions are designed to
run alongside existing capabilities, taking in structured and unstructured data to identify anomalies, while others are
designed to provide a score and information codes that can be used by a real-time policy and decision engine.
A machine learning solution needs access to a big store of historical data to train its models and increase the probability
that it will uncover patterns of new suspicious activity. This technology has the potential to fight card-not-present fraud,
chargebacks, account takeover, transaction laundering, and more. Also, machine learning is implemented in solutions
such as device assessment, passive behavioural biometrics, bot detection, phone printing, and voice biometrics. ➔

11

WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

The Rise of Machine Learning/
Artificial Intelligence in Fraud Detection
With the waves of new and evolving fraud, Gartner has observed the increasing need of financial institutions and
enterprise-scale merchants for rapid and complex risk decisions, and businesses are turning to machine learning to gain
the ability to make rapid and effective risk decisions. However, with the increased number of machine-learning systems,
clients are demanding explanations, as well as decisions, with the aim of:
- controlling the machine – a model that explains its logic empowers security managers to adapt the model to evolving
fraud patterns with more speed and accuracy;
- auditing the machine – financial institutions and large merchants operate in highly regulated environments. These
organisations need to provide trails of explanations for compliance, to demonstrate that the basis for their decisions is
lawful and ethical;
- trusting the machine – a system is only as powerful as the decisions we entrust it to make. How can we trust that the
machine is finding the delicate balance between good risk management and good CX?
To achieve these goals, Gartner suggests that businesses should ensure that each model they develop incorporates
a capability to explain and, moreover, has a loop that provides feedback on the quality of the explanation. The second
method is to develop two systems – one that makes decisions and another that takes the input from the first system and
generates an explanation.
Here are some types of machine learning that can be deployed:
- Deep Learning – is a class of machine learning algorithms that use a cascade of multiple layers of nonlinear processing
units for feature extraction and transformation. Each successive layer uses the output from the previous layer as
input. These algorithms learn in supervised (eg classification) and/or unsupervised (eg pattern analysis) manners
and understand multiple levels of representations that correspond to different levels of abstraction; the levels form a
hierarchy of concepts.
– Ensemble Learning – ensemble methods use multiple learning algorithms to obtain better predictive performance than
could be obtained from any of the constituent learning algorithms alone.
– Unsupervised Learning – does not require outcomes, so it can learn without waiting for the completion of a threemonth chargeback reporting cycle, for example. This type of learning often relies on clustering, peer group analysis,
breakpoint analysis, or a combination of these. This enables fraud prevention solutions to detect patterns and anomalies
rapidly within extremely large sets of data.
- Supervised Learning – uses outcome-labelled training data sets to learn. Models include neural networks, Bayesian
classifiers, regression, decision trees, or an ensemble combination. Massive amounts of data run through defined
models to assess risk outcomes.

The power of supervised and unsupervised machine learning
There are two approaches that are used mostly by fraud prevention vendors – supervised and unsupervised learning, the
former approach being the most common and widespread. ➔

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WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

The Rise of Machine Learning/
Artificial Intelligence in Fraud Detection
Maxpay explains briefly how these systems interact to identify anomalies (outliers). With the supervised approach, in the
beginning, a risk analyst creates a machine learning model based upon historical data. Afterwards, with new transaction
data, the algorithm creates potentially right baskets: fraud and not fraud. After that, the system collects external signals
such as fraud alerts, chargebacks, complaints etc. Based on that information, the algorithm starts looking for new
unrecorded dependencies. Finally, the model starts retraining. Consequently, all the risk analysts are one step behind the
game, thus the cycle continues, and in time new techniques emerge.
Otherwise, unsupervised learning is regarded as an alternative to supervised learning. These algorithms infer patterns
from a dataset without reference to known or labelled outcomes. Unsupervised learning allows risk analysts to approach
problems with no exact idea about what the result will look like. One can derive structure from data where they don’t
necessarily know the effect of the variables. With unsupervised learning, there is no feedback based on the prediction
results. But it can divide data on the basis of anomalous behaviour and, afterwards, risk analysts can apply well-known
supervised approaches to this data.
Therefore, unsupervised machine learning is more applicable to real-world problems and can help solve them when risk
managers are one step behind the fraudsters.
As fraud prevention services use both rule-based and machine learning approaches, including unsupervised techniques,
we should also consider that there is a significant difference between fraud detection systems that directly use machinelearning systems and those that are essentially static, rule-based systems. Characteristics of the former type include
flexibility in response to new fraud attack patterns. The latter type benefits from keeping a human element in the change
control process, which makes it more resistant to skilfully crafted attacks that try to poison the model.
Some banks, merchants, retailers have traditionally relied upon rules-based fraud detection systems in order to counter
threats, such as leveraging weak points through coordinated attacks, but fraud advancements have outpaced the
capabilities of these systems.
According to Feedzai, rules-based systems tend to be either too broad or too narrow in scope to adequately address
fraud attack vectors, requiring financial institutions to combine multiple solutions into a single system to cover their
bases.
Surely, machine learning does not replace rules completely, but it complements them to expand the capabilities of the risk
management platform. Thus, when applied to large datasets, like those found in account opening analyses, these algo
rithms can pinpoint surprising and unintuitive fraud signals.

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WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

Computop
Machine Learning Against Online Fraud: The Advantage of a Risk-Based Approach

About Ralf Gladis: Ralf Gladis is the Co-Founder and CEO of the international payment service provider
Computop – the payment people. In addition, Ralf acts as non-executive Director at Computop, Inc in
New York. He is also responsible for the international expansion and strategic planning at Computop.

Ralf Gladis | Co-Founder and CEO | Computop

The increasing popularity of online shopping is creating new

The new generation of risk management that has been used

security risks in the transaction process. Data theft and payment

at Computop since the end of October 2018 is not only more

fraud are issues that consumers and merchants alike fear. If

flexible than before, but also more secure and efficient. The new

we look at the current status of online fraud, we see that data

Fraud Score Engine uses machine learning to automatically

breaches still represent a prevalent issue. Moreover, according

optimise fraud prevention and it eliminates the need for manual

to a research by the Identity Theft Resource Center and

intervention. The algorithm behind the risk cost calculation

CyberScout, 791 data leaks were reported from large companies

learns with each transaction and improves the accuracy of the

in the US from January to June 2017, with criminals stealing

risk assessment accordingly. If buyer behaviour changes and

credit card information amongst other things. This represents an

new fraud scenarios emerge, it adapts. A concrete example

increase of 29% over the first half of 2016 and exceeded the

illustrates this method:

781 cases reported for the full year 2015 in just six months.
Other studies confirm the trend: according to information service

Previously, the retailer made a yes/no decision in which various

provider Experian, the number of data leaks in ecommerce

factors were queried, for example: ‘If a transaction exceeds the

increased by 56% in 2017 compared to 2016.

amount X and is made in country Y, it is rejected.’ On the other
hand, an intelligent fraud scoring engine calculates probabilities:

Risk-based instead of rule-based

‘What proportion of all fraud cases recorded to date deal

In the fight against fraud, payment service providers (PSPs) must

with amounts greater than EUR 500, and what percentage

have better tools at their disposal than ever before. Rule-based

of successful, clean payments is greater than EUR 500?’

fraud prevention is replaced by risk-based fraud prevention.

This results in a data record that the system uses to calculate the

The difference: previous procedures allowed the risk assessment

probability of fraud. This method is much more accurate than

to be based on certain rules according to which a transaction

the rule-based approach and can be applied to all parameters

was approved or rejected. The criteria were, for example, in

(payment location, device used, etc) that also use rule-based

which country the buyer uses a credit card, whether the device

fraud prevention. The accuracy of the calculation improves with

with which he pays online is unknown to the system, whether he

every payment transaction because, based on the empirical

uses the card several times at short intervals, and whether he

values from past transactions, the precision of the probability

exceeds a certain amount of money when paying. In practice,

calculation for each individual parameter increases, thus the

many other rules apply but, despite their complexity, they do

quality of the overall statement increases as well. Essentially,

not protect against fraud as effectively as the machine learning

this is the greatest benefit of risk-based fraud prevention. ➔

method does.

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WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

Adaptable, fast and flexible
Combined with all the risk factors taken into account – such
as transaction duration, correspondence between invoice and
delivery address, use of an anonymisation service, and many
more –, the engine calculates a score value within fractions of
a second, which represents the basis for the decision, as to
whether the transaction should be submitted to the card-issuing

About Computop: Computop offers local and innovative

bank for protection via 3-D Secure.

omnichannel solutions for payment processing and
fraud prevention around the world. For ecommerce,

If the risk factors regarding fraud represent less than a certain

at POS and on mobile devices, retailers and service

value, the system does not perform an additional query. In the

providers can choose from over 250 payment methods.

case of a medium value, the bank either uses its own checking

Computop, a global player with locations in Germany,

system to relieve the customer of entering a password or it

Canada, the UK and the USA processes transactions

requests the password directly. If the 3-D Secure procedure is

for more than 15,000 retailers annually, with a combined

used, the bank also takes over the liability risk from the merchant.

value of USD 31 billion.

If the score is clearly within the red range, the transaction is
rejected directly.

www.computop.com

The risk-based method fundamentally changes fraud prevention.
Until now, rule creation was a manual process based on individual
traders. The automation now increases flexibility and it is able to
drive double-track. On the one hand, this approach assesses the

Click here for the company profile

risk-based on trader-specific transaction characteristics, and on
the other hand, it uses the entirety of all anonymous transactions
of the PSP for forecasts.
Therefore, each transaction is protected the best possible
way, on the basis of the past, and subsequently contributes to
further optimisation. In principle, PSPs include both successful
transactions and chargebacks from the acquirer’s settlement files
in their risk analysis. Machine learning enables the scoring engine
to move away from the purely manual adaptation to new threats,
that has been adopted, so far, by organisations. This was timeconsuming, inaccurate, and inflexible.
With machine learning, the reaction speed to fraudulent actions
increases, as the retailer can rely not only on his own transaction
data but also on risk assessments from Computop’s past payment
transactions – thus, on a significantly higher overall population.
The combination of machine learning and rule-based risk pre
vention offers the best possible protection, with experienced
experts monitoring the process and providing the artificial
intelligence with the context it needs, to develop further and
work with the right assumptions.

15

WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

CyberSource
Why Implement a Fraud Management Solution that Combines Machine Learning
with Rules?
About Mark W. Hall: Mark is a seasoned entrepreneurial leader who is passionate about crafting multichannel marketing programmes that communicate differentiation and clarity in the Enterprise B2B
space. At CyberSource, Mark heads global cross-functional marketing, positioning, and messaging for
the company’s fraud solutions.

Mark W. Hall | Sr. Director Global Solutions Marketing, Fraud Management | CyberSource

According to artificial intelligence (AI) pioneer Arthur Samuel,
machine learning is a ‘field of study that gives computers the ability

Why implement a fraud management solution
that combines machine learning with rules?

to learn without being explicitly programmed.’ For fraud mana
gem ent, this means that machine learning can detect subtle

Gains
L5

emerging fraud patterns that are impossible to see on a human
level. Virtually, all fraud management systems today use some
form of machine learning, so what sets CyberSource Decision

+

Manager apart?

Revenue
growth

fraud solution that draws insights from Visa and CyberSource’s
68B+ annual transactions processed from around the globe.
These transactions come from tens of thousands of merchants
across a wide variety of industries and specialities. With this depth

L4
Lost sales
opportunities

L1

Time

Importance of data: Decision Manager has had machine learning
from the beginning. Decision Manager is the only machine learning

Theoretical
revenue
trajectory

Restored sales
opportunities

Managed fraud is reduced
but never goes to zero

L2

–
Losses

Fraud
losses

L3

Theoretical fraud
loss trajectory
without fraud
management

Fraud solution
implementation point

T0
© 2018 Visa, Inc. All rights reserved

and breadth of data, it’s like having more high-quality neurons in
the machine learning ‘brain.’ It just makes sense that better data

Line L2 shows fraudulent activity as a percentage of revenue.

leads to better fraud detection decisions.

As revenues grow, if fraud losses are left unchecked, they too
would continue to grow as a percentage of revenues, as shown

Why rules are needed: Another very important distinction

on line L2.

with Decision Manager is the inclusion of powerful rules, which
adds a level of precision control for Risk Analysts. But why are

Line T0 represents the point in time when an organisation

rules important? Let’s explore a theoretical example of what can

implements a fraud management solution. Once a business

happen without rules in the following diagram.

realises they have significant fraud losses, they will institute a
fraud management system as shown at time T0.

Line L1 shows revenue growth before applying a fraud pre
vention tool. In the diagram, line L1 represents a theoretical

Line L3 shows the reduced level of fraud by using a fraud

revenue growth trajectory.

management programme. As the fraud management system
starts learning from that business’ transaction data, the fraud
loss level should gradually reduce as shown on the red line L3. ➔

16

WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

It is virtually impossible to prevent all fraud; however, through
active fraud management, the fraud percentage can get very low.
Line L4 represents the reduced level of revenue due to a poor
customer experience while managing fraud. False positives can
lead to lost revenues, as shown on the yellow line L4, not only due
to the loss of the immediate sale, but even more by potentially

About CyberSource: CyberSource is a global, modular

losing a customer forever due of the rejected transaction.

payment management platform built on secure Visa

This has the impact of reducing revenue growth not only by

infrastructure, with the insights of a USD 427 billion

interfering with business one transaction at a time, but tarnishing

global processing network. It helps businesses enhance

the experience for a legitimate buyer and compromising the

their customer experience, grow revenue, and mitigate

lifetime value of customers.

risk. For more information, visit cybersource.com

Line L5 shows what active fraud management can do to

www.cybersource.com

restore revenues closer to the theoretical level. By combining
rules with good manual review practices, many businesses
may actually see an increase in revenue that comes very close
to their theoretical revenue trajectory, as seen in the green line
L5. Decision Manager’s rules can be configured to activate at
a specific time of day or date ranges, which can accommodate

Click here for the company profile

a variety of cyclic, seasonal, and periodic sales promotions –
helping maximize acceptance rates and revenues.
Rules provide customised control: By instituting rules, a risk
analyst can inject human intelligence and set common-sense
parameters for their specific business. For instance, if the item
being sold is a low priced digital good, like a picture or a song,
the risk analyst might have a higher tolerance for the fraud risk
score because there is no cost of goods. This is much different
than an online retailer of big-ticket luxury items where the cost
of goods is high – and there’s an open market for fraudsters to
easily turn those goods into cash. Obviously, in the latter case,
the risk analyst will want to send questionable transactions to
manual review prior to shipment.
The best of both worlds: Decision Manager employs machine
learning that operates on insights from 68B+ global Visa and
CyberSource processed transactions, enabling fast detection
of emerging fraud patterns, while at the same time offering
powerful rules that enable the injection of human ingenuity.
Machine learning, combined with rules, provides an excellent
fraud management solution.

17

WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

Kount
Brick and Mortar Navigates Digital Transformation

About Don Bush: Don is the Vice President of Marketing at Kount. Prior to joining Kount, Don was the Director
of Marketing at Cradlepoint, a leading manufacturer of wireless routing solutions in the mobile broadband
industry. Don has worked in several management roles within the technology segment for over 20 years with
both hardware/software manufacturers and as a partner in two top technology-marketing agencies.

Don Bush | Vice President of Marketing | Kount

Traditional brick and mortar merchants are expanding beyond their

When brick and mortar merchants experience fraud in their

four walls to engage with customers through mobile apps, kiosks,

traditional card-present environment, the liability of loss is

desktops, and other digital platforms. At the forefront of this digital

generally on the card issuer if the merchant supports EMV

transformation is the introduction and branding of trademarked

transactions. In a card-not-present (CNP) environment, however

native mobile apps supporting rich features for creating and

(online, mobile web, or mobile app), the liability for a fraudulent

managing accounts, earning loyalty points, providing reviews,

transaction now falls to the merchant. This places the merchant

engaging with customer support, other customers and more.

at risk of new fraud tactics, potential chargebacks, and greater

While mobile apps for retail are nothing new, many of the first-

financial losses.

generation apps are being replaced with apps supporting creative
and elaborate digital interaction use cases. These new apps allow

With a new focus on creating digital accounts for their customers,

merchants and retailers, regardless of sector, to engage with

traditional brick and mortar merchants are also exposed to all

customers in a digital environment, in order to build brand loyalty

types of new fraud, including:

and engagement and drive towards greater monetisation with
enhanced ease-of-use and personalisation.

• A ccount takeover: Gaining access to an established digital
account using compromised credentials (username and pass

This shift towards digital economy is fueling the growth of the

word) allows a fraudster to take advantage of the value of that

mobile payments industry and it’s becoming a beacon for fraud

account. This may include using the saved payment method or

sters to attack traditional brick and mortar merchants. In fact, The

loyalty points to make purchases.

Mobile Payments and Fraud: 2018 Report stated that detecting

• Loyalty reward points fraud: Because reward points can work

fraudulent orders is one of the top three challenges for merchants

like cash, fraudsters identify weaknesses in the system and steal

in the mobile channel.

reward points to sell them.
• eGift cards fraud: Considered low-hanging fruit, electronic gift

Card Present versus Card Not Present =

cards are easily converted into cash, a key requirement for fraud

Chargebacks

sters. They sell them at a discount, with the merchant responsible

As brick and mortar merchants make this digital transformation

for the resulting chargebacks and any merchandise or services

and begin to accept card-not-present and mobile ecommerce,

provided for the value of the gift card.

they become exposed to all types of fraud schemes and charge

• Promotion fraud: Launching a promotion can often capture the

back programmes that can cause disruption and large financial

attention of fraudsters who are skilled at identifying ways to get

and brand loyalty losses.

around policies or offer limits. ➔

18

WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

Approach to fraud protection
Brick and mortar businesses navigating towards a digital
transformation need to deploy a fraud strategy that is multilayered and specifically accounts for card-not-present fraud.
An underpinning technology for stopping CNP fraud is machine
learning. Machine learning combines data, context, and feature

About Kount: Kount’s award-winning fraud management,

engineering to allow organisations to evaluate the risk of a

identity verification and online authentication technology

particular digital interaction or purchase. Machine Learning, a

empowers digital businesses, online merchants and

form of artificial intelligence, allows fraud prevention solutions to

payment service providers around the world. With Kount,

“learn” on their own and continually improve results. In order to

businesses approve more orders, uncover new revenue

stop a card-not-present payment, there are two critical types of

streams, and dramatically improve their bottom line all

machine learning that, when combined, provide the best fraud

while minimizing fraud management cost and losses

prevention foundation.

and protecting consumers. Through Kount’s global
network and proprietary technologies in AI and machine

• Unsupervised Machine Learning. Unsupervised learning does

learning, combined with policy and rules management,

not require outcomes, so it can learn without waiting for the

companies frustrate online criminals and bad actors

completion of a three-month chargeback reporting cycle. This

driving them away from their site, their marketplace and

type of learning often relies on clustering, peer group analysis,

off their network.

breakpoint analysis, or a combination of these. This enables
fraud prevention solutions to detect patterns and anomalies

www.kount.com

rapidly within extremely large sets of data.
• S upervised Machine Learning. Supervised learning uses
outcome-labelled training data sets to learn. Models include

Click here for the company profile

neural networks, Bayesian classifiers, regression, decision trees,
or an ensemble combination. Massive amounts of data run
through defined models to assess risk outcomes.
Brick and mortar merchants that deploy a mobile app need to
account for a new world of risk through digital fraud attacks. There
are great benefits to investing in digital engagement channels,
however, with those opportunities comes risk. By addressing
fraud with a holistic strategy, merchants can authenticate a user,
identify fraudulent behaviour, and stop fraud before it influences
the bottom line and diminishes the merchant’s brand. By building
a level of fraud prevention in their mobile apps, brick and mortar
merchants are empowering decision makers with data to make
informed decisions and to mitigate fraud before it impacts the
businesses’ bottom line.

19

WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

Covery
Next Generation Fraud Prevention Platforms Leverage ML to Secure Payments

About Pavel Gnatenko: Pavel has a master’s degree in intellectual systems for decision-making.
He is a risk management expert with more than seven years of experience in the fintech industry.
Currently, Pavel is focused on developing Covery - next generation of risk management platforms.

Pavel Gnatenko | Risk Management Expert | Covery

As fraudsters follow the growth of the cashless economy online,

The machine learning process contributes to the learning of non

anti-fraud companies are building powerful tools and techniques

linear combinations of latent characteristics and their combinations

that mine various data for fraudulent behaviour patterns.

that lead to predictiveness enhancement.

Fraudulent attacks are getting to be more sophisticated and inven

There are two approaches that are used in machine learning:

tive. Once a new solution against fraud is developed, fraudsters

supervised and unsupervised learning. The first approach is the

immediately find a new loophole. And it seems that the risk pro

most common and widespread.

fessionals are always a step behind.
With the supervised approach, in the beginning, a risk analyst cre
Machine learning can be used to help solve this problem, but at the

ates a machine learning model based on historical data. Then, with

moment it is impossible to completely abandon human intervention.

new transaction data, the algorithm creates potentially right
baskets: fraud and not fraud. After that, the system collects exter

Rule-based and machine learning approaches complement each

nal signals such as fraud alerts, chargebacks, complaints etc.

other because machines can analyse a larger volume of characte

Based on that information, the algorithm starts looking for new

ristics, based on the context, while risk analysts can create models

unrecorded dependencies. Finally, the model starts retraining.

that are easily understood by humans, unlike the machine-learning

Consequently, all the risk analysts are one step behind the game,

approach alone. Each industry has its own unique set of features

thus, the cycle continues and with time new techniques emerge.

and each fraud prevention system aims to adapt them to avoid
false positives (good customers identified as fraudsters) and false

Unsupervised learning is regarded as an alternative to supervised

negatives (fraudsters identified as good customers). Moreover, the

learning. These algorithms infer patterns from a dataset without

risk system needs to periodically be examined by risk managers

reference to known or labelled outcomes. Unsupervised learning

and afterwards tuned, for example, if online merchants sell new

allows risk analysts to approach problems with no exact idea

products or make frequent changes to their billing logic.

about what the result will look like. One can derive structure from
data where they don’t necessarily know the effect of the variables.

The power of supervised and unsupervised machine

With unsupervised learning, there is no feedback based on the

learning

prediction results. But it can divide data on the basis of anomalous

A machine learning solution needs access to a big store of histo

behaviour and then risk analysts can apply well-known supervised

rical data to train its models and increase the probability that it

approaches to this data. ➔

will uncover patterns of new suspicious activity. The more data,
the better the system becomes at detecting and preventing fraud.

20

WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

Therefore, unsupervised machine learning is more applicable to
real-world problems and can help to solve them when risk mana
gers are constantly one step behind the fraudsters.

Why use machine learning in payment fraud
prevention?
When it comes to detecting and fighting online payment fraud,

About Covery: Covery is a global risk management

several advantages become evident:

platform helping online companies solve fraud and

- it facilitates real-time decision-making and improves the expe

minimise risk. We focus on the universality of our

rience for customers;

product and its adaptation to any type of business,

- it improves accuracy of classification;

based on the individual characteristics and customer

- it helps detect new fraudulent behaviour;

needs using both rule-based and machine learning

- it provides a more rapid response to real-world changes.

approaches.

What can the best fraud prevention solutions do

www.covery.ai

The most advanced fraud prevention services use both rulebased and machine learning approaches, including unsupervised
techniques, with an industry focus and an adaptation for the
business’ individual characteristics and customer needs. The result

Click here for the company profile

is a solution that makes more accurate decisions for each industry
and every customer. One of the companies working in this space
is called Covery. Risk analysts can customise any combination of
data patterns we call ‘features’ that can be applied to a specific
business needs. Covery can also accept any non-payment data
in any user action to supplement the profile with missing details
to analyse by using both rule-based and machine learning models

Conclusions

for more precise decisions.

Fraudsters are always developing new tricks and risk managers
don’t always have the time to adapt to new changes. Machine

So what is Covery?

learning has long been expected to help solve the problem of

Covery is a global risk management platform helping online com

preventing fraud, but the majority of solutions are still on the path

panies solve fraud and minimise risk. The company focuses on

of development. So Covery’s main goal is to solve the problem

the versatility of the product and its adaptability to each type of

when risk managers are constantly one step behind the fraudster.

business, based on the individual characteristics and customer
needs using both rule-based and machine learning approaches.
Covery works with high-risk as well as with low-risk industries to
find the right solution for every customer.
What Covery offers to help with fraud prevention:
- wider coverage of user actions for analysis;
- flexible customisation of data patterns;
- usage of any additional data for analysis;
- rule-based and machine learning approaches;
- functionality to work with loyal users to increase revenue;
- custom machine learning models creation;
- custom functionality upon request;

21

WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

Europes’s biggest FinTech
event is back in Amsterdam.
3 - 5 June 2019, The Rai

europe.money2020.com

Best Practices in the Fraud Management Space

Ethoca
Collaboration Paving the Way for Ecommerce Customer Experience

About Keith Briscoe: Keith Briscoe leads Ethoca’s global product and marketing functions, a role
spanning the development of Ethoca’s suite of collaboration-based fraud/chargeback mitigation and
transaction acceptance solutions, as well as integrated marketing programmes. His mandate includes
product strategy and management, new product innovation, competitive analysis, experiential marketing,
integrated marketing campaigns, public relations, analyst relations, content strategy, and stakeholder
communications.

Keith Briscoe | Chief Marketing Officer | Ethoca

Goodbye fraud, hello customer experience

The most staggering fact is that while USD 50 billion is a headline-

If the headline to my editorial caught you by surprise, let me

grabbing number, it pales next to the lost transaction value and

explain. While we’re not kissing ecommerce fraud completely

customer insult factor that comes with false declines – when good

goodbye anytime soon (courtesy of those increasingly organised

transactions are falsely rejected due to apparent fraud risk. Aite

fraudsters, confused customers, and savvy consumers looking for

Group estimates that false declines are costing the industry USD

ways to game the system), the payments industry is continuing to

331 billion annually, and that number is set to rise as the pervasive

direct its focus toward the far more lucrative domain of ‘customer

influence of friendly fraud continues to wreak havoc with effective

experience’.

fraud decisioning.

If 2018 has shown the payments community one thing, it’s that

The compounding regulatory ripple effect

we’re at a critical inflection point and moment of decision as an

One of the biggest ironies of 2018 is that the rise in customer

ecosystem. As I’ve talked to payments professionals this year and

experience together with cardholder protection are reaching a

closely followed the lightning-fast pace of change, the nature of

crescendo just as the regulatory environment is about to kick into

this key ‘moment’ is coming into sharp focus.

motion a series of changes that will potentially make it harder than
ever to create a frictionless customer experience. Enter PSD2 –

The pendulum shift from fraud to customer expe

particularly the Strong Customer Authentication (SCA) component

rience

of the updated payment directive release by the EBA.

The CNP fraud conversation continues to shift increasingly to
defining moments of customer experience. While fraud is no

When two-factor authentication becomes mandatory on all trans

longer the central concern, it’s still very much part of the picture

actions over EUR 30, the industry will be waiting with bated breath

as the industry continues to cope with a rampant ‘friendly fraud’

to measure the impact of customer conversion and declines.

(or false claims) problem. Ethoca’s assessment is that the CNP

It’s important to remember that potentially 30% of all customer

chargeback problem is estimated at USD 50 billion, comprised

declines are never tried again on another card in the cardholder’s

of a combination of blended OPEX for both merchant and card

wallet. And while SCA exception scenarios exist when fraud rates

issuer, and lost value on transactions that are falsely disputed

can be held in check at a PSP or acquirer level, it will prove to be

by cardholders (sometimes unwittingly, but increasingly abusive

very challenging for ecommerce merchants to realise that benefit

in nature). As a blended average across all merchant categories,

with so many false claims in the system. ➔

friendly fraud is hovering in the 30 to 40% range, but it’s most
acutely felt in digital goods where it can exceed 90%.

24

WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

3DS 2.0 holds the promise of delivering higher acceptance rates
as long as merchants can get comfortable with sharing extended
data fields with card issuers to benefit from liability shift. However,
in parallel with this key question, there is a lot of chatter about the
‘death of fraud detection’ given that merchants can simply accept
every transaction and let 3DS liability sort out the rest. That would
be a tremendously short-sighted move, ultimately straining the

About Ethoca: Ethoca is the leading provider of

delicate card issuer – merchant acceptance balance.

collaboration-based technology that closes the
information gap between thousands of card issuers

For a start, this approach would trigger more step-up authenti

and ecommerce merchants worldwide – including

cation at the card issuer, introducing increased friction – and

the top global brands and banks. Ethoca’s powerful

abandonment – into the purchase process. In addition, facing

suite of innovative solutions help stop fraud, eliminate

increased losses as a result of liability shift, card issuers’ accept

chargebacks, improve customer experience and

ance and fraud detection models would likely decline more.

increase card acceptance.

Once again, we’re seeing all of this potentially set the stage for
anything but a good customer experience. Creating customer

www.ethoca.com

habituation will be key (ease of use, minimal friction and virtual
invisibility). But it must be balanced with responsible and equitable
behaviours from both merchants and card issuers and enabled by

Click here for the company profile

innovative technology that encourages productive, value-based
collaboration.

The case for collaboration
So where is all this heading? During no other period in the history

and merchants to solve for dispute challenges is just step one.

of payments has the time been more right for industry collabo

Think about where this goes from here: when cardholders

ration to solve the most pressing problems in ecommerce. The rise

have access to their consolidated digital receipts in the bank’s

of what we at Ethoca call ‘bi-lateral rich data exchange’ is opti

mobile app, that’s where customer experience enters ‘next

mally positioned to solve these increasing challenges. Here are

level’ territory. That digital journey should matter as much to

three recommendations for solving the most pressing customer

banks as it does to merchants, laying the foundation for highly

experience and transaction acceptance challenges heading into

relevant cross-sell opportunities and deeper engagement over

2019:

the course of the purchase journey.

1. Take the noise out of the system – The tricky thing with

3. Build the business case incrementally – One of the biggest

friendly fraud is that it’s virtually impossible to detect with typical

challenges in realising the full potential of bi-lateral rich data

fraud detection tools because it’s largely behavioural in nature.

exchange between card issuers and merchants is finding the

It simply doesn’t ‘look’ like fraud, because it isn’t. Making

‘wedge’ use case(s) that prove the value through an incremental

merchants’ deep purchase and account insight available to

approach. Ethoca’s view is that by starting with the biggest

card issuers’ mobile applications and to call centre agents –

pain points – moments of dispute or concern that can be

at the pivotal moment of customer concern – is a critical first

instantly resolved with real-time intelligence ‘in the moment’

step in helping customers understand what they bought. The

– card issuers and merchants alike will become increasingly

result: better fraud decisioning (less garbage in means higher-

comfortable with sharing intelligence that drives the best

performing detection systems), fewer false declines, fewer

possible customer experience.

fraud claims, and improved customer experience.
2. Set the stage for ‘post transaction customer experience’ –
Utilising rich data and intelligence sharing between card issuers

25

At Ethoca, we’re welcoming 2019 with open arms and excitement:
the times, it seems, have caught up with collaboration.

WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

RISK IDENT
Felix Eckhardt, Managing Director (CTO), and Piet Mahler, COO, RISK IDENT consider some of the key payment, fraud prevention,
operational, and regulatory issues for European merchants with aspirations of doing business in the US.

About Felix Eckhardt: Felix Eckhardt was with RISK IDENT at its inception. Initially taking
up the position of senior software engineer, he helped RISK IDENT get on its feet as the
chief architect behind the company’s second fraud prevention product, FRIDA. A year
after the company’s founding, Felix became the CTO and remained in the position until
he moved to Australia in 2016. While abroad, he acted as Senior Software Developer,
developing data-driven solutions for telecoms and marketing industries for two years.
About Piet Mahler: Piet Mahler is the COO at RISK IDENT, leading the strategic direction
of the company alongside the CTO, Felix Eckhardt. He is responsible for the development
of the business side of the company, having previously held the position of VP Operations
& Business Development, helping lead the company’s international growth.

Felix Eckhardt | CTO | RISK IDENT

Piet Mahler | COO | RISK IDENT

Let’s start with payments. What do European mer

Atlantic review fewer than 10% of transactions and the reject rate

chants need to be aware of when expanding over

is around 3%.

seas?
In the US, payments reflect consumer behaviour. There are

The overall fraud rate in the US is higher though. One reason

generally fewer standard payment methods than in Europe, and

for this is that in Europe fraud patterns are more recognisable,

the majority of payments are made via credit card rather than

since they tend to come from specific countries and merchants.

direct debit or money transfer.

In the US, fraudsters have more opportunity to blend in and find
sophisticated ways to get around prevention mechanisms.

These payment types may present some difficulties from a fraud
perspective – for example, making it more difficult to claw back

It is also easier for fraudsters to build profiles for fraud due to the

disputed funds.

availability of data in the US, where the focus tends to be on pay
ment validation rather than identity verification. ➔

One economic factor is the interchange fee on credit cards. Unlike
Europe, the US does not have a cap on these charges, which is
why the average interchange fee in the US is 1.73%, compared
to 0.96% in Europe. Interchange fees on debit card transactions
were capped in 2011 by the Durbin Amendment, but this does not
apply to credit cards.

How does Europe compare to the US from a fraud

The majority of merchants on
both sides of the Atlantic review
fewer than 10% of transactions
and the reject rate is around 3%.

prevention perspective? How do the strategies for
combatting fraud differ?
In some respects, Europe and the US are similar when it comes
to payment fraud. The majority of merchants on both sides of the

26

WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

European merchants tend to rely on vendors for fraud decisions,
whereas in the US merchants rely on the vendors for the platform
and the merchants figure it out themselves. This seems to be
especially true for larger merchants.
Our research has found that the variety of fraud reporting struc
tures in the US is quite pronounced. These reports address diffe

About RISK IDENT: RISK IDENT is an anti-fraud

rent corporate priorities and have a general lack of consensus.

software development company based in the US and

This is usually how vulnerabilities that can then be exploited open up.

Europe that protects companies within the ecommerce,
telecommunication, and financial sectors. RISK IDENT’s

What operational considerations should merchants

machine-learning software uses sophisticated data

focus on when expanding overseas?

analytics to block any kind of fraud, all with human-

US consumers are demanding. Many will make purchases

friendly user interface that simplify a fraud prevention

during their commute and they expect next day delivery from

team’s decision-making process.

all merchants, even those based outside the US. Many of them
will not consider where the merchant is based when making a

www.riskident.com

purchase online. Having a US fulfilment house is a consideration.
In Europe, it is critical to offer local payment options to keep con
version rates high. Consumers expect to be able to pay with all

Click here for the company profile

major payment types with national differences. Missing payment
types lead to abandonment.

GDPR came into effect this year. How does the US
differ from Europe when it comes to regulation?
There has been a great deal of talk about the General Data Protec
tion Regulation (GDPR), but European data privacy rules and

Data protection is also a consideration in the US, where individual

attitudes have long been far stricter and more discerning than in

states often have their own rules, in addition to national standards.

North America.

For example, the FCC is in charge of the rules concerning what
data internet service providers can and can’t sell; health data

The other big change in online commerce in Europe is the Second

is protected under the federal Health Insurance Portability and

Payment Services Directive (PSD2). Combined with the GDPR, it

Accountability Act, and the Federal Trade Commission enforces

provides greater choice for consumers in how they can pay and

the Children’s Online Privacy Protection Act.

control their finances, while also aiming to modernise approaches
to security and privacy.

Ecommerce in the US is worth almost half a trillion dollars annually,
according to the US Commerce Department. In Europe, it is worth

One difference is a call for a minimum of two-factor authentication,

over half a trillion euros and growing fast.

whereby a consumer would not just be asked for a password, but
may be asked for either a biometric scan or for authentication via

Cross-border commerce is the Holy Grail for retailers; tune your

another device, such as a smartphone. Another example is that US

fraud prevention today to ensure it doesn’t become the same for

merchants have collected data just because they could, but this

the fraudsters.

is an unnecessary risk and in many cases businesses don’t know
what to do with this data. Now they have to inform customers
clearly about the need and how they manage data protection.

27

WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

Emailage
Are You Ready for the New Era of Online Payments?

About Amador Testa: Amador is Chief Product Officer at Emailage. He is an industry expert in online
fraud, identity theft and cybercrime. Before Emailage, he was the head of fraud for card acquisitions at
American Express and later led global fraud prevention divisions at Citigroup. Amador enjoys playing
tennis, running marathons and traveling with his family.

Amador Testa | Chief Product Officer | Emailage

Traditionally, when we talk about the approval of online trans
actions, merchants are the ones who have the majority of ‘rich’
data.
By that, I’m referring to merchants having access to elements such
as customer demographic info, name, email address, and IP address
of the customer submitting the transaction. Also included is the
shipping address, along with what type of products are being
purchased.
The hitch in this process is that when merchants request authori
sation from the issuing bank, those issuing banks don’t have access
to the same data. The data they can see has historically been
very limited. The basic things that issuing banks can see are:

In the US, the numbers are much lower, but the impact is still there,

● What is the line of credit for that card?

nonetheless. There is an exception, though, when the Issuing

● Is that transaction over the limit?

Bank is also the Acquirer, meaning they have a relationship with

● Has that card been used before in that industry?

the card holder as well as the merchant.

● Has that card been used at that merchant before?
These types of relationships allow more data to flow than a simple
The transaction amount, and in certain cases the name and billing

credit card and name/address information, such as the email and

address associated with the payment method, which can help in

IP addresses, and other details about the order, which have proven

the authorisation process, may also be present.

to be indispensable in allowing more precise decisions that benefit
all parties involved.

Here’s the problem
The lack of visibility for issuing banks into this important customer

For customers, orders are approved more quickly with less disrup

information can generate significant impacts on the authorisation

tion. For merchants, this translates into more revenue, as a larger

process. These effects are especially magnified in the Central and

portion of orders is approved. ➔

South American markets, where a very large percentage of online
transactions are declined, even reaching 20% or more in certain
industries.

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WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

Big changes to come
There are key changes on the horizon for issuing banks, allowing
them to validate digital identity of their customers.
Version 2.x of the 3-D Secure protocol is the first to require mer
chants to send the email address of customers to the issuer. While
there are many other data fields also included, the email address

About Emailage: Emailage, founded in 2012 and

is important because it is almost invariably used to confirm

with offices across the globe, is a leader in helping

the purchase. This means that if fraudsters use the address

companies significantly reduce online fraud. Through

associated with the card, the cardholder will be informed that an

key partnerships, proprietary data, and machine-learn

order has been placed. Criminals can avoid this by using accounts

ing technology, Emailage builds a multi-dimens ional

under their control to place orders. Email can, therefore, be a vital

profile associated with a customer’s email address

indicator of fraud. But it’s not as simple as checking that the email

and renders a predictive risk score. Customers realize

address matches that held by the issuer. Globally, it is estimated

significant savings from identifying and stopping frau

that there are 1.75 accounts per email user and this figure is

dulent transactions.

higher in the developed world with users typically having three
active accounts including a work email address. Spotting a new or

To learn more, visit: www.emailage.com, @Emailage on

unrelated email address can really help.

Twitter, or the company’s LinkedIn page.

It’s also important to know whether a specific address has been

Click here for the company profile

involved in a previous fraud. While email address checking is no
silver bullet for ecommerce fraud, it can be a powerful tool when
combined with other data and analytics during the authentication
or authorisation process.

Risk scoring of email addresses
While using email as a factor in risk assessing payments is new to

decisions will do better. Merchants have already discovered that

issuers, Emailage has a history of helping merchants counter the

email address is an effective fraud risk factor in ecommerce; it is

threat of fraud in ecommerce. Since 2012, Emailage has offered

now time for the financial services industry to learn lessons from

fraud risk assessment built around the email address.

them.

We utilise a predictive risk score based on machine learning
algorithms combined with a cross-industry and cross-sector
consortium database. This approach offers merchants the ability
to mitigate fraud with negative signals while using positive signals
to approve good customers. The roll-out of 3-D Secure 2 and the
implications of Strong Customer Authentication in the European
Union will mean that both the obligation and the capability to fight
fraud move to card issuers.

Conclusion
Card issuers are faced with a challenge – how will they balance
customer friction and fraud prevention? The businesses which
have better fraud risk analytics and better data on which to make

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WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

Emerging Payments Association
Account Takeover via Hacking Bots (The Rise of the Bots)

About Neira Jones: Neira advises organisations on payments, fintech, regtech, information security, regu
lations and digital innovation. She holds a number of Non-Executive Directorships and Advisory Board
positions and is on the Thomson Reuters UK’s top 30 social influencers in risk, compliance and regtech
2017 and the Planet Compliance Top 50 RegTech Influencers 2017.

Neira Jones | Ambassador | Emerging Payments Association

An increasingly mobile & digital landscape

behind large transaction volumes, leading to spikes in bot activity

As mobile transactions now account for 58% of total transactions,

(ThreatMetrix Q2 2018 Cybercrime Report).

mobile is now fuelling each stage of the customer journey and has
become the preferred method of interaction. Across industries,

A complex regulatory landscape

almost two-thirds of all account creations now come from a mobile,

As payment industry reforms (e.g. 3DS 2.0 and Open Banking

whilst in financial services, mobile transactions make up 61% of all

worldwide, or PSD2 in Europe) try to promote innovation and

account creations and 66% of all account logins.

reduce friction whilst providing secure payment interactions, data
protection regulations (such as the GDPR in Europe or the CCPA

With the global push for digitisation, online transaction volumes

in California) apply even more pressure on businesses that handle

are relentlessly increasing, mimicked by a corresponding surge

personal data.

in cybercrime and automated attacks. Compounded with the
regulatory push for disclosure, individuals have resigned them

To meet the regulatory challenge and manage risk effectively,

selves to the dramatic headlines and alarming statistics.

organisations must get as close as possible to a single end-to-end
view of the customer, regardless of service/product, channel or

Technology as an enabler: opportunity knocks...

device. And they must do this as seamlessly as possible. In other

The more consumer behaviours change and adoption of new

words, businesses must be able to distinguish between genuine

technologies increases - such as machine learning (e.g. AI driven

customers (who are increasingly ubiquitous) and fraudsters (who

financial apps, chatbots), the IoT (e.g. payment wearables, home

are increasingly able to mimic genuine customers).

assistants) - the more criminals find additional opportunities to
exploit vulnerabilities. Indeed, the 21st century has given fraudsters

The automation era

an ideal playground with the combination of digital interactions,

Indeed, stolen data (and identities) will be used by criminals

the systemic failure of organisations to keep pace with the security

for two main purposes: opening new accounts (which can lay

measures needed for new technologies, readily available personal

dormant for periods of time and then used to make payments

data that can be harvested from the many data breaches that

using stolen card details) and taking over existing accounts (to

have or have not made the news, and the willingness of many

purchase goods and services, steal credentials and payment

merchants to relax their risk controls during peak transaction times

details). Large ecommerce retailers are a target of choice for auto

to approve more orders (such as during world sporting events or

mated bot traffic, which makes use of readily available stolen

holiday periods). Moreover, as criminals also have the opportunity

identities and capitalise on the fact that individuals will often reuse

to capitalise on new technologies and automated tools, this melting

passwords across many sites (aka “Credentials Stuffing”). ➔

pot of opportunity has enabled them to find new ways to hide

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WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

Automated bots enable criminals to launch attacks that keep
trying credentials until they match an existing account, with very
little effort.

About Emerging Payments Association: The Emerging
Payments Association (EPA) has over 130 members
from across the payments value chain. We connect the
payments ecosystem, encourage innovation and drive
business growth, strengthening the payments industry
to benefit all stakeholders. Get in touch at info@
emergingpayments.org or +44 20 7378 9890.
www.emergingpayments.org

Source: ThreatMetrix Q2 2018 Cybercrime Report

By contrast, the financial services industry has always been heavily
regulated, and security and fraud prevention mechanisms are
generally stronger than in other industries. It is no surprise there

must use a variety of fraud detection and prevention methods,

fore that the preferred attack method is through social engineering

stop relying on passwords as their top form of authentication and

(e.g. tricking customers into transferring funds to a mule account,

look beyond retrospective transaction analysis towards real-time

or giving away credentials). A notable exception to this is that

and predictive consumer behaviour analysis, as well as moving

fraudsters see fintech providers as easier targets than traditional

beyond rules to context and attributes. Moreover, the lack of

financial services companies due to the fact that fraudsters

digital identity integration with wider customer engagement

attempt to exploit new and emerging platforms to exploit gaps

strateg ies will lead to fragmented customer experiences and

in process and infrastructure (e.g. “Loan Stacking” - where new

customer attrition, the inability to capitalise on customer data

loans are applied for using an infiltrated account, using one loan

to inform decision-making and enhance the overall customer

to pay off the next until the loan value is inflated to the maximum

experience, as well as to data privacy challenges. Real-time

amount available, which is when the criminal defaults on payment),

solutions combining multiple data points (e.g. device information,

targeting account logins and payments transactions.

biometrics, contextual, predictive, and behavioural information
etc.) will help businesses better recognise their customers - rather

Challenges and opportunities

than challenge them - and will also help identify anomalies such

As consumers continue to adopt new and emerging techno

as account takeover and automated bot traffic.

logies, the challenge is to balance customer experience with
security. This will mean that businesses will have to ensure that
they deploy dynamic approaches to counter the proliferation
of stolen identity credentials and advanced device and identity
spoofing techniques which allow fraudsters to bypass the most
complex online application procedures. Indeed, recognising
legitimate customers across industries and channels will also
fuel growth and opportunities. This also means that businesses

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WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

Merchant Risk Council
Paul Kuykendall depicts his vision of MRC’s future growth opportunities and the way this community evolved in order to support
merchants in fighting payments and commerce fraud.

About Paul Kuykendall: With over 20 years of experience in global payments and fraud technology, Paul
came to the MRC as the VP of Payment Platforms for the world’s largest ticketing company. He is a
subject matter expert on payment processing, data security, compliance, and risk mitigation. Paul’s prior
MRC involvement includes various committees, regional boards, and the Global Board of Directors.

Paul Kuykendall | CEO | Merchant Risk Council

Could you please provide our readers with some

The Internet was brand new, with huge potential for sales, and

insights into your professional background, prior to

in turn, created a new channel for criminals to infiltrate and take

joining MRC?

advantage. This merchant group met in person a few times a year,

My degree is in mechanical engineering, so I love to solve

and later formed the organisation known now as the Merchant

problems. However, I started my payments career as a software

Risk Council. As ecommerce exploded, so did fraud, and the

engineer at Ticketmaster, which has grown into the largest and

demand for online solutions and technology to fight it. The MRC

most comprehensive ticketing platform in the world. We built our

naturally grew in membership and expanded its reach to include

payments and ecommerce platforms from the ground up, for ultra-

solution providers, issuers, card brands, law enforcement, and

high performance and scalability. About midway through my jour

other industry partners. Today the MRC consists of a diverse mix

ney at Ticketmaster, I caught the fraud-fighting bug, and dedicated

of nearly 550 member companies representing a wide variety

much of my time to making our payments and risk teams work

of industries, technologies, and services. What’s really cool is

closely together to disrupt the fraudsters. We developed internal

that nearly all the founders are still very involved with the MRC,

systems and partnered with other great companies to fight back.

either as merchants or solution provider member organisations.
Collaboration started everything and continues to be what it’s all

As an ecommerce leader, with extremely high stakes in fighting

about! ➔

fraud, my organisation joined the MRC as a Merchant Member
where I soon became very involved in the MRC community,
engaging as a conference speaker, a committee member, and
ultimately serving on its Board of Directors.

Merchant Risk Council is now a well-known asso
ciation among fraud and payments professionals,
firmly rooted in the industry. How did everything
start and what problems were the founding members
looking to solve back then?

Our mission is engagement
within our community. MRC leads
the industry with information
about fighting fraud, reducing
risk, and optimising payments.

This whole thing started almost two decades ago. In fact, the MRC
celebrates its 20th anniversary in 2020, and to this day continues
its vision of making commerce safe and profitable everywhere. It all
began when a handful of online retailers got together to discuss
their challenges in fighting fraud.

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WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

What were the key themes on the agenda of US
fraud and payment managers for this year?
Improving the customer experience is an interesting theme that
is emerging from the merchant community and is reflected in
upcoming conference agendas and the ongoing conversation. The
conflict between checkout friction and sales conversion is always
a point of discussion. Identifying fraudulent behaviour without

About Merchant Risk Council: The Merchant Risk

rejecting or offending good customers is critical because the

Council (MRC) is a global trade association providing a

market is so competitive. Identity verification, machine learning,

platform for ecommerce fraud and payments professio

deep analytics, and chargeback management are all gaining

nals to come together and share information. As a

prominence in the conversation. But, as always, the focus is on

not-for-profit entity, the MRC provides year-round

people getting better at what they do, learning from their peers,

support and education to members by offering access

and evolving together with the industry.

to proprietary benchmarking reports, whitepapers,
presentations, and webinars. The MRC hosts four

How does MRC help new entrants in the industry

annual conferences in the US and Europe, as well as

cope with the rapid changes in the payments fraud

regional networking meetings for professionals to build

and risk environment?

better business connections, exchange best practices,

Our primary mission is engagement within our community. MRC

and share emerging trends. The MRC is headquartered

leads the industry with information about fighting fraud, reducing

in Seattle, WA and has an office in Dublin, Ireland.

risk, and optimising payments. We offer and are expanding our
online education courses called RAPID Edu, which is short for

www.merchantriskcouncil.org

Risk and Payments Industry Development Education. This is
a great leg-up for professionals new to the payments and fraud
industry because they can take educational courses at their own
pace, and on their own schedule, at a time convenient to them
day or night. Currently, the MRC offers a Chargeback Essentials

How do you see this industry evolving in terms of

course and will soon be releasing a Fraud Essentials course

both challenges and innovations and how does this

followed by a Payments Essentials course in the coming year.

evolution align with MRC’s plans for 2019?

We also encourage collaboration through our mentor programme,

‘We are the MRC community and together we evolve’ was

where new folks can meet experienced professionals and get a

the theme of our autumn conferences this year, and we totally

quick introduction to key people and concepts that will improve

embrace it. The business of fighting fraud is changing at a rapid

their skills. Our website is packed with case studies, webinars,

pace, and merchants must adapt together. The fintech industry

surveys and whitepapers (as well as other relevant content

is bursting at the seams with new and better ways to identify

to help educate) and our community forums spur important

and stop fraud. The very cool thing about the collaboration that

conversations. Last but certainly not least, we offer four annual,

the MRC generates is that we, as a community, solve problems,

best-in-class conferences in the US and Europe as well as

and share the solutions. It’s an arms race, for sure. We know that

regional networking events throughout the year. We truly have so

fraudsters collaborate. They share tools and resources on the dark

many avenues through which our merchants can learn and grow.

web. They exchange information about what works for them, and
what doesn’t. The best way to beat them is for merchants, large
and small, to work as a team. That’s what the MRC is all about.

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WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

Best Practices of Mitigating Fraud
in Ecommerce – the State of Affairs
in Ecommerce Verticals

Fraud in Ecommerce – Diagnosis and Treatment
Mirela Ciobanu | Senior Editor | The Paypers
Ecommerce as a whole continues to be a prime target for monetising stolen identity credentials harvested from data
breaches. Stolen data (and identities) will be used by criminals for two main purposes: opening new accounts (which
can lay dormant for periods of time and then used to make payments using stolen card details) and taking over existing
accounts (to purchase goods and services, steal credentials and payment details).
Once fraudsters have stolen account credentials, they don’t wait around, but use them to commit account takeover
(ATO), Sift Science security specialists warn us. For businesses that experience the highest rates of ATO, a compromised
user’s account activity increases an average of 22x within a week of the takeover. Fraudsters use stolen credentials as much
and as quickly as they can before the user or business redeems control of the account.
As mobile is becoming the key enabler at almost every stage in the customer journey, fraudsters have now realised that
if they perform a SIM swap, or even port out a telecoms account service, they can gain the ability to not only add
services to the telephone account, but also use the phone number to intercept and approve financial transactions,
compromising both the victim’s financial services and their telephone account, says Jason Lane-Sellers, CFCA President &
Director.
SIM swap fraud is largely made possible due to the fact that customers are able to switch SIMs while carrying their current
phone number with them. Fraudsters exploit this possibility, calling network operators and posing as the victim claiming
to have lost their SIM card or needing switch to a new provider. If the fraudster successfully passes the security questions
asked by the operator, they will be able to transfer the victim’s phone number over to a SIM card in their control.
Another type of fraud encountered in the online luxury industry is Mail Order/Telephone Order fraud (MOTO). MOTO
is a form of ‘card-not-present’ transaction, where services are paid for and then delivered via the internet, telephone, or
mail. For a Switzerland-based luxury goods holding company, Richemont, this type of purchasing represents 50% of the
transactions, and therefore the risk associated with it is increased, as the MOTO channel is also preferred by fraudsters.

Challenges and recommendations
Some key challenges for ecommerce merchants are: balancing an optimised customer experience with low friction
authentication, shortening processing times for orders, the ability to effectively identify good returning customers,
while also maintaining effective fraud control. Also, with the advent of PSD2 in Europe, businesses need to integrate
risk-based authentication with low-friction SCA in order to avoid introducing unnecessary friction into the
payment flow.
One way to do this is through device binding, a process that allows users to transact on trusted devices without
repetitive authentications. This occurs through reliable and consistent verification of the transacting device, by
registering the device and binding it with a user credential. ➔

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WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

Fraud in Ecommerce – Diagnosis and Treatment
Another way to understand potentially high-risk scenarios in ecommerce/chargeback situations is to create a unique digital
identifier for every transacting user, and visualise the relationships between all the entities linked to that user, such as device
information, tokenized email address, and other account markers.
Enterprises need to ensure they have dynamic, behavioural analytics-based fraud detection systems in place, which can
both identify good returning customers in unusual situations (such as travelling abroad to the World Cup/ Winter Olympics),
as well as spotting fraudulent use of credentials, which criminals try to mask by hiding in unusually high transaction volumes.
Fraud and risk managers should also take into account quantifying the revenue impact of false positives and poor customer
experience due to legacy techniques and policies aimed at reducing fraudulent events. They are advised by Gartner to
consider an expanded ROI calculation to increase revenue opportunities, as well as reduce potential fraud losses.

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WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

Sift Science
The Paypers sat down with Kevin Lee, Trust & Safety Architect at Sift Science, to find out the latest trends and developments
in fighting loyalty fraud in travelling industry.

About Kevin Lee: Kevin Lee is driven by building high performing teams and systems to combat
malicious behavior. He has worked for the last 10+ years around developing strategies, tools and teams
responsible for billions of users and dollars of revenue. Prior to Sift Science, Kevin worked as a manager
at Facebook, Square and Google where he lead various risk, chargeback, spam and trust and safety
organizations.

Kevin Lee | Trust and Safety Architect | Sift Science

Sift Science is a technology vendor for online travel

Legitimate users rarely bother to log out of websites. The timing

agencies (OTA) that seek to fight fraud. Can you

and logging out are two signals that could point to fraud.

portray your typical customer?
Our typical customers are companies seeking an innovative

Other vendors also use rules that don’t scale, are static, and don’t

techn ological approach to fighting fraud, while also placing

adapt to changing fraud patterns. At Sift, our real-time machine

equal importance on maintaining an excellent user experience.

learning based on an ensemble of models and 16,000+ signals is

Customers who have something of the best results with us tend

a real differentiator.

to operate with low-margin, high-volume, instant-delivery busi
ness models. They also often have lean fraud teams and rely
heavily on automation.

What are these customers currently doing wrong in
stopping fraud and what are the challenges they are
facing?
In the online travel space, fraud teams must make accurate realtime decisions for high average order amounts, looking at users

Loyalty programmes
create financial liability for
companies, since so many
travellers accumulate large
unused balances.

that are new to the system or don’t make bookings very fre
quently. This is very challenging, because you don’t have as
much data on these travelers, and there is high financial risk

How do loyalty programs work in this industry and

involved in every decision.

how do fraudsters exploit them?
Forget bitcoin – loyalty points are the original digital currency.

Many fraud prevention vendors only look at transaction data, which

Loyalty programs create financial liability for companies, since

results in lower accuracy. Behavioral data is extremely valuable

so many travelers accumulate large unused balances. These

for preventing fraud. Imagine this scenario: a legitimate travelers

balances are attractive targets for fraudsters, since they’re easy

buys flights to Barcelona, spending time browsing for the best

to drain, and you don’t need to input payment info to redeem the

deal, choosing seats, checking out hotel packages, and sending

points. Loyalty fraud is a growing crime, with 11% of card-not-

the itinerary to family members. It takes a while. In contrast, a

present fraud attacks on loyalty and rewards points accounts in

fraudster may complete the entire shopping process in two

2017 – up from 4% in 2016. ➔

minutes and then log out.

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WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

In a typical scheme, a fraudster will use stolen login credentials
obtained from a data breach or hack to gain access to a
traveler’s account. Then, they use the “transfer points” option to
liquidate the balance. A fraudster may also use stolen credit card
information to purchase multiple airline tickets, accumulating
a huge amount of loyalty points and quickly redeeming them
before the crime is discovered.

About Sift Science: Sift Science is a machine learning
company that fuels business growth by empowering

Unfortunately, most loyalty programs have minimal security in

world-leading online businesses to drive risk-free

place to curtail this abusive activity in order to provide the most

user experiences. Sift dynamically prevents fraud

friction free customer experience as possible. In fact, many

and abuse by combining industry leading technology

companies choose to whitelist these customers in order to

and expertise, a global data network and long-term

circumvent any security checks, which is especially problematic.

customer partnership. Global brands such as Twitter,
Airbnb, Yelp!, Shutterstock, Jet.com, Indeed and Wayfair

How are companies in the travel industry currently

rely on the Sift Science Digital Trust Platform for access

fighting/preventing these problems? Does a solution

to a global network of fraud data, 16,000+ fraud signals,

for preventing loyalty and travel fraud truly exist?

and its unique ability to detect and prevent fraud in real

Some solutions that travel companies use to prevent loyalty

time.

fraud include:
● Setting limits and rules on how fast customers can earn points

www.siftscience.com

and spending requirements to accrue points
● Establishing manual review teams to spot abusive behavior
● C hecking customer point transactions histories, looking for
how long and at what pace a person accrued points, as well as

Click here for the company profile

how fast those points were spent
● Introducing 3-D Secure or other verification methods
However, these solutions not only negatively impact the custo
mer’s experience – customers don’t want to be made to spend a
minimum in order to accrue points or have to remember a pass
word to verify their identity – they also require more labor and cost
on the merchant’s end. Sixty percent of online businesses are
concerned about spending too much on manually reviewing
orders.
A true solution to preventing fraud is multi-layered. It’s not just
about eliminating fraud, but more about limiting exposure and
enabling your top line to grow. At the foundation is the ability
to ingest a high volume of data from all stages of the customer
journey. Then, you need sophisticated technology like real-time
machine learning to uncover patterns in the data, so you can
both automate accurate decisions and empower your review
team to take the right action on gray-area cases.

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WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

About-Fraud.com
Airlines Need Better Anti-Fraud Data

About Ronald Praetsch: Ronald Praetsch is Co-Founder and Managing Director of about-fraud.com. He also
consults regularly with merchants, payment service providers, and fraud solution vendors. Before founding
about-fraud.com, Ronald spent close to a decade in various payments and fraud prevention roles at Sift
Science, Fareportal, Booking.com, and Pay.ON, in both Europe and North America.

Ronald Praetsch | Co-Founder and Managing Director | About-Fraud.com

Data breaches at major airlines have been in the news a lot lately,

You can also add the use of device identity data in fraud preven

highlighting the increasing supply of basic payment data in the

tion, which is becoming commonplace enough that some provi

black market economy. British Airways, Air Canada, and Cathay

ders of traditional personally identifiable information (PII) now

Pacific all lost millions of clients’ credit card numbers, email

supply device ID data in their solution offerings as well.

addresses, passport numbers, and more, which will probably
be used in attempts to defraud other airlines and travel industry

There are dozens and dozens of fraud solution vendors that enable

merchants. What hasn’t changed, worryingly, is that many large

merchants to seamlessly incorporate these new data types into

airlines still rely on basic fraud checks that can easily be bypassed

their payment flow. About-Fraud.com regularly updates a list of

by 21st-century fraudsters and have yet to implement more ad

these vendors, filtered by solution type, so merchants should

vanced fraud prevention solutions based on richer data sets not

have no trouble locating them. Unlike older fraud prevention tools

yet compromised by these fraudsters.

like AVS, airlines also need not worry about the geographical
limits of these solutions. There are at least a couple of solutions

Many airlines today rely on legacy infrastructure and anti-fraud

active in every major geographic market and all the new data

solutions based on technology developed in the ‘80s and ‘90s,

types and the technology they leverage are truly global in nature.

such as address verification services (AVS) and card verification
numbers (CVN). A quick look at the data available on the open

Fully benefiting from automated risk scoring

web and in dark web marketplaces would quickly reveal to any

Airlines should not be late adopters to advanced fraud prevention

payments executive that these identifiers are compromised and

technology. Their business model leaves them more exposed to

can be bought cheaply and in bulk by fraudsters.

fraud than the typical merchant. Currently, airlines use a number
of different sales channels, including their websites, online travel

Get better data

agencies, consolidators, and travel agents, but many still only

What are the airlines missing? Today, there are many more

apply one uniform set of anti-fraud rules across these very diffe

classes of data that can be used to authenticate transactions.

rent channels. Moreover, airline customers come in every shape

This includes biometric data, behavioural data, and device iden

and form, from locations all over the world. Some customers still

tity data. Now, you can determine if a person is who they say

plan their trips months in advance, but the entire travel industry

they are by authenticating their voice, their thumbprint, or their

is experiencing growing volumes of last-minute purchases by

eye scan. If you are trying to minimise friction in your checkout

both business travellers and tourists. This makes it very difficult

process, you can authenticate a customer by how they interact

to create a clear rules set that will block the fraudsters without

with your webpage and/or their device – a technology that is

losing a significant number of legitimate purchases. ➔

becoming increasingly popular, especially with banks.

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WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

Unsurprisingly, a recent CyberSource study found that airlines
still need to manually review 18% of orders, despite only 12%
of manually reviewed bookings ultimately being cancelled. While
this represents a significant improvement – over 27% of trans
actions were manually reviewed in 2014 –, it is still too high.
Bringing down the manual review numbers even further would
require not just increased automation but smarter automation, ie
artificial intelligence solutions fed with enough meaningful data

About About-Fraud.com: About-Fraud.com delivers

points that they can make decisions not only faster, but also

expert knowledge on technology and trends to a global

better than the typical fraud analyst.

community of a fraud fighting professionals. Fraud
management is super complex, with online businesses

Data is the lifeblood of fraud prevention

struggling to understand and keep pace with evolving

A handful of major platforms have enabled airlines to bring down

trends, technology, best practices and providers.

their manual review rate and adapt to changing and complex

To these businesses About-Fraud.com provides market

fraud trends with automated risk scoring engines that utilise

research and consulting services.

machine learning models to predict transaction risk. But even
the most advanced machine learning algorithms won’t solve the

www.about-fraud.com

problem of ‘garbage in, garbage out’. Put simply, to dramatically
reduce fraud and false positive rates these systems need large
amounts of data that can be used to distinguish customer iden
tity and risky transactions.
To cut down on revenue lost to inefficient fraud prevention mecha
nism, airlines need to spend more time and resources on testing
the efficacy of new data types for preventing fraud across different
sales channels. The big banks are doing it. Apple and Microsoft
are doing it. It’s about time the airline started doing this seriously
as well.

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WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

Communications Fraud Control Association
Telecom Fraud – The Impact of Digitalisation

About Jason Lane-Sellers: Jason is a highly experienced fraud professional who has been working in
the telecommunications industry for 20+ years, and he is currently President of the Communications
Fraud Control Association. He has a wealth of experience within operators and vendors covering fraud,
risk & revenue assurance.

Jason Lane-Sellers | President & Director | Communications Fraud Control Association

The telecom world is changing, all while enabling the digitisation

them to be used for an account creation. These mules are often

of services across different sectors; these changes, however, are

recompensed immediately and do not necessarily realise that

increasing the fraud risks and threats within the telecom world

the details they provide will be used for a fraud attack and may

itself. Due to digitalisation, telecom services can be both the point

damage their future credit profile. As such, it is difficult for service

of attack to initiate fraud, as well as the victim of fraud.

providers to identify mules as the details being used to create an
account are genuine and not falsified.

As the phone has become a common authentication point for
many financial or ecommerce services, fraud against telecom

A synthetic identity is when an identity and a credit profile are

consumers and the telecom services is rising rapidly. Further

created by combining both genuine and fake data in order to

increases in fraud impacts are due to the inherent value of

set up accounts across multiple services – services which may

the equipment being supplied by telecom providers, thus

be very low value, but with small credit interactions. This can

becoming attractive targets for the criminal fraternity, as they are

then create an impression of a credit active consumer, so when

items that can be quickly cycled to revenue.

the synthetic ID is used for a major purchase, the credit file and
history are apparent and warning flags may not be raised.

The rise in consumer-based fraud attacks against telecom services
is highlighted within the last Communications Fraud Control Asso

The growth of online and ecommerce channels allows the use of

ciation fraud report, which showed a combined value of over USD

“mules” and synthetic identities in high volumes remotely, thus

11 billion lost to various types of consumer-related attacks, and

enabling attackers to manipulate thousands of transactions over

even this number is thought to be highly underestimated.

a short period of time.

Recent years have seen a re-growth in subscription fraud attacks,

Account takeover has been the fastest growing form of fraud

in order to gain equipment and services. As well as over 300%

for telecoms over the past few years. Much of this is attributable

growth in account takeover attacks in order to compromise the

to the changing nature of service provision. Customers now expect

consumer themselves, particularly in relation to financial services.

instant access to accounts, simplified services, and recognition of
loyalty. As such, often accessing and adding services or equipment

Although subscription fraud has been a perennial problem for

to existing accounts is faster and simpler, with fewer checks and

almost all service industries, recent growth has been focused

verifications than opening new accounts. Fraud operatives have

around the use of “credit mules” or synthetic identities.

targeted such principles ruthlessly. ➔

“Mules” are when a genuine entity has been approached and
knowingly passes on their personal details in order to allow

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WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

In the early stages of account takeover growth, a large focus
for fraudsters was on the ability to upgrade equipment or add
additional connections and equipment to existing accounts – if
you could access the customer account, you could perform these
actions to gain equipment for resale. However, the growth of
digital services across the different markets means that there are
other reasons to compromise a telecom account. Taking phone

About Communications Fraud Control Association:

numbers as a case in point, which are increasingly being used

CFCA is a not-for-profit global educational association

as an authentication tool for ecommerce and online financial

that is working to combat communications fraud.

services, whereby a message or call is sent to the phone/cell

The mission of the CFCA is to be the premier inter

to approve an ecommerce or financial transaction. Fraudsters

national association for revenue assurance, loss

have now realised that if they perform a SIM swap, or even port

prevention and fraud control through education and

out a telecom account service, they can then gain the ability

information. By promoting a close association among

to not only add services to the telephone account, but also

telecommunications fraud security personnel, CFCA

use the phone number to intercept and approve financial

serves as a forum and clearinghouse of information

transactions, compromising both the victim’s financial services

pertaining to the fraudulent use of communications

and their telephone account. This proves doubly damaging for

services.

the telephone provider, as they are seen as responsible for the
attack against the financial transaction, as well as for the phone

www.CFCA.org

account.
Now, most of the growth in these types of fraud has been driven

Click here for the company profile

via the digitalisation of services and provision of apps, online
self-service, and digital interactions. Therefore, from a fraud
management point of view, in order to start to manage or prevent
many of these types of attack, it is necessary to understand the
nature of the customer and digital services. As these attacks

The most advanced solutions amongst these allow the crowd

are manipulated across different marketplaces, it can be difficult

sourcing of data across verticals, for a complete digital picture.

for traditional service providers to adapt.

These solutions enable the provider to openly promote the use
of online services, whilst validating data and ensuring trust in

Therefore, telecom providers need to be able to understand

interactions across their digital channels. Operators who are not

and identify their customers in the new digital world. As we

following this trend or approach are quickly becoming the targets

move into the crossover between service provision, access, and

of the advanced criminals to a frightening scale.

utilisation, where people interact with multiple devices, in multiple
locations and across services, it has never been more important
to be able to profile an entity as a complete digital persona.
Leading organisations in the telecom world are now integrating
digital identity solutions in order to protect their customers, authen
ticate interactions, and prevent fraud attacks.

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WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

Emma Mohan-Satta
Sim Swap Fraud – an Attack in Multiple Stages

About Emma Mohan-Satta: Emma has been working in fraud prevention for the past decade developing
knowledge across financial services and ecommerce. After working for American Express, she gained
experience with a number of fraud prevention vendors and now looks after fraud risk and strategy for a
fintech startup called Capital on Tap.

Emma Mohan-Satta | Senior Fraud Manager

With ever more finance and ecommerce apps present on our

Victims often struggle to tell the difference between these highly

smart phones, SIM swap fraud is a lucrative choice for fraudsters

personalised and sophisticated requests for information against

looking to gain access to victim accounts, credit cards, and

legitimate communications from their bank or websites they

personal data. Online account providers, from social media to

frequently use. Key information such as full names and dates

ecommerce and banks, frequently encourage users to add a

of birth can also be gained by searching social media or other

mobile phone number as part of their “two-factor authentication”

public websites allowing a potential fraudster to quickly complete

strategy in order to secure their users’ account access or before

a profile of their intended victim or victims. This research stage

allowing users to carry out financial transactions. The mobile

of the attack will often help the fraudster discover which banks

phone number linked to the user account is then used to validate

or ecommerce sites are used by the victim, and so the fraudster

that future attempts to access services are made by the genuine

will know which companies to target once the SIM swap stage of

customer. But what if a third party has managed to gain control

the fraud has been successfully carried out.

of this number?
Once the fraudster has control of their victim’s phone number,
SIM swap fraud is largely made possible due to the fact that

relatively unlimited access is available to any of the victim’s

customers are able to switch SIMs while carrying their current

accounts that use SMS messaging as the second factor for

phone number with them. Fraudsters exploit this possibility,

authentication. Security texts will be sent to the number now

calling network operators and posing as the victim claiming to

in the fraudster’s control, locking the victim out of their phone

have lost their SIM card or needing switch to a new provider.

and their accounts. When successfully combined with social

If the fraudster successfully passes the security questions asked

engineering, SIM swap fraud can lead to the equivalent of a

by the operator, they will be able to transfer the victim’s phone

“device takeover” attack as the victim’s Apple account, for

number over to a SIM card in their control.

example, can be set up on a new iPhone in the fraudster’s
control. This is made possible as long as the fraudster possesses

As additional personal information about the victim is required in

all of the vital security answers which will have been gathered

order to complete this kind of attack, SIM swap fraud is frequently

during the social engineering stage of the attack and may allow

the second stage in a wider fraud attack usually starting with

the fraudster to go as far as adding a new fingerprint ID to the

targeted social engineering. Potential victims are identified and

victim’s Apple account. At this stage, all of the victim’s iPhone

targeted with phishing emails or calls seeking to discover personal

apps, and therefore financial data stored within those apps, are

data including passwords and secret answers.

in the fraudster’s hands. ➔

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WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

While the victim is likely to detect the issue relatively quickly
when access is lost to their phone number and device settings,
putting it right and regaining control of their identity can prove a
time-consuming problem while operators and account providers
seek to confirm the true identity of the customer. This additional
time allows the fraudster to complete their attack and drain the
victim’s accounts or gain further personal data for carrying out
future attacks such as setting up new fake financial accounts in
the victim’s identity.
Online account providers, particularly in the financial services
industry, can look for risk indicators such as a change in device
behaviour to identify a change in identity behind the account
access. This may lead to taking additional precautionary and
verification steps before sending a second-factor text message
to a number under the control of a fraudster. Providers may also
wish to consider the use of app-based authentication where the
device itself, rather than the phone number, forms part of the
authentication. When a significant change in device or device
settings is detected, additional steps can be taken before sending
the authentication code to prevent a fraudster from intercepting
this valuable code.
Users can also limit the potential for their own accounts being
caught in such an attack by limiting the amount of information
they reveal about themselves online and exercising caution
when receiving emails or calls purporting to be from their bank.
By avoiding the social engineering stage of the attack, the poten
tial for a fraudster to carry out a SIM swap is greatly reduced.
Victims may also become aware that they have become the victim
of SIM swap fraud when they lose phone signal and so should be
advised to contact their phone operator immediately if this occurs
unexpectedly without regaining signal soon after.
While the increased use of two-factor authentication continues
to help in the fight against online fraud, companies should be
aware of the potential to exploit the frequently-used SMS second
factor. Businesses should continue building layered strategies
and using technology to identify suspicious account activity and
fraud risk to avoid an over-reliance on SMS security codes in
customer authentication.

45

WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

Ubisoft
Sithy Phoutchanthavongsa, Ubisoft’s fraud expert on the status of online gaming industry fraud, with insights into the grey
market

About Sithy Phoutchanthavongsa: Sithy is the fraud expert at Ubisoft. He has 10 years of experience in
fraud detection and prevention strategy performed within banking and ecommerce sectors, first as part of
the business teams and then as a fraud service provider. He joined the Ubisoft ecommerce team in 2016.
His mission is to define Ubisoft’s fraud strategy and to dig out and respond to any risk related topics.

Sithy Phoutchanthavongsa | Fraud expert | Ubisoft

What are the main types of fraud in the online

In terms of fraud detection, the most important is to have a

gaming industry and what transaction types are the

consistent payment method strategy for each geographical area.

most affected?

Then you should be aware of all the specificities related to the

As the gaming industry becomes increasingly digital, it becomes

main payment methods. Is it easy to do a chargeback? What is

exponentially exposed, especially at a transactional level. While

required to open the payment account? How does the payer log

the videogame consumer population is particularly aware of grey

in his account?

markets and tricks, fraudulent channels of retail are easy to put in
place. Well-informed final customers just need to give the fraud
ster their player account credentials so the fraudster can process
the transaction on their behalf with a stolen payment method.
All of these points make the fraud on gaming products attractive to
fraudsters. Immediate consumable digital contents, like in-game
currency, are the most popular products among fraudsters.
In that case, it is not only about the financial impact, but this
situation also brings inequity between players who can afford to

The best tools for fraud
detection would never be
complete without both a good
knowledge of players and a
consistent external/customer
communication.

buy extra content to be more competitive and those who can’t
or don’t.
For example, 3-D Secure in Europe is reliable, while the charge

Given the international coverage, what insights can

back process is easier in North America. Some countries tend

you share with us regarding fraud across different

to use payment methods that can be more trustworthy because

countries?

they need more authentication clearances during the account

Because most of the defrauded products are digital content,

creation process, or during the transaction step itself.

the underground videogames market is global.
Take all of these specificities and build a tailored fraud strategy
It is very important to be able to display a consistent product

according to each area. ➔

pricing list all over the world as well as it is important to be able
to properly identify the customer’s country. This way you will avoid
customers from strong currency countries buying on softer
currency countries.

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WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

What are the best fraud prevention strategies for
securing both the online gaming platforms and the
consumers’ data? Is there any particular authen
tication method that you recommend?
During the real-time scoring, it is important to couple both a wide
enough metrics panel and the knowledge you have on the player.
We consider that whatever metrics say about the customer

About Ubisoft: Ubisoft is a leading creator, publisher,

during the transaction, it always has to be contextualised by the

and distributor of interactive entertainment and services,

data on players’ habits, stats, history.

with a rich portfolio of world-renowned brands, including
Assassin’s Creed, Just Dance, Tom Clancy’s video game

Reactivity is also key and has to be optimum; because digital

series, Rayman, Far Cry and Watch Dogs. The teams

transactions are instant delivery, it is important to put in place

throughout Ubisoft’s worldwide network of studios and

dynamic tools and rules that can be updated very quickly, such

business offices are committed to delivering original

as with machine learning systems.

and memorable gaming experiences across all popular
platforms, including consoles, mobile phones, tablets

As for the player’s data protection, Ubisoft takes the GDPR rules

and PCs.

very seriously. We have a dedicated team in place to help apply
it everywhere it is needed, every step of the way, and maintain

www.ubisoft.com

our policy up to date.
When it comes to authentication, any type of two-factor authenti
cation is recommended, whether by mobile or email. On top of
regular transaction authentications, education is key. Providing
players with all the necessary information to understand why and
how to protect their account can help change their habits.

How are you dealing with false positives and false

We encourage fraud prevention experts to share

negatives? What challenges do you encounter in this

their knowledge with their peers in order to bring a

matter?

positive impact on the online business environment.

Obviously, using relevant analytics tools and defining and

Therefore, what advice can you give to other mer

monitoring the appropriate metrics helps. Yet, the importance

chants so they can keep their business secure and

of communication and collaboration with teams outside of the

their customers loyal?

fraud department should not be underestimated: customer

Ubisoft’s ambition is to maintain a direct and active channel

service or business operational teams can definitely help reduce

with players. The best tools for fraud detection would never

false positives on the condition to build an efficient channel of

be complete without both a good knowledge of players and a

knowledge sharing and information escalation. This is a great

consistent external/customer communication. The benefits of fair

way to reduce friction generated by false judgement.

play between players, the importance of securing their accounts,
and not buying from unauthorised resellers, the reasons for

At Ubisoft, our main challenge is that, with over 14,000 employees

limiting friendly fraud behaviors… All of the above should be

located in more than 30 countries, we need to keep everybody

brought to players’ awareness in an educative and appropriate

on the same page and streamline feedback collection.

way. This combination is key for fraud mitigation success.

47

WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

Richemont
With Low Order Volumes, Richemont Faces a Different Fraud Review Challenge

About Leon Brown: Leon Brown is the Fraud & Payments Manager for Richemont. Leon is managing
the Fraud & Payments for all ecommerce Maisons, operating under the Richemont umbrella. With nearly
ten years of experience in Fraud & Payments, Leon’s previous experience includes Selfridges and Neta-Porter.

Leon Brown | Fraud & Payments Manager | Richemont

When implementing a fraud strategy for each Richemont brand,

MOTO, an acronym for Mail Order/Telephone Order, represents

the key is to ensure we provide an efficient and seamless verifi

50% of the transaction split for Richemont. Due to the value of

cation process. This rules out the possibility of using any verifica

the products sold within Richemont brands, we find that the client

tion method that may cause delay to the shipment’s order or incon

usually prefers to speak to a brand specialist before deciding on

venience to the client. As less than 30% of Richemont ecommerce

the purchase. Unfortunately for us, the MOTO channel is also

orders are placed by returning clients, good customer service plays

preferred by fraudsters.

a crucial role in the way we handle orders placed predominantly by
new clients.

Since we introduced 3-D Secure in 2017, we have seen a change in
the fraudster’s behaviour. As illustrated in the chargeback analysis,

Fraud challenges at Richemont

we have seen the fraudsters drastically shifting from targeting the

As an online luxury retailer, we face many challenges with fraud

websites to targeting the MOTO channel and placing an order via

management. At Richemont, we experience vast volumes of card

Customer Services. ➔

testing fraud in Italy and France; in the UK, we see an emergence
of 1st party fraud and account takeovers. However, our biggest
challenge for the Richemont Fraud & Payments team is fraud on
MOTO orders.

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WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

What is a MOTO order and why is it the preferred
target of the fraudsters
Mail order telephone order is when clients decide to contact the
Customer Relations centre, as they want to place an order over
the phone, instead of using the website. There are several reasons
for why this happens. The main reason is that many of our clients
prefer the experience of speaking to a trained brand expert for
reassurance before making such a huge investment. Another rea

About Richemont: Richemont owns several of the

son is that many of our clients may experience problems placing

world’s leading companies in the field of luxury goods,

an order via the website due to the widespread issue we have with

with particular strengths in jewellery, watches, and

card issuers declining high-value transactions under the “do not

writing instruments. Our Maisons encompass several

honour” reason code. Once the client is put through to a brand

of the most prestigious names in the luxury industry

specialist, their order is placed by the specialist using an internal

including Cartier, Van Cleef & Arpels, IWC Schaffhausen,

version of the website. Once the order is complete, the client will

Jaeger-LeCoultre, Officine Panerai, Piaget, Vacheron

receive confirmation of their order via email.

Constantin, Montblanc, Alfred Dunhill, and Chloé.

The reason a fraudster prefers to place an order via the MOTO

www.richemont.com

channel is a simple one: lack of security.
On the website, we are protected by 3-D secure in most cases, and
for the boutiques, we have chip & pin. For MOTO, we have none
of the security features mentioned above. To place a MOTO order,
you need an address, a card number, expiry date, and the CV2.
In the UK, the US or Canada, we sometimes have the AVS for

Verification question. It’s always tricky when you have to remem

reassurance; but what happens when we have a high-value MOTO

ber a lie. Based on our experience, this is usually the case with

order from France or Italy, where AVS is exempt, with a billing

fraudsters. If we highly suspect a MOTO order, there is no harm

and shipping address mismatch?

in calling the client to verify a few order details. What we find in
most fraud cases is a hesitance or reluctance to confirm certain

Rejecting an order, just because there is no AVS or because there

aspects of the order. For example, the fraudster can verify the

is a mismatch with the billing and shipping, is not an option.

shipping address but struggles to confirm the billing address.
It’s crucial that you understand your typical client and use this as

Dealing with the risk of MOTO at Richemont

a benchmark when speaking to a potential fraudster to identify

Although 76% of chargebacks received is through the MOTO

discrepancies in their behavior, the tone of voice.

channel, the fraud and chargeback rate for Richemont is still com
fortably below the acceptable industry average. Here are a few tips

Feedback. Speak to your Customer Service department and ask

we use to manage fraud on MOTO orders.

for feedback. How long did the client spend selecting the product,
compared to your typical client? If the item he requested was out

Fraud tools. It’s essential to research and invest in tools that can

of stock, was the client specific with their back up option, or was

help you with order verification. In particular, invest in tools that

the client just eager to complete the transaction?

can help you with address, email, and phone number verification.
Since the implementation of several fraud tools, we have drasti
cally reduced fraud in key markets like the UK.

49

WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

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45

COUNTRIES

Best Practices of Mitigating Fraud in Banking

Fraud Mitigation - Key Challenges for Banks
Mirela Ciobanu | Senior Editor | The Paypers
The financial services industry continues to position itself in a juggling position, with banks and financial services institutions
facing multiple challenges tied to regulations, legacy systems, disruptive models and technologies, new competitors, and
a highly demanding customer base, while pursuing new strategies for sustainable growth.
For 2018, banks have had to deal with managing their digital channels and threats associated with their use, such as new
account opening and account takeover, implementing the Open Banking and Instant Payments initiatives, bringing to life
the ultimate digital banking experience, adopting cloud services and data analytics, all frosted with the increased threat
posed by fraudsters that are getting more and more sophisticated.
As the threat environment continues to escalate, effective fraud prevention has become an increasingly competitive
issue for FIs. According to a research conducted by iovation and Aite, the most challenging fraud cases for FIs are
sophisticated card fraud, application fraud, account takeover (ATO) attacks, wholesale ATO, and the spectre of faster
payments.

Fraudsters getting more sophisticated
Despite efforts to control payments fraud, it appears financial institutions and businesses across the globe are fighting a
losing battle. A TransUnion study has revealed that 94% of financial services have experienced fraud within the last two
years, such as identity theft, synthetic identity fraud, or account takeover.
In addition, the European Payments Council (EPC) issues a yearly report on trends in security threats that affect the
payments landscape. In its most recent report, from December 2017, the organisation identified the main payments
threats, some of which we will try to cover briefly in our article:
- a greater degree of professionalism of cybercriminals shown by the organisation and sophistication of recent cyber
attacks;
- the number of DDoS attacks is on the rise, with bad actors frequently targeting the financial sector;
- the attack focus has shifted from malware to social engineering attacks;
- botnets still remain a significant attack vector, and because of the high volume of infected consumer devices (eg PCs,
mobile devices, etc) severe threats remain;
- mobile devices and IoT devices are becoming an attractive target for cyber criminals;
- the adoption of cloud services together with big data analytics technologies, which results in data stored ‘everywhere’,
are bringing new opportunities to businesses, but new risks as well.
The financial services industry has always been heavily regulated, and security and fraud prevention mechanisms are
generally stronger than in other industries. Nevertheless, fraudsters see fintech providers as easier targets than traditional
financial services companies as they attempt make use of new and emerging platforms to exploit gaps in process and
infrastructure. ➔

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WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

Fraud Mitigation - Key Challenges for Banks
Some of the reasons behind this vulnerability could be that fintech companies do not necessarily have the resources such
as skills and funds to implement sophisticated fraud defence/detection mechanism. According to JAX Finance speaker
Rona Ruthen, fintechs are especially vulnerable, as in the early days the team is very lean, and the focus is on developing
the product/systems and finding the product-market fit. Fraudsters know that, so they target fintech companies early on,
and adapt very quickly to changes in controls.
Nevertheless, big financial services companies’ customers are also targeted, despite having strong defences. One of
the most effective ways of defrauding customers is to lure them into complex social engineering scams that result in a
genuine customer unwittingly transferring funds to a mule account, or even allowing direct account access.
These attacks/attempts can take place across many channels, including email, SMS, calls, and social media channels,
as any communication channel used to communicate with customers and users can be exploited by an attacker, with
varying degrees of sophistication required to carry out the attack. All types of social engineering attacks continue to be
used by attackers of varying levels of capabilities, with particular increase in Business Email Compromise emails and
phishing emails that result in malware being deployed on computers.
To fight them, financial institutions are advised to put the appropriate transaction filtering and monitoring systems
in place and use customer profiling to detect suspicious payment transactions. However, a very important aspect to
counter the social engineering attacks is continued awareness raising campaigns.
Another big threat in financial services comes from device spoofing, as fraudsters attempt to trick banks into thinking that
multiple fraudulent login attempts are coming from new customer devices, perhaps by repeatedly wiping cookies or using
virtual machines.
Regarding the mule accounts, mule networks continue to negatively impact the global banking ecosystem, according to
the ThreatMetrix Q2 2018 Cybercrime Report. Money mules are people who serve as intermediaries for criminals and
criminal organisations. Whether or not they are aware of it, they transport fraudulently gained money to fraudsters. Thus,
the use of intermediaries makes it difficult to figure out the identity of the fraudster. The challenge for financial institutions
is how to detect mule activity when individual account behaviour may not trigger high-risk flags. To fight it, organisations
need to create mule watchlists, and build machine learning models to identify new mule networks based on existing risk
factors.

Offering the ultimate digital banking experience
Current onboarding processes are seen as time-consuming, costly, and as if they deliver a poor customer experience.
However, when trying to innovate and offer great and frictionless customer journey while banking, financial services
institutions are struggling to balance this experience with security threats. ➔

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WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

Fraud Mitigation - Key Challenges for Banks
Among these threats, on top of the list are account takeover and new account applications. Account takeover is a
form of identity theft. This type of fraud doesn’t necessarily have to start with what is traditionally considered highly
sensitive information, such as a social security number or PIN. According to Chargebacks 911, account takeover can
potentially be started from nearly any scrap of personal data: an email address, a full name, a date of birth – any identifier
entered during the validation process can work. Historically speaking, banks and card providers have been the main
targets of account takeover fraudsters.
Application fraud has become an increasing issue for organisations in industries such as banking, credit card appli
cations, instant store credit, and retail, to name a few. Some of the reasons behind the rise of this type of fraud might
be the large volume of personally identifiable information (PII) available on the black market for fraudsters to use, the
abandonment of stringent manual application review processes by financial institutions and merchants when customers
open new accounts, and fraudsters using stolen identity data combined with bots to open accounts at a very fast rate.
To prevent these types of fraud, financial institutions are advised to close the door on fraudsters before they can gain
access to any account opening processes. InAuth security experts advise businesses to watch for bot attacks since they
are capable of opening hundreds of accounts in a short amount of time, with bad actors often using the same device
repeatedly to perform the fraudulent transaction until the device is detected and disabled.
Thus, device authentication is also an important way to thwart fraudulent account opening, as it enables organisations
to verify the identity of a device by the device’s unique characteristics. Moreover, a device riskiness assessment is needed
to validate whether an additional review is necessary for the account opening process, such as bot detection, spoofing
tool detection, malware detection, and the ability to use negative lists for devices associated to fraud.

Coping with Open Banking
Under PSD2 banks must open up their systems to authorised third-party financial service providers (TPPs) to
enable these companies initiate and process payments and financial transactions at the request of the bank’s
customers. However, these requirements are a source of concern for many banks, as this access is not without risk.
According to OneSpan, formerly Vasco, the most important security and privacy threats against the APIs provided by
banks to TPPs include:
-A
 PI vulnerabilities, resulting in injection attack causing dump of personal information of bank’s users;
-c
 ompromised or malicious TPP leaking financial information obtained from bank;
-A
 PI vulnerability leading to man-in-the-middle attack manipulating transaction data;
- compromised or malicious TPP issuing fraudulent transaction request;
- flooding of API affecting quality of service for users;
- compromised or malicious TPP locking out users with invalid authentication requests.
To overcome these threats, banks are advised to use transaction risk analysis to detect fraudulent transactions and user
behaviour, choose a suitable authentication model for their users, protect the communication channel with TPPs, detect
and prevent API implementation vulnerabilities and security incidents at TPPs. ➔

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WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

Fraud Mitigation - Key Challenges for Banks
Another key aspect in the context of Open Banking is consent that needs to be explicit, as mandated in PSD2 in
accordance with the GDPR. Banks have to allow customer info to be shared, but only if that user explicitly gives per
mission to the new provider. However, third-party access to customer accounts and the associated data will inevitably
raise concerns about security and privacy. Consequently, privacy, consent, and fraud detection tools will become
crucial to customer engagement and building in trust.
As explained by Mike Nathan, ThreatMetrix, in the Open Banking Report 2018, banks must ensure the same level of
security across all access points including the Open Banking environment, with the additional check around consent.
They also must focus on risk control and put more emphasis on active risk management and monitoring.

Instant payments adoption
November 2017 saw the launch of the SEPA Instant Credit Transfer (SCT Inst) scheme, an initiative aimed at easier
and faster payments on a pan-European scale. Among the features, the most relevant one is immediacy – when the
funds are available in less than ten seconds after the transfer is initiated. One cannot omit benefits such as meeting the
demand of customers for great payment experiences and replacing paper-based payment instruments, such as cash and
cheques. However, this initiative has also left payments facilitators facing problems such as ‘instant fraud’, with banks
having to adopt operational and risk management processes such as fraud detection to spot fraudulent transactions.
In this context, in the case of authorised push payments fraud it is hard to claim the amount of money back as funds
are transferred instantly. And this is a rising concern; for instance the trade body UK Finance announced that businesses
and consumers lost GBP 236 million in 2017 through authorised push payment (APP) frauds. APP frauds take place
where a victim is conned into authorising a transfer of money from their bank account into an account, which they believe
is controlled by a legitimate payee, but is actually controlled by a fraudster.
In order to avoid APP scams, educating consumers and business towards being more alert when making electronic
money transfers is crucial. Internet users are advised to never disclose security details, such as their PIN or banking
password, and should never assume an email, text, or phone call is authentic. Never rush a payment, as ‘a genuine
organisation won’t mind waiting’, says the trade association, which adds that ‘listening to your instincts’ and ‘not
panicking’ are essential if something does go wrong.

Adoption of cloud services and data analytics
Cloud services are resources made available to users on demand via the Internet. They are offered by cloud computing
provider servers as opposed to being provided by a company’s on-premises servers. As organisations continue to migrate
on-premises services and applications to the cloud, we can deduce that they will also suffer the same fraud threats and
risk, with the addition of new ones. Weak code and software vulnerabilities in the cloud, outside the traditional perimeter
of control, may produce different types of breaches and fraud.
To prevent these issues, the European Payments Council (EPC) recommends cloud providers to have a clear set
of policies and cloud governance throughout the whole lifecycle of applications and services. Moreover, the architec
ture, applications, process, systems, and data in the cloud need to be desegregated from each other to avoid
propagation of malware or breach attacks. ➔

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WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

Fraud Mitigation - Key Challenges for Banks
Last but not least, usage of new tools and applications for cloud computing and big data need to be analysed and
assessed from the point of view of security, risk, and governance, as some tools might not be sufficiently mature to use
and could potentially cause data breaches and fraud. Therefore, companies tapping into cloud services are advised to
conduct a thorough analysis from the security and fraud perspective before making any usage or buy decision.

Conclusion
In our digital world driven by a mobile-first customer mentality, many financial institutions (FIs) have started to recognise
and act towards satisfying the need for an omnichannel experience for their customers. But this task can became difficult
as they need to determine with 99.99% accuracy the identity of the person on the other side of the computer or device,
consider real-time fraud threats and real-time fraud solutions, while staying competitive and compliant. Fortunately, the
digitization of banking services brings new technological solutions able to tackle modern security challenges and detect
suspicious behaviour efficiently, helping financial institution services to protect digital data from fraud.

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WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

Feedzai
Machine Learning Innovations for Fighting Financial Crime in an Open Banking Era

About Pedro Bizarro: Pedro Bizarro is co-founder and Chief Science Officer at Feedzai. Pedro is a
researcher turned entrepreneur: after a 10-year research career (Computer Science PhD at the University
of Madison - Wisconsin, Fulbright Fellow, Marie Curie Fellow and winner of the BES Innovation National
Competition) Pedro is now CSO at Feedzai where he leads the Research team in developing the best
fraud prevention algorithms and tools. Pedro is a high performance data processing expert that loves data,
algorithms, visualization, and machine learning.

Pedro Bizarro | Co-founder and Chief Science Officer | Feedzai

The fight against financial crime is changing and banks are

that they force users to operate within constructs that don’t make

struggling to keep up. Financial institutions are already losing

sense for their enterprises. Until now, users were left with one of

ground in the adoption of open banking initiatives like PSD2.

two choices:

Coupled with the increasing market demands for compliance and

● Work within inefficient data science environments offered by a

transparency brought on by regulations like the GDPR, it’s clear
that banks have a lot to deal with. The financial industry is quickly
shifting towards real-time payments and instant services,

vendor;
● Rely on their own (and often legacy) fraud management plat
forms that lack modern machine learning algorithms.

two key aspects of a frictionless customer experience. However,
these frameworks present serious challenges to the security

Feedzai understands that this is an impossible choice and offers a

side of things – particularly where financial crime is concerned.

third door: Open Machine Learning (OpenML). Known colloquially

At the same time, fraud schemes are growing more complex.

as “bring your own machine learning,” Feedzai’s OpenML

For example, according to Javelin, “criminals are opening more

Engine is a machine learning environment that lets users integrate

new accounts as a means of compromising accounts consumers

their own machine learning tools, libraries, algorithms, and models

already have.” And when it comes to money laundering, schemes

into the system. In essence, it gives users access to a powerful

now go beyond trafficking, with successfully laundered funds

fraud management platform while still allowing customization to

often being linked to bribery, influence peddling, corporate crime,

the user’s specific needs. The OpenML Engine includes an SDK

or political intrigue. To protect their reputation and the trust

for Python, R, and Java, while also providing close integration with

they’ve built with their customers, banks need to look beyond

machine learning tools like H20, R Studio, and DataRobot. It’s a

their existing financial crime prevention strategies and discover

revolutionary integration that gives your fraud detection system

how they can better address the world of real-time payments.

the benefits of a purpose-built platform while letting you retain
access to the open source libraries used by your own company.

Three breakthroughs in fraud management

From a customizable fraud management perspective, there’s

Over the last year, Feedzai has integrated three key features into

nothing better.

its AI platform to help banks meet the growing challenge of realtime fraud prevention. Whether used separately or in tandem,

AutoML

these tools offer powerful new ways to stop fraud in its tracks.

AutoML is Feedzai’s way of accelerating the machine learning
process and increasing the speed at which banks are able to

OpenML

confront new fraud threats. ➔

A primary drawback of many modern fraud detection systems is

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WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

Before, users had to manually execute many steps of model
development, including feature engineering, a very time consu
ming task. AutoML changes the game by providing a completely
automated solution for model generation and development, all
built into the Feedzai platform:
● Automatic feature engineering;
● Automatic model training;

About Feedzai: Feedzai is the market leader in fighting

● Automatic hyperparameter optimization;

fraud with AI. We’re coding the future of commerce

● Automatic model selection.

with today’s most advanced risk management platform
powered by big data and machine learning. Founded

Other AutoML platforms on the market (such as those offered by

and developed by data scientists and aerospace

Google) require substantial GPU capacity that most organizations

engineers, Feedzai has one mission: to make banking

just don’t have. Feedzai’s approach works differently, relying on

and commerce safe. The world’s largest banks,

patent-pending, semantic-based automatic feature engineering

processors, and retailers use Feedzai’s fraud prevention

which significantly cuts down the needed processing power.

and anti-money laundering products to manage risk

AutoML relies on a short and simple user-defined configuration of

while improving customer experience.

the semantics of each field which is then used to produce features
automatically. Overall, this allows financial institutions to quickly

www.feedzai.com

iterate on many models and configurations very quickly with
minimal processing power. For example, complete profiles can
be built around a single card, including the number of declined

Click here for the company profile

transactions in a given time period, the distance between every
transaction location, the time between consecutive transaction for
each card user, and more. All of this is done through an automated
framework that requires minimal input from the data scientist,
reducing the classic data science workflow timeline from eight

the same patterns that may take fraud analysts weeks to recognize.

weeks to one day. Less time spent on model creation means more

This goes beyond mere data analysis or risk scoring and creates a

time spent on data analysis.

new type of fraud detection system:
● Offering deeper and more thorough assessments of the complete

Genome

financial data set;

Feedzai Genome is a powerful visualization tool that provides a

● Enabling more efficient risk assessment, including deep insight

comprehensive, top-level view of transaction data. Where OpenML

into the underlying relationships among each flagged transaction;

and AutoML advance Feedzai’s data analysis capabilities, Genome

● Being purpose-built to fight financial crime and highlight suspic

brings a visual perspective to the connections between financial

ious fraud typologies.

transactions. Using a virtualization engine, Genome displays the
interconnected relationships between transactions and creates

A systemic view of instant payments fraud

a simple way to identify patterns throughout each data set.

These advancements speak to a growing trend in financial

Users can view the relationship between each transaction, view

crime detection: the need for financial service providers to take

transaction clusters around specific cards or users, and trace

a system-wide view of interaction. From the registration of each

the complete lifecycle of every transaction made—all within

transaction to every customer touchpoint, true security comes

Feedzai’s platform. This addition brings a new level of analysis to

from complete, end-to-end assessments. The world of instant

Feedzai’s fraud detection capabilities. Images play into humans’

payments is ripe with opportunity – yet if banks want to make

natural ability to spot patterns in visual data, and by taking a

the most of these new frameworks, they’ll need to be prepared to

visual approach to transaction review, users can instantly spot

handle the challenges that will inevitably come.

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WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

InAuth and Accertify
Accertify and InAuth: Fighting Fraudulent Account Opening

About Michael Lynch: Michael Lynch is

About Jeff Wixted : Jeff Wixted

InAuth’s Chief Strategy Officer and is

oversees the global operations,

responsible for developing and leading

product strategy and roadmap,

the company’s new products strategy,

and presales functions at Accertify.

as well as developing key US and

Jeff brings over a decade of

international partnerships. He brings

experience in cardnotpresent

two decades of experience in key roles

fraud and related use cases, he

within financial services, consulting,

also serves as the Treasurer on

and Fortune 500 companies, specia

the Merchant Risk Council Global

lising in security and technology lea

Board.

dership.

Michael Lynch | Chief Strategy Officer

Jeff Wixted | Vice President of Product and Operations

InAuth

Accertify

Fraud takes place in many forms and in many industries, and

It is increasingly important to detect fraud at its earliest stage of

has been rising in recent years. According to PwC’s Global

the financial lifecycle, which, in many cases, is at the time of appli

Economic Crime and Fraud Survey 2018, 49% of respondents

cation for an account. Application fraud is a rapidly increasing

said their companies had suffered fraud, up from 36% in 2016 –

issue for organisations in industries such as banking, mortgages,

an increase driven by rising global awareness of fraud, a more

auto lending, financial lending, credit card applications, instant

robust response rate, and greater clarity around what ‘fraud’

store credit, and retail, to name a few.

actually means.
Credit card losses from accounts opened with fabricated identities
reached USD 820 million in 2017, up almost 17% from 2016. In
addition, Aite forecasts the losses to rise another 53%, to almost
USD 1.3 billion, by 2020.

What can companies do to mitigate application
fraud, particularly in digital channels?
The best way to prevent account opening fraud is to have robust
protections in place across the customer lifecycle and to close the
door on fraudsters before they can gain access to any account
opening processes. Device authentication is an important part of
thwarting fraudulent account opening, as it enables organisations
to verify the identity of a device by the device’s unique charac
teristics. Device authentication technology uses unique attributes
in each device to create a device ID. ➔

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By creating and calling on this device ID for subsequent trans
actions, organisations can authenticate trusted consumers with
the least amount of friction, providing a positive customer expe
rience. Transactions from risky devices can be flagged for nextlevel review or they can be denied altogether. If the same device
ID is opening many accounts in a short amount of time, this is
potentially a harmful bot. Another important tool in preventing

About InAuth and Accertify: InAuth delivers device

applic ation and account opening fraud is user behavioural

identification, risk detection, and analysis capabilities

analytics. By quickly recognising typical from atypical behaviours

possible to help organisations limit risk, remove friction,

online, businesses can quickly identify potential fraud and prevent

and reduce fraud within their digital channels. Accertify, a

it before it becomes a loss. Cybercriminals today use bots to

wholly-owned subsidiary of American Express, is a leading

attempt to open several new accounts at once, by being able to

provider of fraud prevention, chargeback management,

tell the difference between a legitimate person attempting to open

and payment gateway solutions to merchants’ customers

an account and a bot, which is critical.

spanning diverse industries worldwide.

Solution: an end-to-end risk platform to thwart

www.inauth.com

account opening fraud

www.accertify.com

Accertify and InAuth are wholly owned subsidiaries of American
Express and have been working with the largest brands in the world
delivering fraud detection, with minimal customer insult so banks

Click here for the company profile

and merchants can prevent fraud while growing their business.
By coupling InAuth’s device intelligence with Accertify’s risk
engine, behavioural analytics and machine learning, businesses
have unparalleled insights to thousands of device and trans
action attributes – across all channels – to assess the riskiness

By looking beyond the user-entered information and examining

of an application and make a truly informed decision. InAuth per

anonymised site navigation data, customers are able to quickly

forms critical checks that could indicate that a fraudster may be

identify and stop complex fraud attacks such as identity theft,

working behind the scenes and helps validate whether additional

bot traffic, and automated attacks that might be missed by other

review is necessary in the account opening process, such as bot

solutions. These behavioural analytics tools look at the speed

and malware detection, along with the ability to use negative lists

and manner in which customers interact with websites when

for devices associated to fraud. InAuth allows clients to associate

they complete their applications and establish usage patterns of

device elements with anonymised user data across multiple

legitimate customers vs fraudsters.

industries, providing a holistic view of the trustworthiness of a
device, so that they can better assess the riskiness of a trans

Accertify’s solutions collect, store, and aggregate large volumes of

action and take additional steps to mitigate potential fraud.

data in real time. Creating views around a customer, a product, an

In situations such as new account opening, any risk intelligence

event, or any number of data points can increase fraud detection

of the device itself becomes critically important in order to make

accuracy and reduce false positives. There is no shortage of fraud

more confident transaction decisions. InAuth provides critical

prevention solutions on the market but it is important to partner

context, allowing businesses to expand their real-time defence

with those proven to deliver results. InAuth and Accertify work

network and provide another layer of transparent authentication

with the largest global banks, merchants, and airlines and help

that can be seamlessly incorporated into the account opening

turn large volumes of disparate data into actionable intelligence

process. Accertify’s portfolio of fraud management solutions

to help thwart online account opening fraud while protecting the

brings additional levels of control to identify and prevent account

user experience.

takeovers and new account originations schemes.

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WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

Nordea
The fraud management team of Nordea reveals key insights into the cybercrime trends and fraud management solution at both
local and global level.

What are the current cybercrime trends in the retail and

Could you please share with our readers some

corporate banking sector, particularly in the Nordic

recommendations on strengthening the fraud pre

countries?

vention management?

We have divided cybercrime trends into local and global threats.

One of the important things to do, as an organisation, is to iden

If we are looking at the global threats, which are likely to rise in

tify the risk group within. It’s not always about the money, the

the coming year, we see investment scams, CEO fraud, Business

information, or the different knowledge that only the company has;

Email Compromise (BEC) fraud, phishing, smishing, and vishing.

the projects or any other type or valuable resources that can be

Notably, vishing is prevalent in Sweden and it is likely to come

stolen and commercialised by fraudsters are also things worth

to Norway and other Nordic countries. At the local level, the

considering. It is also important to know what information is shared

common threats identified are friendly fraud, identity theft, card

between the company, the staff, and the public. In addition, one has

scams, and again phishing. Nevertheless, the employees are

to always make sure that the employees are aware of the risks,

usually the weak link, as in most cases the threat comes from

and they should always be updated about potential attacks.

the inside. Why? Because the staff within the organisation is

Therefore, educating people on a constant basis is a way of

not well trained to recognise a cyber-attack, or sometimes they

reducing risks. One should constantly monitor the way emails

commit fraud on purpose. Due to the developed economy and

are used (for instance, how the flags in the email function are

prosperous businesses, Nordic countries are highly digital, and

used), the money transfers, and other types of transactions.

this makes them a good target for cybercriminals.

How does the anatomy of cyber-attacks look like?
There are two types of cyber-attacks; however, it is often some
kind of combination of the two: those where the fraudsters
manipulate people’s minds and those where the fraudsters
manipulate people’s devices (or hack/misuse email box,
inlogging, etc). The first type is essentially the social engineering
fraud and it is usually exercised over an organisation’s staff.
Cybercriminals hack emails, but most of the time, at least for CEO

By any means, the most
successful frauds are those
resulted from a combination
of social engineering and
technical elements.

fraud, the manipulation of the employees is a common practice.
The attacks that go through social engineering are investment
scams, BEC fraud, love scams, phishing, smishing, vishing,

When it comes to transactions, we recommend the four eyes

friendly fraud, and identity theft, but they can also include bits of

principle: two people to verify when the company made a

technical fraud.

payment and to make sure fraudsters don’t manipulate the bills
or the emails. In addition, it’s always crucial to make sure the

The technical advanced fraud is when fraudsters have the skills

utilised technology is up to date. And there is also the password

and knowledge of producing technical bits in order to attack, so

culture: obviously, people should understand they shouldn’t

then they use malwares, different types of Trojans and viruses in

share passwords under any circumstances, and they should

order to get into the computers of the customers. By any means,

know how to build a strong password. Moreover, companies

the most successful frauds are those resulted from a combination

should adapt a correct password culture for their staff. ➔

of social engineering and technical elements.

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About Nordea: Nordea is the largest bank by size in the
Nordic region and the only bank that has a truly Nordic
identity at its heart and culture. With key operations
in every Nordic country, Nordea has been playing a
fundamental part in establishing the shared economy
in the region and in fostering a borderless trading area.
www.nordea.com

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WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

Online Authentication - The Journey from
Passwords and Secret Questions to Zero
Factor Authentication

An Introduction to Online Authentication
and Stronger Authentication
Mirela Ciobanu | Senior Editor | The Paypers
Traditionally, identity verification was based on human interactions and presenting physical documents, mainly issued
by governments. Still, as digital channels are becoming the go-to places where consumers interact with businesses and
each other, we cannot rely anymore only on those processes.
As a result, businesses have become incredibly dependent on technology to verify and authenticate identities in order to
give (new) customer access to a network of systems to manage, store, and transmit information such as financial accounts,
personally identifiable information, intellectual property, transaction records, etc. Within this web, identity verification, iden
tity validation and identity authentication verification have turned out to be central to the ability of these businesses to effec
tively secure access to consumer-facing digital channels and the systems that underpin their operations.
However, identity verification, identity validation and identity authentication represent three different types of checks/
digital transactions. As Trulioo mentions in a blog post, we need to build the necessary online framework of trust that can
confirm that the person actually exists, by checking the validity of the identity data they provide and verifying that data.
The differences between the three cases mentioned above causes confusion as each involves different information and
has different legal ramifications and requirements. While authentication is demonstrating ownership and control of a unique
feature connected to an identity over time, identity verification and validation check if the information represents real data
and aim to prove that the specified identity attributes are actually connected to a person, entity, or thing that they are
intended to represent.

Strong Customer Authentication
In this chapter, we will be focusing more on explaining authentication and addressing strong customer authentication.
This regulation will apply to online payments within the European Economic Area (EEA) where the cardholder’s bank
and the business’s payment provider are both in the EEA. However, some businesses outside of Europe may also be

impacted depending on how European issuers implement the new authentication rules.
The SCA requirement is applicable to all electronic payment transactions that do not benefit from an exemption and is
based on an authentication using two or more elements. The elements are categorised as knowledge (something that
only the user knows, e.g., a password, answers to personal questions, PIN), possession (e.g., something that only the
user possesses, e.g. a debit card or mobile device), and inherence (something that user is, e.g., fingerprints). The elements
used must be independent from each other, and the two elements used for an authentication must belong to different
categories. ➔

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WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

An Introduction to Online Authentication
and Stronger Authentication
Nevertheless, for certain transactions, the regulation also introduces exemptions to the SCA requirement. In brief,
the RTS exempts contactless payments at point of sale under EUR 50, low value (online) transactions under EUR 30,
transactions with trusted, pre-defined beneficiaries, subsequent recurring transactions, and low risk remote transactions
subject to certain conditions. According to Irena Dajkovic, a partner of DALIR law firm, other exemptions with more
limited application scope include those relating to transactions initiated by a legal entity (not consumer) through the
use of dedicated payment processes or protocols and subject to regulator’s approval, as well as those relating to access
to certain information (balance and/or payment transactions executed).
Transactions that do not meet these new authentication requirements or qualify for any exemption may be declined starting
September 14, 2019. However, according to some PSPs, 3-D Secure 2, the new version of 3-D Secure rolling out in 2019,
has the potential to become the primary authentication method used to meet SCA requirements for card payments.

Why do we need strong authentication?
- To counterbalance the effects of multiple data breaches and protect customers against malicious actors – For instance,
in 2016, a third of US businesses have had customer information breached — including the information businesses
rely on to authenticate their customers. The mass compromise of passwords has led to an increased risk of fraud on
consumer accounts and network-level attacks from credential-stuffing botnet attacks.
- To minimise false positives (benefits for businesses: increase revenue by avoiding pushing good customers away) –
As accuracy and customer loyalty are crucial for businesses, to win customer’s support, authentication solutions must
prove their effectiveness in both keeping bad actors out and ensuring a positive security perception for good ones.
- Because we have the technology - Mobile devices are a clear driver of traditional strong authentication. These devices
have increased the opportunity for businesses to leverage more than just passwords to authenticate their customers
and employees by facilitating both possession-based authentication (e.g., device fingerprinting, SMS-based one-time
passwords (OTP), etc.) and inherence-based authentication (e.g., fingerprint scanning, voice recognition, etc.).

Strategies to bolster authentication
Cyber-criminals can be incredibly creative and determined when it comes to gaining access to consumer’s accounts
or enterprise’s data. To fight these actors, a number of tactics and strategies to bolster authentication have been
developed/presented by the private industry and public sector, including:
- Risk-based authentication – implementing authentication based on the degree of risk. Input data is analysed to deter
mine which type of authentication is best to leverage following a determined degree of risk in a given transaction or
interaction.
- Continuous authentication – a variation of risk-based authentication. In this case, user’s actions through and across
sessions are taken into account when deciding the degree of access he/she has, or whether certain types of authenti
cation are needed.
- Out-of-band authentication – uses a communication mechanism that is not directly associated with the device being
used to access the banking application or ecommerce site in order to facilitate a second mode of communication. Thus, it
can mitigate the risk that exists when the initiating channel is compromised or simply too insecure for the level of risk in
the transaction. ➔

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WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

An Introduction to Online Authentication
and Stronger Authentication
According to Simility, a complex authentication process looks at various types of data, such as login, historical, crosschannel, behaviour, device, geolocation, etc. to effectively and seamlessly decision the end user. Users are automatically
accepted, rejected, or required to step-up, such as in the case of high-risk transactions.
Also, the ability to tailor the authentication experience to the consumer’s comfort zone is important since this increases
the potential that the transaction will be completed, rather than abandoned.

Technology to the rescue
Financial services, banks, and merchants have different demands when it comes to users’ authentication, and some
factors and solutions are more vulnerable than others. Take for instance a password, PIN, and passcode which are vulne
rable to interception or theft and replayed, or guessed versus facial recognition which is vulnerable to theft and emulation.
Facing the demands of the market and regulators, and at the same time seeking to repel attackers, those responsible
for choosing and implementing customer authentication face a herculean task. However, technologies such as
machine learning and AI and, of course, biometrics can help businesses fight the bad guys.
AI can evaluate a certain transaction, such as a log-in event, a shopping transaction, or a new-product application, by
using its unique contextual and transaction data, and come up with a fine-grain decision about its implied or inherent risk.
But, to be effective across geographies, analytics need a good consortium dataset and large pools of globally diverse risk
and fraud data to draw on.
But there’s a common misconception that this data invades privacy, which is not always the case. Vendors such as CA
Technologies anonymise all the data they use for predictive modelling to ensure that consumer privacy is protected. It is
the patterns of use over time that are important, and the profiles that accumulate these patterns cannot be tied back to
an individual.
Another praised technology, successfully implemented by banks and other financial services companies to keep their
customers safe, is biometrics. Their ability to perform without dependency on the user remembering or sharing a
password greatly enhances customer security while improving the user’s authentication experience. This technology
includes device fingerprinting, behaviometrics, fingerprint scanning, eye scanning, facial recognition, and voice
recognition; however, we will focus more on behaviour biometrics. ➔

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WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

An Introduction to Online Authentication
and Stronger Authentication
Behavioural biometrics, sometimes known as passive biometrics, analyses how the user interacts with a device or
session. There are some 2,000 parameters that behavioural biometrics depends on and they give a clear indication of
someone’s unique identity. These range from monitoring human motion gestures and patterns to keystroke dynamics
and factors – such as speed, flow, touch, sensitive pressure, and even signature formats. Behavioral pattern detection
technologies identify fraud by monitoring the user session to detect suspicious activities or patterns.
These anomalies manifest in a couple of ways:
- Transactional: The user is performing transactions that are out-of-pattern compared with normal behavior.
- Navigational: The manner in which the user is navigating the website is inconsistent with his or her usual pattern, is
inconsistent with the pattern of his or her peer group, or is indicative of the navigational pattern of a bot.
Even though biometrics represent a desirable alternative to passwords, a simple replacement of passwords with
stand-alone biometrics is generally not recommended. Such implementations would be comparably vulnerable to
compromises under realistic threat models. Integrated solutions such as multi-factor and multi-layer should be adopted
as acknowledged by 67% of industry professionals in a Mastercard and the Department of Computer Science at the

University of Oxford survey) . Multi-factor approaches require users to respond to two or more explicit authentication
challenges (e.g., multi-modal biometrics). Multi-layer approaches combine a single explicit factor with other data element
that are typically invisible to users (e.g., device fingerprinting, geofencing, risk scoring).
Going further, when processing higher risk transactions, a number of biometrics can be combined in a step-up
process called multimodal biometrics. This happens in order to prove someone’s identity, known as Strong Customer
Authentication. Even more, if the customer uses their fingerprint, face, or PIN code to unlock their device, banks can
now pair that same user verification method with strong cryptographic protocols made available through on-device
platform APIs, to allow customers to securely access their accounts online in full compliance with PSD2 strong customer
authentication requirements, on both apps and websites.
Still, no single method of authentication will always be suited for every situation. Companies are advised to adopt
approaches that use multifactor authentication, while also taking into account location, behaviour analytics, and numerous
other indicators of identity.

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WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

ThreatMetrix
Reimagining Identity in the Post-Data Breach Era

About Alisdair Faulkner : Alisdair Faulkner leads the commercial markets and strategy function for fraud
and identity management at LexisNexis Risk Solutions, Business Services. He was co-founder and
Chief Products Officer for ThreatMetrix culminating in the 2018 acquisition by LexisNexis Risk Solutions.
He now oversees the combined fraud and identity solutions for LexisNexis Risk Solutions and the
ThreatMetrix Digital Identity Network.

Alisdair Faulkner | Chief Identity Officer | LexisNexis Risk Solutions

Data breaches have become commonplace among global

The intrinsic link between stolen identity data and attacks is

headlines and newsfeeds, a painful fact of life until you become a

clearly evident through analysis of the ThreatMetrix Identity

victim yourself, and realise the wholescale devastation breached

Abuse Index. With the largest spikes in the index associated with

identity data can reap on your day-to-day life. The onus is squarely

the biggest breaches reported in the news, the Index is a clear

on businesses to ensure they have the appropriate defences in

indicator of how the exploitation of stolen identity information

place to protect their customers, as well as safeguard their own

is impacting the size and scale of global attacks. These volatile

reputation.

attacks are deployed to give cybercriminals access to everything
they need in order to turn a profit with stolen credentials. Whether

However, keeping personal data safe has become increasingly

it be opening fraudulent new accounts, taking over existing

challenging for businesses, who must contend with the evolving

ones, applying for fraudulent loans, making illegal payments or

demands of the digital economy amid ever more savvy, global

going on illicit shopping sprees, fraudsters are not only making

cybercriminals. Businesses are tasked with having to stay one

a monetary impact on the businesses they target, but also

step ahead of the fraudster, no easy task when cybercriminals are

threatening brand, reputation, and customer loyalty. Perhaps the

launching increasingly sophisticated and organised attacks, using

clearest indicator of the impact of breached identity data is the fact

near-perfect identities created from piecing together breached

that around one in ten new account creations in the ThreatMetrix

credentials so readily available on the Dark Web.

Network is fraudulent, and for some industries this figure can be
even higher. ➔

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WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

Thus, identity has become central when talking about success in
the digital economy. In a post-data breach era, businesses must
strive to re-establish trust online and gain insight into the true
identity of customers.
However, with consumers moving seamlessly between their off
line and online personas, across both their corporate and per

About ThreatMetrix: ThreatMetrix, A LexisNexis Risk

sonal lives, businesses are faced with a myriad of challenges in

Solutions Company, empowers the global economy to

ascertaining the true identity of transacting users. Muddying the

grow profitably and securely without compromise. With

waters further is the fact that individuals can behave differently

deep insight into hundreds of millions of anonymized

and show different offline personas depending on the circum

digital identities, ThreatMetrix ID delivers the intelligence

stances, for example, subscribing for media services online versus

behind 110 million daily authentication and trust deci

applying for a business loan.

sions, to differentiate legitimate customers from fraud
sters in real time.

Traditional fraud and identity management is failing to keep pace
with this evolving fraud landscape – siloed and disjointed techno

www.threatmetrix.com

logies built to defend against various threat vectors introduce
unnecessary friction for the user, at excessive cost to the enter
prise. Different ways of assessing users at different customer touch

Click here for the company profile

points often means asking customers to jump through multiple
hoops to prove who they are – again adding friction to the overall
user experience.
3. A nalyse Fraud Risk: Advanced linking technologies and
Businesses can meet these competing priorities – protecting

machine learning can then correlate these disparate data

against fraud while providing a frictionless user experience – by

points and turn this into actionable intelligence on risk through

having a complete 360-degree understanding of who they are

fraud scores and reason codes; determining velocities and

transacting with – anywhere, anytime, and via any channel.

frequencies that are indicative of trusted versus suspicious
behaviour.

But how can this be achieved? The secret to success is linking

4. Step-Up Authentication: For activity that shows elevated risk

the multi-faceted parts of an individual’s true identity in a way that

analysis the final step is deploying step-up authentication, for

is actionable across multiple channels. The ability to join the dots

example knowledge-based authentication, secure notifications,

between a person’s offline and online identity requires access to

or biometrics. Strong customer authentication that integrates

the most comprehensive sets of data and sophisticated techno

seamlessly with risk-based authentication, based on identity

logy to create and analyse linkages to form actionable intelligence

assessments, is key to delivering maximum security with

that can be used in real time.

minimal customer intervention.

1. Digital Assessment: To gain a truly 360-degree view of identity,
businesses should incorporate identity attributes seen during

The combined understanding of physical and digital identity

digital touchpoints such as username and passwords, email

interactions allows businesses to respond quickly and more

addresses, online account history and behaviours, social

comprehensively to the vast number of threats facing the global

networks, device identification, and geo-location.

economy. Solving the problem of identity in the digital age will

2. Identity Verification: Involves linking attributes of an individual’s

enable a seamless and comprehensive approach to fraud and

digital identity to authoritative data sources from a person’s

identity risk management to help companies drive online revenues

offline records. This includes identity verification based on utility

by making faster decisions, reducing online fraud and combating

bills, car registrations, and government-issued identifiers such

emerging threats.

as social security numbers.

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WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

RSA
Adaptive Authentication: Balance Opportunity and Risk in an Omnichannel World

About Mathew Long: Mathew Long is a Sr. Advisor for the RSA Fraud and Risk Intelligence division.
Mathew leads the global go-to-market efforts for RSA’s consumer authentication and fraud intelligence
solutions. Mathew is a prolific blogger and a regular presenter at industry events and media engagements.
For the past six years, he has focused on working with leading financial institutions on anti-fraud and
cybercrime prevention strategies to reduce fraud and improve customer experience.

Mathew Long | Senior Advisor, Fraud & Risk Intelligence | RSA

The age of digital transformation has arrived, revolutionising the

API economy and Open Banking

financial services industry with new ways of doing business any

The API economy offers customers the option of convenience

time, anywhere. With a growing array of digital banking channels

such as being able to link their accounts with other services

available, customers seemingly have infinite possibilities for

(utility payments, for example) without the FI having to build out a

conducting financial business. At the same time, this expansion of

complex technology infrastructure to support the new capability.

banking channels increases the risk of fraud.

In some cases, this may be more than an opportunity; it may be
an obligation. For example, the European Union’s (EU’s) Payment

Winning in the digital era means rising to the challenge of mee

Services Directive II (PSD2) requires banks doing business in the

ting an entirely new set of customer expectations. As Hari

EU to open access to their systems to payment services and data

Gopalkrishnan, CIO of Client Facing Platforms at Bank of America

aggregators.

put it, ‘Our customers don’t benchmark us against banks. They
benchmark us against Uber and Amazon.’ To succeed, FIs must

3-D Secure 2.0

manage digital risk so that it doesn’t stand in the way of digital

Card issuers and issuing processors have started or are planning

opportunity. In the middle of the fulcrum sits customer experience.

to embark on the journey of adopting EMV 3-D Secure (AKA 3-D
Secure 2.0). The opportunity for 3-D Secure 2.0 lies in its adoption

Top five areas for digital opportunity

of consumer-friendly features such as the elimination of enrolment

There are five key areas of digital opportunity for the financial ser

pop-ups, full integration into the shopping experience, and faster

vices industry, as follows:

authentication. By reducing the annoyance factor, these changes
have the potential to lead to more approved transactions and

Fintech

more revenue.

Fintech is transforming the industry. Digital wallets, cryptocurrency,
blockchain, and other Fintech offerings are redefining banking and

Mobile banking

financial services in a multitude of ways, putting traditional FIs at

Mobile banking has become a staple of consumer offerings.

risk of losing business to them. Increasingly, traditional banks are

In fact, the mobile channel has become the predominant and

rapidly innovating to provide more of the kinds of digital services

preferred channel for consumers. ➔

their Fintech competitors offer.

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WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

According to RSA’s Quarterly Fraud Report, in the last three years,
transactions from mobile apps have increased over 200%, and
the overall volume of activity in the channel now outpaces that
of the web with 55% of all transactions conducted from a mobile
app or mobile browser. As a result, FIs are expanding their mobile
channel to provide new services to their customers while meeting
their demands for secure, convenient account access.

About RSA: RSA, a Dell Technologies business,
offers business-driven security solutions that uniquely

Internet of Things (IoT)

link business context with security incidents to help

While banking does not lead the list of today’s top IoT applica

organisations manage digital risk and protect what

tions, the prospects for IoT-based financial transactions look

matters most. RSA’s award-winning cybersecurity

good nevertheless – particularly in the payments segment. IoT

solutions are designed to effectively detect and

is an emerging area, deemed the next evolution in banking and

respond to advanced attacks; manage user identities

shopping convenience. The concept of ‘human-not-present’

and access; and reduce business risk, fraud, and

transactions where IoT devices interact directly with payment

cybercrime. RSA protects millions of users around the

systems is not far off and it will enable more personalised services,

world and helps more than 90% of the Fortune 500

facilitate usage-based fees, and much more.

companies thrive in an uncertain, high-risk world.

Stop fraud, not customers

www.rsa.com

As the array of digital channels grows, so does the need for
security technology that can detect and prevent fraud in ways that
are frictionless for customers. Adaptive authentication solutions
leverage machine learning models to assess fraud risk based on
contextual information such as device identification, IP address,
user behaviour, and fraud intelligence (eg mule accounts). Its
nonintrusive nature, flexibility, and ability to manage fraud risk
across multiple channels makes adaptive authentication an ideal

But today’s banking channels are also likely to include online

solution for FIs looking to deploy strong security to large customer

banking, chat support, mobile banking, call centre, IVR, and third-

populations.

party services, with more channels, such as IoT devices, on the
way. In this environment, siloed operations are both ineffective

Adaptive authentication technology can achieve fraud detection

and unsustainable.

rates of 95% with minimal customer intervention and it allows for
integration with numerous step-up authentication methods in the

Adaptive authentication allows operations to be carried out as a

event of a high-risk scenario, including out of band SMS or email,

whole rather than an array of discrete parts. This eliminates the

biometrics, transaction signing, and more.

need to build and maintain a separate infrastructure (including
separate point solutions for fraud detection and prevention) for

With so many channels for customers to interact, omnichannel

every channel. Instead, all channels – both online and offline –

fraud detection has become a hallmark of adaptive authentication.

can share knowledge and awareness of a customer’s interactions

Back when ‘multiple channels’ at most meant a branch bank and

and lead to streamlined operations, a more secure banking

an ATM network, this wasn’t so much an issue.

environment, and a smoother customer experience.

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WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

HID Global
The Paypers interviewed Olivier Thirion de Briel, Global Solution Marketing Director at HID Global, about what role authenti
cation plays within the Open Banking ecosystem. Following are takeaways from our discussion.

About Olivier Thirion de Briel: Olivier Thirion de Briel is Global Solution Marketing Director for the banking
sector at HID Global. In this role, Olivier leads the banking strategy and product marketing for the IAM
solutions business unit. Prior to joining HID Global, Olivier led the cloud strong authentication offering at
OneSpan (former Vasco) and the Oberthur Technology’s strong authentication product line. Olivier holds
an MBA from INSEAD, as well as an MSc in computer and electronic science.

Olivier Thirion de Briel | Global Solution Marketing Director | HID Global

Rules have now come into effect, requiring banks

TPP is known, trusted, and has strong enough security policies

to share their customers’ financial information with

in place to safeguard all shared data.

other authorised providers using open Application
Programming Interfaces (APIs). However, this

Strong customer authentication is especially important and must

makes banks dependent on the security of the Third

be the central element in the Open Banking API ecosystem. It must

Party Providers (TPPs) using these APIs. What are

be a priority both for banks, which already understand that sen

the possible risks of this new Open Banking era?

sitive data requires high security and protection, as well as for

Under the Open Banking initiative, institutions must open their

TPPs, which are only at the beginning of their learning curve.

APIs to give TPPs access to their customer data. In other
words, if a bank’s customers want to use one of these TPPs,

As financial fraud incidents
grow in digital banking channels
it is imperative that institutions
protect their customers.

the bank must give the TPP access to its stored data about
them and allow the TPP to serve these customers via the open
communication interface.
Open Banking benefits financial institutions by enabling them to
build new business models around a variety of innovative and
more personalised customer services. But it also exposes a
bank’s customers to a greater risk of fraud since their financial

What security measures should banks adopt to

data must now be shared with multiple TPPs. The problem is not

address these threats and challenges?

so much that the data is being shared through Open APIs, but

Banks have come to realise that they will be the central point

that it might be shared without properly authenticating both the

of authentication in this growing financial ecosystem. When data

TPP and user.

must be shared with a TPP, the bank is in the best position to
deliver a seamless authentication experience that does not com

In this context, I would like to emphasise two points that will play

promise security. Customers will not tolerate an authentication

a critical role in the future. First, banks must prevent data loss,

experience that meets security requirements at the expense

identity theft and non-compliance with data protection regu

of convenience. They have come to expect easy, on-the-go

lations by using identity verification and fraud prevention solut

online access and mobile transactions and will not accept time-

ions that ensure personal data is shared only with the consent of

consuming processes in this emerging Open Banking ecosystem.

its genuine owner. Second, banks will need to ensure that each

➔

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WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

Different authentication models have their own
characteristics and security implications. Can you
please describe the ideal authentication process?
In this new digital era, the authentication process must be
based on an adaptive security approach in which the level of
complexity depends on the risk associated with the transaction.
This risk level is established based on multiple parameters

About HID Global: HID Global is the leading provider

including malware detection, geolocation, IP address, and how

of trusted identity and access solutions for people,

the customer is using a mouse or keyboard or displaying other

places and things. We enable organizations and

behaviours. Some solutions can evaluate a transaction’s risk

enterprises in a variety of industries such as banking,

level based on characteristics of the user device and its browser

healthcare, and government to protect digital identities

and other attributes.

in a connected world and assess cyber-risk in realtime to deliver trusted transactions while empowering

If the risk level based on these parameters is defined as low,

smart decision-making. Our extensive portfolio offers

authentication may only require a username and password. If it is

secure, convenient access to on-line services and

defined as high because the transaction is being conducted with

applications and helps organizations to meet growing

an unknown beneficiary at an unusual place and time, additional

regulatory requirements while going beyond just simple

authentication methods may be required to prove the user is

compliance.

who he or she claims to be.

www.hidglobal.com
It is also important to understand that growing use of connected
devices has expanded the attack surface for financial fraud
sters. Risk-based advanced authentication will need to take into

Click here for the company profile

account the entire environment in which customers are trans
acting to provide the necessary protection.

Since PSD2 allows third party providers to access
customers’ payment account data, in what way

As these technologies are brought to the Open Banking API

is this directive aligned with GDPR? How will

ecosystem, we will also see financial transactions based on

discussions about data analytics evolve over the

connected devices. Within this ecosystem, the use of static multi-

next 5 years?

factor authentication methods will decrease and we will see

Open banking is about sharing data and making it available to

a migration to continuous data analysis that improves risk-miti

TPPs. GDPR, on the other hand, aims to ensure that nobody can

gation decision-making and creates a more secure transaction

steal personal data. In fact, the goals of GDPR, Open Banking

environment.

and PSD2 are all aligned around giving data ownership back to
users. This is where security plays a key role, and GDPR brings
an additional layer of requirements for securing sensitive data.
Machine learning and AI will enable banks to collect and analyse
data so they can make smarter real-time decisions about the
next action to take when a threat is detected, including whether
to approve, block or reject a transaction. Adaptive authentication
processes will enable them to define security levels based on
existing risk.

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WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

Arvato Financial Solutions
Seamless and Secure Online Authentication: A Solvable Goal?

About Robert Holm: Robert Holm is Senior Vice President Fraud Management at Arvato Financial
Solutions. With an experience of almost 20 years in setting up and growing new businesses, he leads
the strategic development and internationalisation of the fraud management division.

Robert Holm | Senior Vice President Fraud Management | Arvato Financial Solutions

Online authentication is an intelligent tool that allows companies

As unique as a fingerprint

to differentiate legitimate activity from fraudulent behaviour to

The way we subconsciously behave on our phones or computers

make sure only the right users get through. However, as intelligent

– how we hold, scroll, swipe, click, tap, or type – is as unique as

as it may be, there does still remain a challenge in making sure the

our fingerprints.

wrong users with the right credentials don’t cheat their way past
this barrier. This means that no company can ever really be 100%

By using sensors in touchscreens or codes on websites, data can

sure about the true identity behind an online user.

be collected invisibly to the user. Multiple interactive gestures can
be constantly analysed — including how the person is holding

Approximately 98% of human transactions are legitimate, meaning

the device or the speed and rhythm in which they’re using their

only 2% are fraudulent. With such favourable odds, one would

mouse. Endless amounts of these data points together form a

think it was a given that businesses shouldn’t be quick to treat

digital fingerprint and can be used to establish a user’s identity.

all customers as potential fraudsters. But some do. And in doing
so, instead of protecting their business, they end up pushing loyal
customers away. We could conclude that overly strict defence
mechanisms won’t let all legitimate customers through. On the
other hand, interruptive authentication methods cause transaction
abandonment and loss of customers.
Fraudsters continue to find ways to overcome traditional authen
tication methods, as we have grown accustomed from them to

Until passive behavioural
biometrics, online fraudsters
had a method for overcoming
the security of traditional
authentication methods.

do so. Static defence mechanisms do not prevent all cases of
fraud: login data is being bought on the dark web, CAPTCHA
is being outsmarted by bots, true geolocation is being hidden

With the aid of these behavioural biometrics, companies will not

via proxy servers, device fingerprinting is being imitated by

only be able to accurately differentiate between legitimate custo

emulators, and multi-factor authentication is being surpassed

mers, fraudsters and non-human behaviour (eg BOTS, malware, or

when session takeover occurs. That’s why the industry has been

Random Access Trojans), but they will also save costs with fewer

forced to think beyond passwords and secret questions, and

suspicious cases to check manually. ➔

research advanced authentication methods.

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WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

And it can do more than reducing fraud threats and financial
losses. Companies are also able to minimise false positives and
increase revenue by avoiding pushing good customers away.
Additionally, leveraging the user’s behavioural biometric data
means businesses receive additional valuable insights about their
customers. This allows for further optimisation of the customer
journey and user experience – improving customer loyalty and

About Arvato Financial Solutions: Arvato Financial

encouraging higher conversion. In fact, Gartner states that by

Solutions provides professional financial services

2022 digital businesses with a great customer experience during

centred on cash flow in all segments of the customer

identity corroboration will earn 20% more revenue.

lifecycle: from identity, fraud, and credit risk
management, to payment and financing services and

The great advantage of this new authentication method is that

debt collection. Our team made up of proven and

even if fraudsters try to use stolen passwords and other personal

reliable experts in around 20 countries gives businesses

information, behavioural biometric monitored accounts can still

the best possible platform for growth.

be secured, as this type of information can’t be stolen, faked, or

www.finance.arvato.com

copied.

Behavioural biometrics differentiators
In contrast to other protection methods, such as active physical

Click here for the company profile

biometrics, there are many positives when it comes to passive
behavioural biometrics:
● It does not depend on special scanning hardware and is inde
pendent from devices or locations.

As diverse protection methods are needed to cover a wide
range of fraud cases, Arvato Financial Solutions offers a broad

● Authentication is not one-time validation, but a continuous pro

solution portfolio for different types of threats. Based on our

cess from check-in to check-out – protecting transactions inclu

long-standing industry and market-specific experience, the fraud

ding registrations, purchases, payments, and money transfers.

and financial experts working in our teams offer a customised

● No extra user actions are required. It is frictionless and seamless

approach to each of our clients to provide the optimal solution

and not aggressive or irritating, like most security barriers.

for their particular needs.

● No personal data is collected or stored, complying with the
European Union’s General Data Protection Regulation.

Based on each company’s individual goals, the industry land
scape, the fraud prevention methods in place, and the fraud

Securing companies, protecting customers

management architecture, we determine which specific solution

The behavioural biometric data is compared to the historical

or module combination is the best match for each business.

behaviour of the user and average behaviour patterns. Based
on analysed signals of each user profile, the system generates

Arvato Financial Solutions is the backbone for growth, providing

a ‘trust score’ with proprietary machine-learning algorithms.

a holistic approach to help companies optimise their processes

Assuming that the average person’s phone habits will change,

and customer experience, and protect their revenue and repu

say, on a Saturday night compared to a Wednesday morning,

tation while providing protection against fraud tailored to specific

the behavioural biometrics software then calculates whether

needs.

someone is really who they are claiming to be.

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WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

TrustStamp
Account Takeover and Step Up Authentication

About Andrew Gowasack: Andrew is Cofounder and Managing Director of Trust Stamp. As a co-leader
in Emergent’s global identity initiatives, Andrew is engaged with the delivery of identity-related services
across all of Emergent’s verticals, but his primary focus is building strategic partnerships around the
World.

Andrew Gowasack | Cofounder and Managing Director | TrustStamp

True customer satisfaction means optimizing expe

These legacy methods have been further compromised by the

riences and relationships from start to finish

numerous high-profile breaches of retailers, healthcare providers,

In the digital age, businesses face the constant challenge of deter

government records, credit bureaus, and hospitality chains,

mining legitimate customers from fraudsters. Fraudsters target

resulting in over 10 billion data records reported as being exposed

a variety of points along the transaction process, but some of

since 2013 (Gartner Market Guide for Online Fraud Detection

the most common are new account creation, transactions, and

Published 31 January 2018 - ID G00318445), and those are just

account recovery. Enterprises must walk a fine line to ensure that

the ones that we know about!

appropriate measures are taken to prevent fraud while also provi
ding a low-friction user experience. While the sophistication and

With so much personal information readily available, fraudsters

frequency with which fraudsters attack has increased drama

have become proficient at using the same data to commit multiple

tically, so have the tools businesses can use to combat them.

fraud attempts. Through the use of bots, fraudsters can submit
tens of thousands of applications in a single day, typically from a

One of the most prevalent forms of fraud is synthetic identity fraud,

remote country, and only need a handful to pass through in order

which results in direct losses of around USD 118 billion each

to profit.

year. This is a hard cost for many industries such as insurance,
healthcare, and banking who typically rely upon flawed legacy

While the direct cost of USD 118 billion seems a staggering

authentication methods such as increasingly complex passwords,

number, it is not the total cost. I had the opportunity to work

OTPs via text and email, and knowledge-based authentication

directly with the fraud and risk team of a large US S&P 500 Bank

(KBA).

who illustrated the extent of unseen opportunity costs. Thousands
of potential customer applications were being rejected due

However, as enterprises increase the complexity of the authenti

to authentication concerns. While these applicants may have

cation process, legitimate users are confounded by that com

been fraudulent, they may also have been qualified customers.

plexity leading to false positives and by users circumventing the

Moreover, the opportunity cost losses were not limited to new

intent of the systems (eg reusing passwords).

customers. ➔

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WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

A growing number of existing customers were locking themselves
out of their accounts because they could not answer their KBA
questions or they could not receive the OTP as they had changed
their cell phone number. The standard protocol for the bank was
to close these accounts.
These challenges are rampant on digital platforms. On average,
for each account that is erroneously closed and each genuine

About TrustStamp: A multi-factor biometric platform

applicant declined, there is an opportunity cost of USD 61 per

with inbuilt de-duplication that can be augmented

incident. To make matters worse, there is an additional unquan

with social media and other data mining and identity

tified loss of goodwill. Just like the direct cost of fraud, these

warranties. Among the platform’s unique factor is a

opportunity costs impact the companies’ bottom line.

shareable non-PII hash that tokenizes identity and
can embed both encrypted data and pivot points to

Because of their potential for security, as well as usability, a growing

external data.

number of enterprises are implementing biometrics ranging from
fingerprints to voice, to facial recognition. In addition to better

www.truststamp.ai

technology for collecting biometrics (eg improving smartphone
cameras), customers are becoming increasingly accustomed to

Click here for the company profile

using them. While biometrics’ usability may resolve many authen
tication barriers, not all of them provide the technology needed to
reduce the direct and opportunity costs of fraud.
By using only biometric solutions that test liveness, while securely
Biometric solutions that can resist replay attacks and prove

and compliantly storing biometric data, enterprises can compare

liveness partially resolve the issue of bot-initiated interactions. If a

the current biometric sample to all previous biometrics and spot

live biometric is required for applications, transaction approval, or

instances where two or more users share the same biometrics.

account recovery, and that biometric is compared not just to the

This deduplication process eliminates the possibility of the same

instant transaction but all prior biometrics from all transactions,

person making multiple applications under different identities.

then a fraudster needs a different live human for every transaction.
For many biometric solutions, a biometric sample is compared
to a source of assumed truth such as a national ID document or
passport, and if there is an apparent match, identity is established.
The problem is that fraudsters create sophisticated fake IDs, some
times using the same machines as legitimate issuing authorities,
or they obtain “real” IDs for stolen identities. While this is not as
scalable as blanked bot applications, it allows for repeated fraud
attempts and has a far higher probability of success.

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WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

CA Technologies
Reconciling Consent in PSD2 and GDPR
Ecommerce continues to grow at an astounding rate – and so does online fraud. According to Javelin Research, card-notpresent (CNP) fraud accounts for 81% of total fraud, representing billions of dollars in losses annually. To address this crisis,
the industry is taking a fresh look at transaction authentication.

About James Rendell: James Rendell heads Payment Security Strategy and Product Management for
CA Technologies. James is a recognised fraud and security expert, covering topics such as mobility,
cryptography, ecommerce, and network and infrastructure security.

James Rendell | Vice President, Payment Security Strategy | CA Technologies

Why has authentication become such a hot topic?

How is artificial intelligence changing the authenti

First, let’s compare Europe and North America because the

cation experience?

landscape and the drivers are a bit different. In Europe, PSD2 is

AI can evaluate any given transaction, using its unique contextual

making it a legal requirement to apply authentication to any type

and transaction data. Whether it’s a log-in event, a shopping

of remote electronic interaction that carries a risk of fraud. In North

transaction, or a new-product application, analytics can make

America, the focus is more on optimising the customer experience

a fine-grain decision about its implied or inherent risk. This is

by moving toward the frictionless checkout.

important for both driving out fraud and providing frictionless
experiences.

The card associations – Visa, Mastercard, and American Express –
are also introducing global rules to make the use of these authenti
cation programmes mandatory. Thus, ecommerce purchase
authentication is critical in both geographies.
With the PSD2 regulation and new rules from the card associa
tions, authentication has become the largest, brightest target on
the ecommerce radar. And it’s happening just as the 3-D Secure
authentication protocol is launching. So the timing of EMV 3DS is

With the PSD2 regulation
and new rules from the card
associations, authentication has
become the largest, brightest
target on the ecommerce radar.

spot-on.
Because we co-invented the 3-D Secure protocol, and we’re one of

For example, we’ve got hundreds of millions of identified devices

the few providers that have been running the platform for 20 years,

associated with billions of ecommerce payments globally. We know

we can help get you there in the most efficient way. And I should

if those past payments were high risk, confirmed as fraudulent, or

add that we were the first to authenticate a EMV 3DS transaction.

confirmed as good. So we can say “We recognise this one; we’ve
seen it before,” and associate the device with known good or
known bad behaviour. ➔

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WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

This intelligence, grounded in the ecommerce space, is a uniquely
powerful consortium dataset to have. In the end, virtually every online
crime, whether an account takeover, identity theft, or a malware
compromise, ends up in a fraudulent payment attempt somewhere
– often through the use of stolen user credentials such as online
banking or card details.

About

CA

Technologies:

CA

Technologies,

a

On top of this, competing across multiple digital channels is very

Broadcom company, is an industry leader in payment

important to our customers. By providing a central, omnichannel

and

platform for authentication of card and non-card ecommerce pay

transaction

ments, we make it possible to manage these risks and customer

artificial intelligence.

experience demands.

online fraud, CA delivers a unique 360º view of

identity

fraud

prevention,

authentication

with

powered

friction-free
by

patented

As a pioneer in analytics for

transactions for issuers, processors, and merchants,

What kinds of data do you need for risk analytics?
To be useful across geographies, analytics needs a really good

across all payment schemes. Learn more at ca.com/
balance.

consortium dataset. You need the largest possible pool of globally
diverse risk and fraud data to draw on. But there’s a common

www.ca.com

misconception that this data invades privacy, which is not the
case. All the data we use for predictive modelling is anonymised
to ensure that consumer privacy is protected. It is the patterns of

Click here for the company profile

use over time that are important, and the profiles that accumulate
these patterns cannot be tied back to an individual.
Predictive analytics is actually a well-established fraud prevention
discipline. It extended into the ecommerce 3-D Secure scene a
decade ago, which is when the focus on gathering data to support

You need this kind of expertise in knowing how to apply the techni

its development became our core business. We have the longest

ques of data science. It’s easy to make mistakes and misapply

established dataset in the ecommerce payment fraud field and we

them, and there are plenty of war stories where a model was being

believe we have the largest market share of issuers in this space.

biased the wrong way.

We service more than 13,000 card portfolios and well over a billion

In the end, the more data you have, the more powerful the offerings

transactions a year. Having a globally diverse, large consortium of

you can build based on predictive analytics. It’s about how you

data for the analytics to chew on, as it were, is really important.

leverage data to build the advanced machine learning needed to

Otherwise, you end up with predictive analytics that are trained

optimise user experience and drive out fraud – while protecting

out of very limited datasets, useful only for point problems.

consumer privacy at the same time.

How do you build an AI engine to fight fraud?
Certainly, the most important factor is that we employ a group of
world-class data scientists with, when you add it all up, hundreds
of years of experience in payment fraud.

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WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

Simility
Complex Fraud Threats Call for Adaptive Detection Tools

About Rahul Pangam : Rahul Pangam is the Co-Founder and CEO of Simility. He’s an industry veteran,
with impressive experience from Google, who is dedicated to empowering fraud fighters with the most
adaptable, scalable, and accurate fraud analytics platform.

Rahul Pangam | Co-Founder and CEO | Simility

The payments and commerce landscape has undergone signi

An increasingly complex regulatory environment that necessi

ficant changes in recent years. At a local level, commerce and

tates businesses to comply with PSD2 (Second Payment Services

banking moved to a digital-first, standard format. At a global

Directive), faster payments and open banking, adds a further

level, and specifically in developing markets, there has been a

burden to companies.

huge transition from “mum and dad” shops straight to online
commerce. People no longer need banks or shops; they need

Fraud management is no longer a linear decision, with multiple

banking and commerce services.

factors needing to be considered and weighed in real time,
which is something traditional tools are unable to accomplish.

However, as much as this offers new and exciting online opportu

As cyberattacks become ever more complex, sophisticated,

nities to businesses, unscrupulous individuals are also taking

and cross-channel, companies need a solution that can change

advantage of easy-to-access fraud tools and freshly breached

as business needs change, yet that can also protect against the

data, exploiting vulnerabilities and targeting weaknesses in the

evolving fraud landscape.

security infrastructure of unsuspecting organisations.

Managing risk in a “post-breach world”
Companies are now operating in an environment in which they
have to assume, even with the most sophisticated security solu
tions, that there are no cast-iron guarantees in a “post-breach
normal” world. Managing risk in this environment needs to be
handled in real time.
The most pressing challenge for companies is to balance cus
tomer experience effectively with security and regulatory issues.
Customers have become accustomed to frictionless digital

Balancing multiple priorities

experiences and want payments to be made immediately. At the

Strong, but frictionless authentication is the key to offering an

same time, cybercriminals are constantly evolving their attacks

elegant customer experience and minimising fraud, while also

and using increasingly sophisticated techniques.

staying in compliance. ➔

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WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

Although companies have attempted to improve security
through different authentication methods, such as knowledgebased authentication (KBA) and multi-factor authentication
(MFA), these methods are not without shortcomings. KBA lacks
security because it is dependent upon “shared secrets” between
users and servers, and MFA causes friction, which frustrates
the customer. Businesses need a solution that empowers them
to seamlessly balance multiple competing priorities without

About Simility: Simility offers real-time risk and fraud

increasing friction, operational costs, or false positives.

decisioning solutions to protect global businesses.
Simility’s offerings are underpinned by the Adaptive
Decisioning Platform built with a data-first approach
to deliver continuous risk assurance. By combining
artificial intelligence and big-data analytics, Simility
helps businesses orchestrate complex decisions to
reduce friction, improve trust, and solve complex fraud
problems.

Using data as a strategic advantage
As fraud continues to grow and cybercriminals become even more

www.simility.com

adept at circumventing security tools, it’s imperative to maintain
a seamless experience for legitimate users. Using various types
of data sources and applying concepts of machine learning for
greater visualisation and accurate insights to drive effective

Click here for the company profile

fraud management is critical. Companies that can turn data into
a strategic advantage will establish an edge over their compe
titors.
Built with a data-first approach in mind, Simility’s Adaptive
Decisioning Platform offers a holistic view of the end customer.
This helps companies orchestrate complex and accurate
decisions to reduce friction, detect fraud patterns, and assist
with regulatory requirements.
Simility’s complex authentication looks at various types of data,
such as login, history, cross-channel interaction, behaviour,
device, geolocation, etc to effectively and seamlessly decision
the end user. Users are automatically accepted, rejected, or
required to step-up, such as in the case of high-risk transactions.
With Simility, companies do not only have the processing power
to analyse huge datasets, but they can also customise user
interactions. By personalising services based on risk factors,
such as location, device and behaviour, trusted users can be
identified and treated as such and provided with a more seamless
experience, leading to increased customer satisfaction.

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WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

DataVisor
The Journey Towards Zero Factor Authentication

About Yinglian Xie: Yinglian is the CEO and Co-founder of DataVisor, a successful AI-based fraud
detection technology company. Before founding DataVisor, Yinglian worked at Microsoft Research for
more than seven years on numerous projects focused on advancing the security of online services with
big data analytics and machine learning. Yinglian completed both her PhD and post-doctoral work in
Computer Science at Carnegie Mellon University and holds over 20 patents.

Yinglian Xie | CEO and co-founder | DataVisor

From digital banking to online commerce, the consumption of

The emergence of n-factor authentication

online business services has changed consumer behaviour and

Several types of authentication factors can typically come into play

expectations. Gone are the days when people were willing to

in preventing fraud, which are often combined for comprehensive

stand in line to open a bank account or checkout at a retail store.

protection. They include password factors (from ATM PINs to

Nowadays, they expect millisecond response at online market

computer passwords), SMS factors (two-factor authentication

places. They want to use emerging payment types like digital

codes), knowledge factors (username and passwords), possession

wallets. Peer-to-peer payments are on the rise. As a result, in

factors (smart cards), and biometric factors (fingerprints or voice

today’s digital economy, a well-orchestrated customer experience

prints – or even optical scanning).

in digital channels is a competitive necessity, not a luxury.
Proving online identity used to mean combining two or more of
The reality of creating an optimal customer experience, however,

these factors, commonly referred to as “multi-factor authentica

can be challenging. The cost of fraud for the financial services

tion.” This approach has been proven effective in enterprises of

market has never been higher, owing largely to the proliferation

all sizes. In July 2018, Google reported that phishing attacks of its

of fraudulent online accounts. Competing objectives of revenue

employees almost stopped after the company began requiring the

growth and risk mitigation mean that while businesses in this

use of two-factor authentication security keys across its business.

market are working to ensure that they can detect fraudulent
accounts before they can wreak havoc, the added layers of

While multi-factor authentication increases the chances of detec

authentication add friction to the customer user experience.

ting a fraudulent account or even possible identity theft, it is extremely
cumbersome for users. In some cases, authentication happens

The Q2 2018 Fraud Index Report from my own company,

to be based on data purchased from third parties, which consu

DataVisor, showed a startling trend: as many as one in five cloud

mers consider to be private information – like mortgage payments.

user accounts may be fake. In fact, for some cloud services, more

Users typically balk at sharing so much personal information, and

than 75% of accounts may be used by hackers. More than 40%

see it as an invasion of their privacy.

of application fraud comes from coordinated attacks, with single
fraudsters operating multiple fraudulent accounts.

Moreover, multi-factor authentication does not even provide as
much robust security as one might assume. Take, for example, the

To combat this ever-growing rise in fraud, organisations are using

recent Facebook attack, where more than 30 million user accounts

multiple layers of authentication factors to verify the validity of a

were hacked. ➔

user’s identity.

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WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

Attackers manipulated access tokens to compromise normal user
credentials. This is not surprising, especially when tokens are used
to represent authenticated users and there is no re-authentication
for subsequent interactions. The systems assume that these
tokens are from real users.

The identity of the future

About DataVisor: DataVisor is the next-gen fraud

While technologists are busy inventing new methods to add

detection platform based on cutting-edge AI techno

another layer of authentication to identify users, at DataVisor, we

logy. Using proprietary unsupervised machine learning

are exploring the utopian vision of “zero factor authentication”.

algorithms, DataVisor helps restore trust in digital

This vision uses advanced technologies to build a digital DNA

commerce by protecting businesses against financial

that integrates online behaviours (across device, activities, and

and reputational damage caused by fake user accounts,

biometrics) to uniquely identify each customer. With artificial

account takeovers, and fraudulent transactions.

intelligence, the reality of “zero factor authentication” is closer
than we think.

www.datavisor.com

There are three critical elements to realising the vision of zero factor
authentication:

Click here for the company profile

(1) Robust data collection: a more fine-grained data collection
that forms the basis for deriving the digital DNA is imperative.
Today, organisations suffer from data loss as it trickles into
downs tream systems. They lose their integrity and in that
process lose valuable signals that could be used to build the
digital identity. To be effective, organisations have to look into
building and maintaining identities in real-time, using data

The next generation platform needs to rethink digital identity and

streams at their source versus in batch.

authentication in a transformative way. Advances in technology

(2) Constant analysis of data: this is an analysis in which users

must be able to combine machine and human intelligence to

are continuously “re-authenticated,” in passive mode, instead

deliver zero factor authentication and not n-factor authentication.

of using authentication at a given point in time.

Current authentication methods expose too many loopholes

(3) Transparency: when augmented with transparency and control,
users become part of the customer journey, have better control

– third-party apps, tokens, and APIs that can be leveraged by
attackers.

and influence over how their identity is being built and used, and
choose if they want to opt-in or opt out of zero factor authen

Adding more layers of authentication simply means that as an

tication. Many companies like Google are allowing users to

industry we have failed to build a path to building a better digital

control the data they want to share and how that information

identity. As AI becomes the driver for intellectual horsepower

gets used, thus users can choose their “own journey.” The goals

within the organisation, authentication means better security,

are to gradually establish confidence and trust in this new

greater trust, and personalised user journeys – all enabled by

authentication paradigm, and to demonstrate that it is equally

Zero-Authentication.

secure, or can, in fact, be more secure.

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WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

Aite Group
2019: The Push for Orchestrated Authentication

About Julie Conroy: Julie Conroy is research director at Aite Group focused on financial crime issues.
She has extensive product management experience working with financial institutions, payments
processors, and risk management companies, including several years leading the product team at Early
Warning Services.

Julie Conroy | Research Director | Aite Group

Time is money when it comes to fighting fraud. Organised crime rings,

With orchestration, the friction of stepped-up authentication

fuelled with billions of compromised data records, are systemati

is only applied when necessary, that is when the analytics flag

cally and methodically targeting the financial services value chain

that the context of the transaction is unusual behaviour for the

with sophisticated card fraud, application fraud, and account

customer.

takeover attacks. The volume of the attacks continues to increase,
since there is little in the way of adverse consequences for the

The concept of orchestration can also consider the end user’s

criminals (i.e., jail time).

preferences in authenticators since this is by no means universal.
The ability to tailor the authentication experience to the consumer’s

Another key challenge for financial institution (FI) fraud executives

comfort zone is important since this increases the potential that

is that even as the threat environment continues to escalate and

the transaction will be completed, rather than abandoned. An Aite

rapidly evolve, FIs are under intense competitive pressure to make

Group survey of consumers in the UK, US, and Singapore shows

the banking experience easier and frictionless (while regulators in

differing preferences for authentication mechanism by age, by

Europe appear to be taking the industry in a different direction,

country, and even by the frequency with which the consumer

thanks to the second Payment Services Directive’s requirement for

engages in digital commerce. A few examples of these differences

Strong Customer Authentication). In the face of these seemingly

can be seen in the figure below:

contradictory mandates, many leading FIs are turning to orchestra

• Only 41% of consumers between 25 and 40 prefer username/

ted authentication.

password, compared with 57% of consumers 65 and older.
• 56% of consumers between ages 18 and 24 prefer the fingerprint

What is orchestrated authentication?

biometric, compared with just 39% of consumers 65 and older.

Nowadays, authentication is typically a one-size-fits-all activity, with

This is understandable since fingerprints wear over time and the

stepped-up authenticators applied universally, regardless of the

fingerprint biometric is often difficult to use for seniors.

context of the transaction. For example, any time a retail-banking
customer tries to send a person-to-person payment or a commercial

• Younger consumers are more open to facial recognition techno
logies than older generations. ➔

customer tries to send a wire over a certain dollar amount, the user
must input a one-time password. Orchestration of authentication
seeks to better analyse the customer’s usual behaviour patterns
as well as the context of the transaction.

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WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

Figure 1: Consumers’ Preferred Authentication
Method by Age

About Aite Group: Aite Group is a global research and
advisory firm delivering comprehensive, actionable
advice on business, technology, and regulatory issues
and their impact on financial services. With expertise in
banking, insurance, wealth management, and capital
markets, we partner with our clients, delivering insights
to make their businesses smarter and stronger.
www.aitegroup.com

Source: Aite Group survey of 1,400 consumers in the UK, the
US, and Singapore, July 2018

How is orchestration achieved?
While intuitive in concept, orchestration requires advanced

• Advanced analytical engine: Orchestration requires advanced,

analytical capabilities. To achieve the potential of orchestration,

machine-learning based models that can baseline behaviour

FIs need to be able to harness the breadth of their customer data

for individual customers, and then understand when their

and apply advanced analytics that can effectively understand

transactional activity deviates from the norm, thus requiring

customers’ behaviour at the individual level, so that the decision

stepped-up authentication.

of when to insert friction can be accurately taken. To enable

• A uthentication hub: In order to provide a range of authenti

consumer choice of authentication mechanism, the bank also

cation options to customers, FIs are turning to platform-based

must have a flexible range of authenticators available. To that end,

authentication hubs that provide a range of authentication

many of the FIs on the forefront of this movement are approaching

options, and make it easier for the FI to swap in new authentica

the process in a phased manner and either building or buying the

tors on an ongoing basis.

requisite building blocks:
• Data lake: Many FIs on this journey are standing up their own

A handful of large FIs already have their initial iteration of orche

bespoke data environment for orchestration (as well as other

stration in production, and 2019 will see more joining these ranks.

real-time fraud needs) or streaming the data directly into the risk

Among those leading the way, there is a strong belief that the

engine, since data currency is important to effectively analyse

resulting enhancements to the customer journey will not only

the segment-of-one customer behaviour.

improve the bottom line, but will also prove to be a competitive
differentiator over time.

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WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

FIDO Alliance
Open Banking: Why a New Approach to Authentication Is Key to its Success

About Brett McDowell: Brett McDowell helped establish the FIDO Alliance in 2012 to remove the world’s
dependency on passwords through open standards for strong authentication. Previously, he was head
of ecosystem security at PayPal, where he developed strategies to improve online customer security.

Brett McDowell | Executive Director | FIDO Alliance

The concept of open banking promises users greater control over

Regulatory implications and limitations

their financial data; however, it is not without risks, and its success

Around the world, regulations are emerging in line with the growing

is tied to consumer confidence when it comes to the security

trend towards open banking. A prominent example is the second

and privacy of their information. Indeed, ahead of the arrival of

Payment Services Directive (PSD2), which came into effect in

open banking in the UK, a 2017 Accenture survey of more than

Europe at the start of 2018. PSD2 is being closely watched by

2,000 British consumers found that two-thirds were not prepared

other markets as open banking gains momentum, and regulated

to share their personal financial data with third-party providers.

service providers navigate concerns regarding the implications for

As Accenture’s managing director Jeremy Light commented at the

user privacy and security.

time, “Open banking has the potential to transform customers’
relationship with financial products, but it hinges on consumers’

Whether or not these concerns ultimately slow Europe’s adoption

willingness to embrace it.”

of open banking largely depends on how the Strong Customer
Authentication requirements defined in the PSD2 Regulatory Tech

Privacy concerns regarding the practice of “screen scraping”

nical Standard are enforced. To help ensure successful adoption

– where a third-party payment or financial data aggregation ser

of open banking, the FIDO Alliance has taken an active role in

vice accesses bank accounts on the consumer’s behalf using

helping European regulators and API design groups understand

their credentials – were surfaced by Barclays’ managing director

how standards-based, modern authentication can be used to

Catherine McGrath in response to the news of banking giant

deprecate today’s screen scraping practices while enabling a

HSBC’s foray into open banking with its aggregate app. The HSBC

timely and secure migration to the open banking API model.

application pulled financial data from different bank accounts
into one place for users. “With screen scraping, you have to give

It is critical that open banking is implemented via modern APIs

someone login details and then they can see absolutely everything;

and protected by high assurance Strong Customer Authentication,

you don’t have the ability to discriminate to say just six months’

as only an API-centred model is capable of protecting consumer

worth of transactional data,” Ms McGrath said. “Our view is the

privacy by providing granular access controls enabling the

best way for customers to share their data through APIs, so they

consumer to determine how much of their data is shared with any

are in charge of their data.”

given third-party service provider. And only modern cryptographicbased authentication is fundamentally resistant to today’s most
common and effective account compromise attacks, such as
phishing for passwords and even one-time-passcodes (OTP). ➔

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WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

Bolstering security, privacy, and usability with devicebased authentication
New and improved methods of authentication are now available
through open industry standards from the FIDO Alliance and
W3C. Collectively known as FIDO Authentication, this innovative
technology leverages on-device user verification such as the
biometric capabilities on our mobile phones and combines this
with interoperable protocols for strong cryptographic authenti

About FIDO Alliance: The FIDO Alliance works to

cation. Biometrics is a compelling proposition for banks and

address the lack of interoperability among strong authen

other financial services companies, due to their ability to perform

tication technologies and to remedy the problems users

without dependency on the user remembering or sharing a

face managing multiple passwords. The Alliance is

password, greatly enhancing customer security while improving

changing the nature of authentication with standards for

the user’s authentication experience.

simpler, stronger authentication that define an open,
scalable, interoperable set of mechanisms which reduce

In practice, by utilising public key cryptography techniques in

reliance on passwords.

combination with “one touch” biometrics and/or security keys,
the proliferation of smart devices can be used to provide stronger

www.fidoalliance.org

authentication without burdening users. If the customer uses
their fingerprint, face, or PIN code to unlock their device, banks
can now combine that same user verification method with strong
cryptographic protocols made available through on-device plat
form APIs, including a Javascript API for web apps. This would
allow customers to securely access their accounts online in full
compliance with PSD2 strong customer authentication require
ments, on both apps and websites.

Complying with SCA requirements – our approach

PSD2 should significantly improve the way third-parties access

FIDO certification provides a clear path for financial services orga

account data. Ultimately, public trust is essential for momentum to

nisations to comply with PSD2 strong customer authentication

continue to build around open banking and to ensure its enduring

requirements.

success. In order to build and maintain this confidence, a new
approach to authentication must be taken in which there are adop

The FIDO Alliance’s authentication standards provide a scalable

ted far superior modern methods that will enhance security and

way for the European financial ecosystem to meet PSD2 require

usability to the benefit of all concerned.

ments for strong authentication of user logins and cryptographically
signed transactions, while also meeting organisational and con
sumer demand for transaction convenience. FIDO certification
programmes offer an independent validation of implementations
conformance, interoperability, security, and even biometric perfor
mance when applicable. All certified devices are eligible to
be listed in a public registry of device metadata that enables a
financial service to evaluate the security properties of the device,
ensuring the device’s ability to comply with the restricted operating
environment requirements detailed in the PSD2 RTS.

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Customer Onboarding and Digital Identity
Verification

Customer Onboarding and Identity
Verification

An Introduction to Customer Onboarding
and Digital Identity Verification
Mirela Ciobanu | Senior Editor | The Paypers
Did you know that 59% of customers looking to open a bank account have walked away from online applications
in the last 12 months? The reason behind this: many application processes aren’t really designed for the digital age.
However, the good news is that smart fintech businesses and challenger banks are getting under the skin of digital iden
tity and using our uniqueness to unlock a frictionless future. They do so by tapping into technology such as behavioural
biometrics, machine learning and artificial intelligence, and lately also blockchain to support secure, intuitive and perso
nalised digital experiences that are beneficial for both companies and consumers alike.
In this chapter, we will see how the onboarding process looks like, not only from a customer’s perspective working with
a financial services institution (FI) or other regulated entities, but also from a FI’s perspective onboarding new clients.
Banks are looking for ways to increase conversion of new customers applying for their product/service, be relevant for them,
while also managing risks associated with KYC/onboarding processes. But customers are demanding a flexible (mobile
first) and modular onboarding process, and regulators are constantly watching the market and updated/adopt new
regulations (e.g. AMLD5).

Will banks be able to get this puzzle right, in time? After all, improving the customer onboarding experience should be a
priority for financial institutions, especially since regulations such as PSD2 will enable customers to change their financial
service provider more easily.

Onboarding new customers in a digital world: a bank’s perspective
After a few years of battles between incumbent banks and smart fintechs/challengers, everyone has agreed that digital
customers need digital processes. Nowadays, for many financial services organisations, the onboarding process is
considered costly, prone to fraud and creates unnecessary friction in the customer’s experience. This old approach is simply
not sustainable as it gives rise to high abandon rates and does not meet the expectations of a younger digitally ‘native’
customer.

How is my current onboarding process performing? The incumbents
Because many application processes aren’t really designed for the digital age, incumbent banks just replicate traditional
onboarding processes, pushing only some parts of it online. As a result, up to half of digital applicants can’t actually
complete an application online; instead, they have to go into a branch to verify their identities, or submit additional
documentation. ➔

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WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

An Introduction to Customer Onboarding
and Digital Identity Verification
In 2016, Signicat conducted a research called the Battle to On-board that aimed to portray the onboarding processes for
the UK financial services consumers. The research found that 40% of consumers had abandoned bank applications;
more than 1 in 3 (39%) abandonments were due to the length of time taken and a third (34%) were due to demanding too
much personal information. Interestingly, the company performed the same research two years later and the results
were similarly devastating for banks. In fact, it was worse than ever in the UK, with 56% of respondents having
abandoned an application. Among other impediments for applying cited by consumers were the fact that they had to
provide personal information by post or take it into the branch, and sometimes the language used by the bank was
confusing.
Nevertheless, some progress has been made with banks such as China Merchant Bank, one of the largest credit card
companies in China, Wells Fargo and the Bank of America that have reached out to AI assistants to improve customer
experience. For instance, Bank of America’s ‘Erica’ chatbot was designed to maximise the opportunities of the
growing demand for mobile banking and is capable of anticipating the financial needs of each individual customer and
sending them personal smart recommendations to help them achieve their financial goals.
In Europe, most innovative banks such as ABN AMRO, CaixaBank and BBVA have developed their own hassle-free
banking brands to cater for millennials and digital savvy users. For instance, in Spain, CaixaBank launched in 2016
imaginBank, a mobile banking service that enables users to control their finances, view their account securely within
Facebook, or draw money from an ATM without a card and send money to friends using only a mobile number. Similarly,
present in the Netherlands, Germany, Belgium and Austria, Moneyou, a brand of ABN AMRO, is a mobile banking service
connected to a mobile app called Tikkie. The app can be used by anyone, regardless of who they bank with; it is only
necessary that the person receiving the money to have the app. Once the users enter their name, mobile phone number
and the IBAN number, they can start sending payment requests via WhatsApp, Facebook Messenger, Telegram, QR-code
or text (SMS).

How is my current onboarding process performing – the challengers
Even from the first encounter with the clients, challengers have been praised for providing great user experience. And
why is that? They are digital, they can develop from scratch, have smaller product offering, they do not depend on
legacy systems, and are adopting new technologies to automate identity verification processes.
For example, Fidor Bank, a German online bank, founded in 2009, has a simplified, three-stage process of onboarding
depending on two essential variables: customer behaviour and product complexity. For the Fidor’s Smart Cash Account
product, the entry point for a new customer is to join the Fidor community, by supplying one’s credentials from Facebook,
with no obligation to buy anything. Step two is obtaining a pre-funded online ‘wallet’ that can be used to move money
within a closed loop as the user graduates to being a ‘customer’ after passing reduced KYC. This allows him or her
to test out Fidor, again without any further commitment, while still being part of the community. The third and last
step is to open a more traditional account after passing full KYC. Now the customer can also trade commodities, FX, and
digital currencies. ➔

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An Introduction to Customer Onboarding
and Digital Identity Verification
So, the Fidor Smart Cash Account behaves according to the way the customer registers, not according to a bankimposed process.
In general, banks must check the identity of everyone opening an account to prevent money laundering or other criminal
financing activities. While these ID checks used to take place exclusively at bank counters, nowadays many services use
video identification - customers rotate their ID card in front of a camera allowing staff to check for security features, like
holograms - or just selfies.
However, this simplicity might come at a cost. Germany’s N26 could be potentially vulnerable to money laundering
and terrorism financing, according to a German publication WirtschaftsWoche, which exposed a security gap at the online
banking startup. As the fintech rolled out a selfie validation procedure for account opening, it is easier for criminals to open
accounts with fake IDs. A WirtschaftsWoche correspondent saw how a man scanned a friend’s ID, added his own passport
photo to the ID, printed it out and stuck it atop of a white plastic card that was the same size as the office ID card in his
country. He cut the edges to make them round and the result was a new identification card that could be used to open a
new bank account.

“Go online or go home” – ways to improve it
INNOPAY developed a Benchmark that provides banks with essential insights into how to make a good first
impression on customers. INNOPAY consultants have identified six key actions that banks should execute in order to
provide the prospective customers the best-possible onboarding experience and increase conversion rates.
1. Eliminate all channel breaks to support an end-to-end fully digital onboarding experience. For example, banks should
adopt paperless onboarding processes as well as processes for which no physical signature is required.
2. Make required onboarding information and prerequisites transparent and understandable for the user. For instance,
clear information and communication are key, so that the potential customer has all relevant details at hand and can
run through the process in a smooth way.
3. Guide the customer through the onboarding flow and empower customer support to help prospects during onboarding
in a quick and high-quality manner. The end result is that the prospects always know where they are currently positioned
within the process and find information quickly. If they do not understand why the bank is asking for certain information or
why the bank requires the prospect to use a certain identification method, they can rely on professional support provided
by the bank.
4. Make use of tools that ease the process of data entry and eliminate errors. Thus, errors can be prevented by various
in-process validation tools to increase conversion and also to reduce manual efforts by the bank, leading to cost
reduction.
5. E
 nable customers to instantly login and start using the payment account after a successful onboarding.
6. Deliver a consistent look and feel throughout the whole onboarding experience. ➔

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An Introduction to Customer Onboarding
and Digital Identity Verification
Overall, we can conclude that banks can stay relevant for their customers if they transform the entire on-boarding process
online. So far, we have seen that consumers are more likely to apply for a product if the process is 100% online and if
paper-based identity checks are eliminated.
Moreover, the onboarding process could be accelerated if they could use their verified physical ID, such as a passport
or driving license, and here, in the 100%-online application process, an important role is played by identity verification.

Identity verification: some last thoughts
Identity verification is proving that specific identity attributes are actually connected to the person, entity, or thing that
they are intended to represent. According to Josje Fiolet, Digital Onboarding lead at INNOPAY, video identification,
reading the chip of the document via NFC (Near-Field Communication), using eID solutions, or taking a picture of the
ID document can enable businesses to answer questions such as ‘Is the customer’s document valid?’, or ‘Is the person
really who he/she claims to be?’.
To build a reliable profile of the customer, other techniques can also be considered. The trail of data that we leave behind
may not be an identification method in itself, but it can serve as an additional step when building a trustworthy profile. For
example, our activity on social networks can be used to provide a certain level of assurance of someone’s identity, and
the account’s profile picture can be matched with the picture in the identification document.
For effective client identification, a business must have access to a range of technology solutions that can indicate
the veracity of an individual along with providing access to worldwide trusted datasets that contain billions of data
elements of information from governments/public bodies, including global postal, telecoms and other public data, to
validate the underlying data associated with financial services provision. Not only does this deliver a 360-degree view of
the individual, but it also authenticates who they are.
The key to all these lies in balancing these elements in order to create perfectly tailored products. By understanding
the unique needs of customers, financial businesses can help governments and major institutions fight fraud and grant
access to underserved and legitimate customers. We can conclude by underlying one of Money 2020’s ideas from the
2018 edition: once we solve this puzzle of identity custodianship, we can craft a masterpiece in which uniqueness is
celebrated, protected and used responsibly.

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Melissa Global Intelligence
The Paypers sat down with Barley Laing, the Managing Director of Melissa Global Intelligence, to discuss the latest ID
verification and KYC trends and developments in the financial industry.

About Barley Laing: Barley Laing is Managing Director at Melissa Global Intelligence, where he leads
commercial and operational activities, helping the organisation to become a global leader in identity and
data verification services. Previously, Barley was CEO of World Address and 2L Technologies, and has
held senior positions at Xerox, British Telecom, ADC and Shell.

Barley Laing | Managing Director | Melissa Global Intelligence

How would you describe Melissa for those who are

(Politically Exposed Person), a database containing information on

not familiar with the company?

world leaders for 200+ countries.

Melissa is a leading provider of global identity verification solu
tions, utilising innovative technology to provide our clients with

21st century customers

a data-driven competitive advantage and enhanced Know Your

expect quick and secure financial

Customer (KYC) and Anti-Money Laundering (AML) processes to
help combat fraud.

service provision. Melissa’s wide
range of global identity solutions

How can financial institutions that are looking to comply

authenticate customers in real-

with AML take advantage of Melissa’s services to
deliver on the customer’s expectation for convenience,

time so organisations don’t have

speed and simplicity, while also mitigating the risk of

to compromise the customer’s

fraud?
21st century customers expect quick and secure financial service

experience while mitigating the

provision – if the consumer experience is poor, they will move

risk of fraud.

to another provider who can deliver a better outcome. Melissa
offers a range of global identity verification solutions that are
easily integrated into existing customer service platforms and IT
systems. Melissa’s solutions range from ‘proof of address’ check

A cornerstone of global anti-money laundering

to full biometrics that authenticate customers in real-time. Using

controls are the KYC processes/requirements. How

Melissa enables organisations to retire costly legacy systems,

does Melissa perform such processes?

reduce headcount for manual review, and avoid reputational risk.

Melissa can quickly perform KYC through our ID Verification

Regulatory AML checks are completed in a fraction of a second,

solutions (IDV), providing access to global datasets containing

where manual review could take days to complete. By using

billions of trusted identity elements from the government, global

Melissa, access to global identity data, sanctions and watchlists

postal, telecoms data and other data sources in real-time. The

are one click away – speeding the processing of applications.

underlying data provided at input can be cross-checked, building

AML Screening is an important step in determining the risk of

a confidence score for the applicant based on strength of the

an individual, to make sure business is not being cond ucted

underlying data. Melissa helps further by identifying individuals at

with those committing money laundering or financing terrorism.

the ‘point of entry’ via imaging and facial recognition technology.

Melissa screens against global sanctions and PEP checks

➔

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This is done by checking the applicant by cross-referencing a live
image (biometric facial recognition of a selfie) against a scanned
ID document image (eg driver license photo). ID documents are
validated to ensure they are not fake, and the held data uplifted
via Optical Character Recognition (OCR) to avoid mistakes being
made at application.

About Melissa Global Intelligence: Melissa delivers

How would you explain the difference between effec

flexible, real-time technology solutions for global identity

tive client identification and poor KYC standards?

verification and entity resolution. Since 1985, more

This difference can be categorised depending on perspective:

than 10,000 global customers including banks, credit
unions, mortgage lenders and payment providers have

Consumers want a slick application process. If the supplier

relied on Melissa to verify an individual’s identity with

organisation can quickly establish a customer’s ID, the consumer

our best-of-breed solutions for global address parsing

will have confidence in that provider.

and verification, and advanced matching algorithms –
to minimize risk and fraud.

Financial Service Organisations with poor KYC processes can
lose customers at application, but this could also lead to fraud

www.melissa.com/global-intelligence

and compliance issues that will impact their brand and bottom
line. Using modern KYC initiatives effectively can mean better
sales and increased customer engagement.

Click here for the company profile

Fraudsters actively target organisations with poor KYC processes,
they know less effective ID resolution means easier victims.
• As artificial intelligence helps brands engage with consumers

Your product package includes a solution that

more efficiently, it could evolve to play a role in ID verification

addresses ID verification that gathers data in order

in a way that helps brands to deliver a seamless customer

to complete People Data. As sometimes not all

experience.

gathered data is useful, how does your solution

• The role of behavioural biometrics in ID verification will grow and

maximise the value of this data?

evolve. This could include monitoring how people type on the

Research shows many ID checks fail from incorrect data entry,

keyboard and use the mouse or touchscreen. It could become

organisations can waste money by running ID checks that are

an important way to authenticate an ID.

destined to fail because the basic data veracity was not confirmed

• Augmented intelligence will play a key role along with artificial

first. Melissa’s solution ensures underlying data is correct before

intelligence, working to enhance human intelligence. For identity

performing the ID check, this happens in fractions of a second

verification, it will mean not only smarter intelligence, but also

and without disruption to the customer. Having a complete and

stronger intelligence.

validated identity record of a customer means that organisations
will better communicate, and can complete transactions with their

In the shorter term:

client base in confidence, maximising the value of their customer

• Growth in facial recognition technology will confirm ID.

data.

• As consumers increasingly worry about their ID being stolen,
there will be a strong evolution in technology that verifies and

Can you identify possible trends in ID verification?
And what can we expect in the next five years?
In the next five years I expect that:

protects customer data, as brands seek to placate their fears.
• Fraud is a growing global issue, we see IDV becoming the norm
across all sectors and service provision beyond financial ser
vices.

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Trulioo
Hard Problems: Identity Verification, Fraud Prevention and the Giant Leap Towards
Financial Inclusion
About Zac Cohen: Zac Cohen is a versatile leader experienced in managing and scaling high-growth
companies. Zac is currently the General Manager at Trulioo – a hyper-growth Vancouver startup solving
global identity challenges associated with international regulatory compliance, fraud prevention, and
trust and safety online. He is passionate about fostering change-makers who want to make an impact
and are engaged in building groundbreaking solutions to solve our world’s most pressing problems.

Zac Cohen | General Manager | Trulioo

At the turn of this decade, the “GDP of the internet” began rising

The challenge

precipitously; online merchants, particularly micro-merchants,

As it happens, the success of both CDD and fraud prevention

began opening online storefronts in increasing numbers. Yet the

hinge on a critical process: Identity verification. When it comes

technology powering the flow of money online was simply not

to highly competitive and fast-growing companies, it becomes

keeping pace. It was this set of unique circumstances that necessi

imperative to move quickly and capture as much market share

tated the creation of a new generation of payment solutions. With

as possible. For these companies, it becomes essential to have

their elegantly simple code and their vast network of relationships

an identity verification process that can scale quickly, efficiently,

with credit card issuers, banks and financial services, these

and cost-effectively. In order to do that, these companies need

payment solutions open the doors to a truly borderless market

access to a variety of trusted and reliable data sources; but, as

place where online merchants and buyers could transact freely.

it happens, the data that is being sought to verify the identity of
merchants in these markets is often available exclusively with

A layer of trust

local data vendors.

There was, however, another problem that stood in the way: If these
payment solutions wanted to enter new markets, particularly

Consider a growing payments company; let’s say it is foraying into

unchartered and unfamiliar ones, they needed to first build a layer

the Peruvian market. It will likely struggle to forge relationships

of trust between themselves and their new customers – the online

with local data partners there; it would have to sign multiple

merchants.

contracts with multiple data partners in order to gain access to
a sufficiently large swathe of identity data. This process requires

This layer of trust needs to be built on:

a great deal of time, resources and familiarity with the local eco

• Customer due diligence (CDD): Ensuring a level of CDD that is

system; identifying, procuring, and vetting data sources, and then

commensurate with the risks involved in transacting with new

manually undertaking security and compliance checks. Even from

customers in these regions. For payment companies, banks,

a technology standpoint, the time and investment required to build

and financial services providers, this includes meeting regulatory

an API for every data source that the company intends to tap into,

requirements such as Know Your Customer (KYC), Anti-

become critical roadblocks to their expansion plans. Given these

Money Laundering (AML).

constraints, it would take anywhere between six months to a year

• Fraud prevention: While the digital economy has created unpre

for these companies to integrate each data source onto their

cedented opportunities for both established and upstart mer

systems. Now, consider the total time it would take to integrate

chants around the world, it is also prone to fraud. Indeed, preven

with multiple data sources across multiple countries; that’s when

tion is the operative word here, because very often fraud is only

the project begins to look unfeasible. ➔

detected after the fact.

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WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

The solution: a single API to access identity data
across the world
Trulioo has, to a large extent, mitigated this problem; as one of the
world’s preeminent identity verification solutions, we have access
to hundreds of data sources. Through a single API, GlobalGateway
-- Trulioo’s flagship solution -- provides secure access to over 400
data sources across the world. With GlobalGateway, our clients

About Trulioo: Trulioo is a global identity verification

no longer need to sign multiple contracts with multiple parties;

company providing advanced analytics from traditional

instead, a single contract with Trulioo provisions it with access to

and alternative data sources to verify identities in real-

data from multiple data partners. In fact, one of the world’s leading

time. Through GlobalGateway, Trulioo’s electronic

cross-border payroll solutions uses GlobalGateway to verify the

verification platform, clients are able to streamline their

identity of payees in 52 countries across different continents,

cross-border compliance needs, helping them meet

including Chile, Jordan and Egypt.

Anti-Money Laundering and Know Your Customer
requirements, while simultaneously mitigating fraud and

Instant access to a plethora of data sources also goes a long way

reducing risk.

in mitigating risk; for instance, companies tend to put off their CDD
process till such time as a merchant starts transacting beyond a

www.trulioo.com

certain dollar threshold — this is mainly because traditional pro
cesses of identity verification were manual, slow and required much
human effort. The instantaneity of identity verification, which Trulioo

Click here for the company profile

enables, allows companies to place identity verification at the
very beginning of merchant onboarding; the same instantaneity
makes it easy for many of our clients to verify (rather, reverify) the
identities of their existing merchants. As a result, our clients are

To that end, we began partnering with MNOs around the world.

able to understand their entire consumer base quickly and take

Currently, we have access to identity data provided by dozens of

timely cognizance of any risks that their merchants might pose.

MNOs, which cover 1.8 billion mobile users. When the traditional
KYC-compliant sources of data are combined with MNO data,

Mobile ID verification: a boost for financial inclusion

one is able to obtain more insight into the identity that one is trying

and an antidote to fraud prevention

to verify. No less important is the added value that MNOs bring to

From very early on, we, at Trulioo, saw identity verification as a

fraud prevention; for example, when verifying a merchant’s mobile

catalyst for financial inclusion; to that end, we realised that we

number against MNO data, GlobalGateway can flag numbers that

needed to cover hard-to-reach areas, which lacked traditional

are VoIP numbers, which are often prone to misuse by fraudsters.

sources of identity data. As of October, Trulioo can verify the
identity of up to five billion people, or two-thirds of the world’s

We are one breakthrough away from financial inclusion

population, along with 250 million businesses, including micro-

If we look back at the evolution of online commerce, we realise

merchants. In developing areas of the world, where a large part of

that at different points, there have been different technological

the population is “unbanked”, and traditional sources of identity

breakthroughs that have catalysed the sector in different ways.

data have limited coverage, mobile network operators (MNOs)

The revolution in online payments was one such breakthrough;

can play a game-changing role. In developing markets, the mobile

identity verification is on the cusp of being the next breakthrough.

user base outstrips that of financial services: for instance, over the

Today, merchants from around the world can transact online as

last four years, over a billion mobile accounts were opened around

free agents of the online economy; our dream is to see a world

the world, compared to 500 million bank accounts. Indeed, the

where they are able to transact not just as free agents but equals

data in possession of MNOs can go a long way in verifying the

of a financially inclusive ecosystem.

identity of otherwise “thin-file” merchants.

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INNOPAY
Digitising Complex Onboarding Processes: Who Will Be Leading in Getting It Right?

About Josje Fiolet: At INNOPAY Josje

About Guy Rutten: Consultant,

leads the Digital Onboarding practice.

Digital Onboarding Specialist, Guy

She has a background in digital banking,

is an experienced product owner

digital identity, and fintech. Her speciality

and analyst working on onboarding

is combining regulatory requirements,

processes for digital banking appli

customer preferences, and organisa

cations.

tional capabilities.

Josje Fiolet | Manager, Lead Digital Onboarding | INNOPAY

Guy Rutten | Consultant | INNOPAY

In the past year, customer onboarding processes for simple financial

are maintained. People checking documents and re-entering data

products have become much more convenient. The INNOPAY

are both expensive as well as error prone. It is expected that digital

Onboarding Benchmark (2018) shows that almost all Dutch

challengers will change the onboarding landscape for complex

banks now have a customer friendly, digital onboarding process

products in the same way they did for the “simple” products.

for opening a payment account, inspired by the challengers like

However, established players still manage to keep challengers at

Revolut, N26, and Monzo offer across Europe. Thinking about how

length, as they have the advantage of a large and typically loyal

much the market has changed in the past year, it is only a matter

customer. But for how long? Let’s talk about what is needed to

of time before onboarding of more complex products will be digi

keep it that way.

tised as well. So the question is: who will be leading in getting it
right, banks or fintech?

1. From risk at the product level, to risk at the
customer level

For more complex products the onboarding process is still very

Obviously, not all customers are the same and therefore the risk

complex and cumbersome, as non-digital steps are involved.

profile differs per customer. Banks, however, are used to deter

Complex products have stricter regulatory and risk requirements –

mine the risk involved at product level measuring every customer

and with AMLD4 set into national law in 2018 and AMLD5 already

against the same stick. The onboarding process for complex pro

coming up, no leniency is expected any time soon. Regulation is

ducts has become unnecessarily difficult for most customers,

often seen as an impediment to customer facing innovation and

having a negative impact on the user experience and conversion

perceived as a trade-off for user experience. At INNOPAY we

ratios. Furthermore, the process forces banks to put the same effort

see this differently. Existing technologies can both enhance the

in the low as well as the higher customer risk profiles in terms of data

customer experience and improve the security of the onboarding

gathering, file creation and monitoring. A personalised process

process.

can save time and cost for both the customer and the bank.

For banks, it is time to approach onboarding from this perspective.

2. Modular onboarding building blocks

First, because consumers expect a fast and fully digital experience.

Onboarding processes preferably cater for a variety of contexts, as

In a commoditised business like transactions this is becoming the

explained above. Modular building blocks form the basis for pro

differentiating experience. Second, because compliance cost for

cesses that serve different products, customers and channels. ➔

both implementation and accuracy will rise if manual operations

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WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

The onboarding process can be designed with different sets of
building blocks, which might vary given the specific relevant
context. The required level of compliance and the risk involved
can be used to determine which building blocks apply for a
specific situation.
Within the different building blocks, new technologies can and

About INNOPAY: INNOPAY has a strong international

should be used to add both security and convenience for the

track record as innovation expert in the digital trans

customer and bank. Innovative technologies are often perceived as

actions space. Our aim is to help companies, organi

risky due to lack of experience and best practices. Fortunately, the

sations, and consortia develop innovation strategies,

European Supervisory Authorities (ESAs) are helping out.

co-create new products and services, and digitally

They pub lished a guideline with questions that help banks

transform their business models.

assess if an innovative solution is fit for purpose. In short, ESA’s
guidance determines not if, but how new technology can be

www.innopay.com

used to optimise a building block.

3. Start small with the end in mind
So, how to design and implement a more personalised and modular
process, using technology in a controlled manner, as described
by the ESAs? Improving the onboarding process is quite complex
as it touches upon so many systems and departments. A good
start is to describe the ideal process. After setting the end goal,

To prioritise initiatives, the simple yet effective “Effort x Value

the process should be split up in building blocks that can be

matrix” can be used. The focus should be on the Quick Wins.

optimised separately. This enables banks to focus on operational

“Quick Wins” are improvements that require relatively little imple

effort per building block, rather than having to change everything

mentation effort and have a big impact on the value created.

at once.

Examples are improvements in user experience like automated
document read and reduced number of required data fields. Not
only will the customer experience improve as straight-through
processing ratios will increase, but also data quality will improve,
enabling banks to enhance decision making on how to best
monitor customers going forward.
The Quick Wins can only be derived from picturing the “Bigger
Goals”. Working incrementally will lead to quicker results, a steeper
learning curve, easier buy-in of internal stakeholders, and most
importantly, it shows the customer you are taking them seriously
by continuously improving the journey.
To conclude, a step by step approach, using new available techno
logies in a modular way, can help financial institutions to digitise
more complex products, make processes more secure, and most
important, keep their customers satisfied and loyal in return.
So maybe this time the banks will lead the way!

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Steve Cook
Intro Steve Cook on latest trends in biometrics technology and the value of biometric authentication for the KYC process

About Steve Cook: Steve Cook is an independent biometrics and fintech consultant, helping banks,
ecommerce enterprises and fintech startups to navigate the complex world of biometrics. He advises
financial institutions regarding their deployment of biometric authentication and digital identity strategies;
assisting in the process of vendor selection, biometric modalities and types of solutions. Steve has over
six years’ experience in the biometrics industry previously with Daon and Facebanx. He now operates
his own consultancy business Biometrics for eCommerce and he is currently providing services to a
fintech startup FaceTec as well as a major European bank.

Steve Cook | Biometrics and Fintech Consultant

What’s new on the biometrics technology market and

How does biometrics augment the KYC process in

which method seems to have a greater potential?

order to assure compliance?

Behavioural biometrics is one of the fastest growing of all the

Biometric technology forms one part of the KYC process and it

biometric sciences and there are many new fintech companies

can be used in the remote on-boarding channel when signing

offering different types of solutions. Sometimes known as passive

up new customers. Typically, the biometric data, such as your

biometrics, it usually involves the customer not doing anything

face, is captured together with an ID document, like a passport

unusual during a user session.

or driving license, via a smartphone’s camera. The ID document
data can be verified separately through known third parties.

Behavioural biometrics also provides an analytical tool to mode

The face data is compared with a live face capture and the photo

rate risk. It actually monitors the user’s behaviour during the visit

ID for a comparison match. Then a risk score can be applied to

and detects anomalous activity. There are some 2,000 parameters

the matching process.

that behavioural biometrics depends on and they give a clear
indication of someone’s unique identity. These range from moni
toring human motion gestures and patterns to keystroke dyna
mics and factors – such as speed, flow, touch, sensitive pressure,
and even signature formats. They also use machine learning and
AI as a continuous form of authentication.
Combining a number of biometrics in a step-up process or what is
called multimodal biometrics would be used in cases where higher

Banking and ecommerce are
just some of the channels that we
are seeing where biometrics are
becoming standard in the areas
of digital identity and KYC.

risk transactions are processed. This happens in order to prove
someone’s identity, known as Strong Customer Authentication.
It is important to state that it’s nearly impossible to prove that
Some organisations prefer biometric authentication to be stored

an ID document is 100% genuine through existing digital methods.

on the device, or as a server-based solution known as on premise,

NFC can read the biometric chip on a passport to obtain the

or as a SaaS cloud deployment known as software as a service

original data and this can be verified. ➔

model. The SaaS model is currently proving to be the most popular.

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However, some sophistic ated fraudulent passports can still

According to Goode Intelligence, by 2020, 1.9 billion bank

fool the system. Using the liveness functionality during the

customers will adopt biometrics for a variety of financial

on-boarding session helps to prove the person is there in real

services, including ATM cash withdrawals, proving identity for

time, but proving the true identity has to rely on other checks.

digital on-boarding, accessing digital bank services through

Most Government databases are not accessible for commercial

IoT devices and mobile bank app authentication. Biometric

use in order to verify people, thus remote digital on-boarding

authentication for banking purposes is going to generate USD

does carry some risks.

4.8 billion in revenue by 2023. I believe biometric authentication
will become ubiquitous everywhere and we will be able to

What benefits does biometrics for KYC management

eventually say goodbye to the “passwords”.

bring for banks?
For branch banking, biometrics can be captured within a store
via a tablet and, generally, bank staff will use the device for
on-boarding new customers with proof of ID. However, we are
seeing this trend shifting away from traditional branch banking
towards online and mobile.
Digital on-boarding is proving to be extremely popular with the
tech savvy generation known as the millennials. This generation
is doing most things via their smartphone; whether it is retail
purchases, social media, or gaming. Mobile digital banking is
becoming more popular amongst the 18-35 year olds and by
the end of 2018 it will overtake online, telephone, and branch
banking combined.
In 2010, branch banking accounted for around 70% of all
banking. By 2020, it could be as low as 15-20%, while digital
banking will reach a staggering 80%. Today, bank branches are
closing at a rate of around 60 per week in the UK alone. All the
large banks have to adapt quickly to the new customer trends
for more digital-only platforms. Many new challenger banks
have launched innovative banking services via digital channels
and are in direct competition with the more established branch
banks.

Do you think biometric authentication will become
a norm one day or a standard for automation of
KYC procedures in sectors such as banking and
ecommerce?
Biometric technology is already becoming the norm in many
verticals: from aviation and automation to education, health,
insurance, and retail. Banking and ecommerce are just some of
the channels that we are seeing where biometrics is becoming a
standard in digital identity and KYC areas.

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Digital Identity at Border: Between
Standardisation and Innovation

Consult Hyperion
Making Sense of Digital Identity

About Steve Pannifer: Steve is COO at Consult Hyperion and a digital identity and security expert. Steve
has a detailed understanding of the global digital identity market having advised numerous organisations
around the world on all aspects of digital identity – commercial, technical and regulatory. He is actively
involved in key identity initiatives in both government and financial services sectors and is a regular
speaker at digital identity conferences and events.

Steve Pannifer | COO | Consult Hyperion

Everyone is talking about digital identity

Secondly, we need a model that helps us fix the problem. At Consult

Individuals are becoming increasingly aware of the lack of control

Hyperion we use this one:

they have over their personal data, which is in effect what con
stitutes their digital identity. Banks are facing new regulatory
requirements, such as 5AMLD and PSD2, making digital approa
ches identity an imperative. Other sectors such as health and
employment are encountering identity-related issues as they seek
to go digital. And there are numerous attempts at creating digital
identity systems being made by governments and industry – all
different, solving similar problems in different ways.

When a customer onboards to a new service, the service will need
to establish that the customer is real and unique. This is what we

How can we make sense of it all?

call “identification”.

Firstly, we need to understand what problem we are trying to
solve.

It is quite likely that the service will give the customer an app or
ask them to set a password, allowing them to access that service

Today identity is held in silos. Each organisation a customer inter

more easily from that point forward. This is what we call “authen

acts with has its own “virtual identity” for the customer, consisting

tication” – asserting that the user is a previously established real

of the personal information that the organisation needs. These virtual

customer.

identities are locked up. If the customer wants to open a new bank
account, buy insurance, submit his or her taxes and so on, the

The customer should then be given control over how their infor

existence of these virtual identities does not help. Today custo

mation (ie their virtual identity) is used. This is what we call “autho

mers have no way of saying “Look, my bank can tell you who I am”.

risation”. Unfortunately, today this too often just boils down to
giving marketing preferences. It should be much more than that.
A customer should be able to say “Yes, please help me access that
other service by telling them you know me”. ➔

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The key to creating portable virtual identities is the authentication
domain in the middle. A customer should be able to present
information signed by one organisation (a “claim”) to another
organisation and use their authentication method to show digitally
that the claim belongs to them. This is how you would allow some
one to digitally say “Look, my bank can tell you who I am”.
Digital identity is the bridge between real identities and virtual iden

About Consult Hyperion: Consult Hyperion is an indepen

tities. It is the means through which a person or an organisation

dent consultancy. We hold a key position at the forefront

can make their virtual identities portable.

of innovation and the future of transactions technology,
identity, and payments. We are globally recognised as

Solutions that solve particular problems

thought leaders and experts in the areas of mobile, iden
tity, contactless and NFC payments, EMV, and ticketing.
www.chyp.com

The digital identity solutions that have been developed to date

The various Self Sovereign Identity projects are about giving people

have solved particular problems.

total control over their virtual identities; but to work, people will
need to be given tools in the authentication domain (eg wallets) to

India’s Aadhaar programme is fundamentally about creating a

protect the keys that unlock those virtual identities.

register of real identities. In that sense, it is not really a digital
identity system but was intended as a foundational step towards

Making it work for everyone

inclusion. Mainly, the widely reported issues with Aadhaar arise

A key barrier to the adoption of digital identity solutions has been

from the ways in which the register has subsequently been

the perception (and in some cases the reality) that it will disrupt

connected to digital identity systems.

the relationship with the customer. Most solutions to digital iden
tity today involve an “Identity Provider” that could equally be des

eIDAS, GOV.UK Verify, and the successful Nordic Bank ID schemes

cribed as an “Identity Disintermediator”. Instead of mobilising

all solve the narrow but important problem of allowing people to

virtual identities, they create a new silo of data that sits between

create and assert a digital version of their real identity. They do

the customer and service. No service provider wants this.

not, in their current forms, solve the wider need for portable virtual
identities.

In order to work, digital identity needs to be a low-cost enabler that
is focused on providing the customer with the ability to move seam

The GSMA has focused more on authentication, as that is the pri

lessly (and securely) from one digital service to another. Until this is

mary place mobile operators can play. FIDO provides similar but

widely understood we will continue to have fragmented solutions

over-the-top device-based authentication.

with narrow applicability and limited adoption.

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EEMA
eIDAS – Its Role in Our Future

About Jon Shamah: Jon Shamah is the Chair of EEMA. He is a recognised international Digital Identity
& Trust Subject Matter Expert, specialising in maximising the operational value chain of national eID
schemes. He is a frequent public speaker on issues regarding identity, Trust and EU Trust Services
regulations, and he contributes to European Programs such as FutureTrust and LIGHTest.

Jon Shamah | Chair | EEMA

Imagine a world where citizens of the European Union can travel,

be legally admissible across the entire EU. Know Your Customer

work, and live wherever they choose, regardless of their native

(KYC) is also simplified by eIDAS; thus, by using a “Notified eID”,

country. A place where you can transact with any EU bank or other

the process can be conducted almost entirely online.

financial institutions; where you can keep your original records of
your pensions, savings, health data, no matter where they were

So what does this mean for a business?

initially created.

Digital Transformation has been proven to be a major source of
cost and time savings when applied to workflows and processes

This is the goal of building The Single Digital Society envisioned

in business. This is particularly obvious in the Financial Services

by the EU, for which the first big steps have already been taken.

sector, where many products and services require legally binding

Those steps are an assembly of identity, trust, data protection,

agreements by all parties. A typical example may be represented

and finance measures helping both citizens and business to

by the application and provision of a mortgage or loan.

achieve the EU’s vision of a Single Digital Society.
Digital Transformation of these workflows and digital signing of
Arguably, the eIDAS Trust Services Regulation is the most

complex documents can save substantial amounts, but until now

important of these measures. This regulation, which is an

they have traditionally been restricted to the home Member State

applicable law in all Member States, brings a “level playing field”

and its citizens, mainly for reasons regarding legal admissibility

across the entire EU to identity recognition, digital signatures,

and KYC compliance. This limits the potential market.

company seals, and other related services. It also enables digital
legally admissible registered email services.

eIDAS can bring strong benefits. Qualified eIDAS signatures are
legally admissible across the entire EU, and most citizens can

Simply, identity credentials that are accepted in one Member State

use the signing certificate in their National eIDs. This means

for authentication in order to access government services must be

that, with little additional effort, market size can be significantly

recognised in all Member States for similar government services,

increased, and so the Return on Investment for digitisation can

if they are declared (“Notified”) to the EU by that Member State.

be really improved with little extra risk. This applies even better
to organisations that have responsibilities distributed across

Similarly, high confidence Qualified Digital Signatures (which

many countries. ➔

require face-to-face enrolment) issued by a Qualified Trust
Services Provider (QTSP), whether a person or a corporate, will

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The relation with PSD2 and SEPA
eIDAS is also specified as the identification scheme used in
the new Payment Services Directive (PSD2). This disruptive
Directive brings the prospect of permissioned direct access to
end-user bank accounts. Third Party Provider Financial Services
companies (TPPs) can now offer a whole range of services that
were previously not possible without breaches of security. For
example, before PSD2, if an end-user wished to obtain a single

About EEMA: EEMA is a leading, not for profit, inde

consolidated view of his financial status, across many financial

pendent European think tank including topics on

institutions, the end user would have been forced to provide the

Identification, authentication, privacy, risk manage

account aggregator with the account numbers and password.

ment, cybersecurity, the Internet of Things, artificial

Not only was this very much frowned upon, and an obvious risk,

intelligence, and mobile applications. EEMA helps

but there was also no possibility of an audit trail as essentially

organisations to maintain their competitive edge through

the aggregator was logging in as the end-user. Now, with PSD2,

projects, world class events, and Pan-European

the TPP will be able to view and alter the account within the

business networking at the highest levels.

parameters permissioned by the end-user.

www.eema.org
This does require a high degree of certainty of the identity of the
end-user and their consent to actions, as well as the certainty that
the entire process is originating from the known and correct TPP.
PSD2 calls for the possibility of accessing customer account
information, to initiate payments on behalf of the customers, and
this access to be based on Strong Customer Authentication (SCA).
Qualified Certificates (QWACs) for Websites and Qualified Certifi

In summary, eIDAS will quickly become an integral regulation

cates for Electronic Seals (issued by Qualified Trust Service

in our financial lives and an enabler, making the Single Digital

Providers) will enable the identification and the verification of the

Society a practical reality for European Financial Services.

payment institution by a third party. This process will use identif
ication based upon the legal name of an organisation, its registration

Further information on eIDAS can be found at: https://ec.europa.

number, and its primary role in the transaction.

eu/digital-single-market/en/discover-eidas

The Single European Payment Area (SEPA) calls for Europeanwide payment mandates, in which “The creditor may offer the
Debtor an automated means of completing the mandate, including
the use of an electronic signature.” Typical uses are regular bill
payments, credit agreements, etc.
A Qualified Digital Signature issued by a Qualified Trusted Service
Provider (QTSP), being legally admissible across the EU, is the
ideal vehicle for this certainty across the EU and is seen as a
major component of SEPA. The result is the capability to set up a
regular payment mandate to fulfil any cross-border transaction or
service provision.

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Innovate Identity
Self-Sovereign Identity and Shared Ledger Technologies

About Ewan Willars: Ewan is a senior associate with Innovate Identity. In recent months, he has
undertaken digital identity market analysis for several national and international clients in the airline and
banking sectors, and currently sits on both the UK Civil Aviation Authority’s future’s group, and the UK
Fintech Delivery Panel.

Ewan Willars | Senior Associate | Innovate Identity

A vanguard of a bright new digital identity world, or an

individuals to have greater control over how and when their per

over-hyped innovation?

sonal data is used. Self-sovereign is a child of its time, and as such

The digital identity industry worldwide has been subjected to

its relevance can’t be easily ignored.

a series of over-hyped innovations – new technology and new
approaches that each promise to be the vanguard of a bright new

Shared ledger technology can unlock the potential

digital identity world, but seldom deliver on the hype. This leaves

of self-sovereign

senior decision makers unsure what to believe, and whether

Self-sovereign, as a concept, is blind to technology. However, the

substance lies beneath the perennial excitement of innovation.

synergy between shared ledger approaches and the self-sovereign
ethos is readily apparent. Neither self-sovereign nor shared

The latest approaches to emerge have been the concepts of

ledgers are dependent on each other; other forms of personal

self-sovereign identity (where you control your personal identity

attribute storage and transmission are available.

data locally, often on a device and with a personal key of some
kind) and shared ledger technologies (where a common digital

However, the ability of self-sovereign and shared ledger combined

ledger of transactions and data is updated across all the scheme

to maintain a common, trusted record of attributes and events,

users). Both individually, and applied collectively, they have

putting users in direct control of their personal identity data, and

generated huge conversation and excitement.

simultaneously removing the need for large central entities to
provide the attribute exchange is a potent and perhaps unique

But what evidence suggests that these approaches may succeed,

combination.

when so many others have fallen by the wayside?

Self-sovereign and shared ledger are fast emerging
The moment feels right for self-sovereign

as credible ways to assist those suffering identity

Self-sovereign feels like an approach that is emerging at the

challenges

right time. Whether born by the new move towards providing

The lack of a means to demonstrate one’s identity, to assert who

people with better control over their personal data or merely in

you are at crucial times, is a major issue around the world for a

alignment by chance, self-sovereign feels very ‘of the moment’.

billion people or more. The UN Sustainable Development Goals
seek to ensure a legal identity is available to all by 2030;

When the hype is carefully peeled back, the natural alignment

digital identity is one (perhaps significant) means to achieve that

between a self-sovereign approach and the recent direction of

goal. ➔

data protection regulation is laid clear, with both providing for

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Providing every individual with a way to demonstrate their
identity would be a big step forward. In particular, the shared
ledger approach, where individuals can ‘build’ a trusted identity
over time, even in the absence of traditional identity credentials,
is a potentially very positive development.

Overall, the positives may outweigh the negatives,
but significant barriers to adoption still remain

About Innovate Identity: Innovate Identity is an

✓ Self-sovereign and shared ledger approaches could be used

independent consultancy providing advisory services

across a wide range of relying parties and for a huge variety of

focused on digital trust, data and technology innovation

uses, given the right regulation and commercial models.

within the global online community. Our areas of

✓ Self-sovereign has great potential to reduce the growing regu

expertise include global identity proofing, ‘Midata’,

latory burden, recently created by the consent regimes of GDPR

identity verification, age verification, Know Your

and other personal data regulation.

Customer, anti-money laundering, data privacy, and

✓ The use of shared ledgers can build a unique identity even for

anti-fraud technologies. We improve our client’s global

those with no access to more traditional and formal means of

reach, competitive advantage, return on investment,

identifying themselves.

and we enable sustainable business transformation

X T
 he current deployments often lack interoperability. This reflects

through identity innovation.

the lack of commonly accepted standards and serves to frag
ment the market.

www.innovateidentity.com

X A lack of regulatory certainty creates market uncertainty and a
barrier to adoption, particularly for highly regulated industries
such as financial services.
X Digital identity schemes need both attribute providers and
relying parties within their trust framework, with banks often
playing a part in both roles. Self-sovereign schemes do not start
with a ‘ready-made’ roster of relying parties – and without a

However, as with shared ledger, there needs to be further explo

sufficient level of utility for the end user, digital identity schemes

ration and test deployments. Regulators, in particular, need

of any design are doomed to failure.

to demonstrate their understanding and create a path for innova

? An unanswered question at this stage is whether a significant

tion to flow to the market. Industry ‘sandboxes’, such as that

number of individuals actually want (or even have the capacity)

introduced by the UK Financial Conduct Authority, are a positive

to manage their personal data themselves. The future of self-

development, somewhat de-risking the testing of new solutions.

sovereign identity solutions depends on the appetite and

They also allow regulators to consider new approaches in

adoption of users.

practice, how they might be appropriately regulated, and the
potential need for new industry standards.

What next?
It is too early to reasonably predict the future success or otherwise

While in practice neither self-sovereign nor shared ledgers provide

of the self-sovereign approach. However, the principles it places

a general panacea for identity, both approaches have hugely

at the heart of the approach – recording consent and what trans

exciting potential, particularly when combined. But, ultimately,

actions take place, enabling the individual’s control over their

only the identity market will decide if they will achieve the

personal data, empowering the individual to call forth their own

widespread adoption needed to deliver on their undoubted

identity attributes – accurately reflect digital identity challenges

promise.

today.

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The Regulatory Space

DALIR
A Brief Summary of EBA Guidelines on Fraud Reporting Under the PSD2

About Irena Dajkovic : Dr Irena Dajkovic is a lawyer with a combination of about twenty years of private
practice and in-house experience in commercial, corporate, and regulatory laws. Over the years, her clients
ranged from financial institutions, private equity firms, retail companies to private individuals. She focuses
on clients’ goals and has often been praised by them for her excellent technical skills, strategic advice, and
high ethical standards.

Irena Dajkovic | Partner | DALIR

Article 96 (6) of the revised Payment Services Directive EU

excluding any particular type of PSPs. However, the EBA has

2015/2366 (PSD2) requires Member States of the European

clarified that Account Information Service Providers (AISPs) are

Union to ensure that payment service providers (PSPs) provide,

out of the scope of the fraud reporting requirements. AISPs are

at least on an annual basis, statistical data on fraud relating to

PSPs that simply offer consolidated information on a user’s diffe

different means of payment to their competent authorities. Those

rent payment accounts, and as such cannot report any fraudulent

competent authorities are also required to provide the European

payment transactions data, thus the EBA concluded that including

Banking Authority (EBA) and the European Central Bank (ECB)

them would require changing the scope of the Fraud Guidelines.

with such data in an aggregated form. Based on this, the EBA
had previously drafted Guidelines on Fraud Reporting under the

What must be reported?

PSD2 and had consulted on it earlier in 2017. On 18 July 2018,

In the original draft Guidelines, the EBA proposed to require

EBA issued a report with the final Guidelines on Fraud Reporting

reporting under three broad categories: “unauthorised trans

under the PSD2 (the Fraud Guidelines).

actions”, “manipulation of the payer”, and “payer acting fraudu
lently”. In the final Fraud Guidelines, the EBA narrowed it down

When will the Fraud Guidelines come into force?

to two, and eliminated the “payer acting fraudulently” category,

Data collection is set to begin on 1 January 2019, except for

following a number of complaints from respondents to the draft

required data breakdowns on the usage of exemptions from

Guidelines. The reasoning of the respondents, subsequently

the secure customer authentication (SCA) requirement, for

adopted by the EBA, is that fraudulent payers are completely

which data collection will begin once the Regulatory Technical

outside the control of the PSPs, and data on such fraud is of

Standards on SCA and CSC (the RTS) come into force on 14

limited value to supervisors, because PSPs cannot identify when

September 2019.

the payer itself is acting fraudulently through their transaction risk
monitoring systems. On the other hand, respondents also wanted

Who do the Fraud Guidelines apply to?

the EBA to eliminate the “manipulation of the payer” category, but

The EBA actually developed two sets of guidelines: the first

the EBA decided against this. EBA reasoned that the category is

set is addressed to the PSPs and the second set applies to

important because PSPs have the responsibility to adopt mea

the Member States’ competent authorities (CAs) tasked with

sures to detect where payers are potentially being scammed. ➔

providing the fraud reporting data to the EBA and the ECB.
Article 96 (6) stipulates that PSPs must provide statistical data
on fraud relating to different means of payment, without explicitly

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How must the data be reported?
The aforementioned categories are further divided into data
breakdowns, depending on the type of payment service (e.g.,
direct debit, money remittance or credit transfer), payment
instrument (e.g., e-money or card), and relevant reporting PSP
(whether card-payment transactions are reported by the issuer
or acquirer). Furthermore, although the draft Guidelines posited
the possibility that PSPs would have to provide a breakdown on

About DALIR: DALIR is a boutique law firm whose

a country by country basis, a number of respondents considered

lawyers have a combination of more than 20 years of

this requirement too onerous, and the EBA concluded that there

experience in commercial, regulatory, or corporate laws

was no strong need for country-by-country data. Consequently,

gained in leading UK banks and fintech companies. The

the final Fraud Guidelines only require PSPs to report transaction

firm has a special interest in the fintech industry, and

data according to whether they are domestic, cross-border

particularly payments, developed over many years of

transactions within the EEA, or cross-border transactions outside

client advisory, research, and active participation in the

the EEA.

legal developments in this area.

How often must data be reported?

www.dalir.co.uk

Article 96 (6) requires PSPs to provide the statistical data on fraud
at least annually. In the draft Guidelines, the EBA first proposed
reporting the data sets on a quarterly basis. However, the EBA’s
proposal was subject to criticism by many respondents due to
the administrative burden of quarterly reporting. Taking that into
consideration, the EBA concluded in the final Fraud Guidelines
that the data should be provided on a semi-annual basis instead.
Additionally, the EBA established an exception to the rule for
small payment institutions and e-money institutions, who would

While companies must conduct quarterly monitoring under Article

only have to provide the data on an annual basis with a semi-

21, their reporting duty under the Fraud Guidelines is semi-annual.

annual breakdown.

Furthermore, while Article 21’s data breakdowns are concentrated
on whether the transactions were SCA-exempted or not, and what

The overlap with the fraud monitoring requirement

exemption was used, the final Fraud Guidelines require much

under the RTS on SCA and CSC

more, as we have detailed above. However, undoubtedly, PSPs

In order to make use of the exemptions from conducting secure

will see some overlap in the data categories collected and will be

customer authentication in the RTS, Article 21 of the RTS requires

able to leverage this for their compliance needs.

PSPs to conduct quarterly fraud monitoring, which must be
made available to competent authorities and the EBA at their

Disclaimer: This article does not necessarily deal with every impor

request. Many PSPs questioned what the overlap was between

tant aspect nor cover every detail of the topic it discusses. It is not

this requirement in the RTS and the fraud reporting requirement

designed to provide legal or other advice.

under Article 96 (6). Subsequently, in its June 2018 Opinion on
the Implementation of the RTS, the EBA stated that the fraud
rate calculated under Article 21 would have to include the same
categories of fraud as the Fraud Guidelines (“unauthorised
transactions” and “manipulation of the payer”). Of course, this
does not mean there is total overlap between the two.

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Timelex
Reconciling Consent in PSD2 and GDPR

About Niels Vandezande: Niels Vandezande is a legal consultant at Timelex. He previously worked as
postdoctoral researcher at the KU Leuven Centre for IT & IP Law. Niels specialises in fintech, more
particularly in virtual currencies, electronic money, payment services, and blockchain.

Niels Vandezande | Legal Consultant | Timelex

The Second Payment Services Directive (PSD2) adds third-party

Similarly, according to article 66, a payment initiation service

payment service providers – particularly account information service

provider may only provide its services on explicit consent. Also, they

providers (AISP) and payment initiation service providers (PISP)

may not request any data other than those necessary to provide

– to the EU’s legal framework on payment services. This means

their services, and may not use, access, or store any data for

that traditional payment service providers will need to share

purposes other than for the provision of the service as explicitly

certain data with those third-party providers. Much of that data will

requested by the payer.

be very personal in nature and may constitute personal data in the
sense of the EU’s data protection framework set by the General

Article 94 of PSD2 provides the data protection standard of this

Data Protection Regulation (GDPR). This results in friction between

legal framework, considering that payment service providers shall

being required to share personal data and at the same time being

only access, process, and retain personal data necessary for the

required to conduct such sharing under very strict conditions,

provision of their payment services, with the explicit consent of

resulting in a compliance conundrum. Even after the entry into force

the payment service user. Moreover, all personal data processing

of both legal frameworks, several uncertainties remain. In this article,

in the context of PSD2 must be compliant with the EU’s data

we look at one particular matter, namely that of explicit consent,

protection framework, now set by GDPR.

and the guidance provided in this matter by the European Data
Protection Board (EDPB).

Consent under GDPR
Under the EU’s data protection framework, personal data may only

Data sharing under PSD2

be processed under a limited number of lawful grounds (article 6

PSD2’s article 67 provides the rules on access to and use of

GDPR). These include six types of processing:

payment account information in the case of account information

• processing under the data subject’s consent,

services. This article gives payment service users the right to make

• processing necessary for contractual obligations,

use of services, enabling them access to account information.

• processing necessary under statutory obligations,

Account information service providers, however, can only provide

• processing necessary for the protection of the vital interests of

their services based on the payment service user’s explicit consent.
They may only access the information from designated payment
accounts and associated payment transactions, they may not
request sensitive payment data linked to those accounts, and they
may not use, access, or store any data for purposes other than for

the data subject,
• processing necessary for a task performed in the public interest,
and
• p rocessing necessary in the legitimate interests of the data
controller. ➔

performing the service explicitly requested by the user.

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Regarding consent, the GDPR’s article 7 provides that the data
controller must be able to demonstrate that consent was freely
given. Consent for one matter must be distinguishable from
other matters, and consent may be withdrawn at any time. When
processing a child’s information – up to ages between 13 and
16, depending on the Member State – consent must be given
or authorised by the holder of parental responsibility. When
processing special categories of personal data – such as racial

About Timelex: Timelex is a law firm specialised in

origin, political leanings, or health data – consent must be explicit.

fintech, information, and technology law in the broadest
sense, including privacy protection, data, and information

This shows that both GDPR and PSD2 use a notion of consent, or

management, e-business, intellectual property, online

even explicit consent, even though the meanings do not seem to

media, and telecommunications.

perfectly overlap. Moreover, it can be questioned whether explicit
consent is really needed if it can be argued that the processing

www.timelex.eu

of the payer’s personal data by a third-party payment service
provider is necessary for the fulfilment of a contract between
them – i.e. to provide a payment initiation or account information
service. The presence of that lawful ground means that under
GDPR no consent would be needed – as consent is a different
lawful ground – even though PSD2 still requires explicit consent.

EDPB guidance
The EDPB provided some guidance on the matter in July 2018.

consent under PSD2 must be seen as separate and different from
the notion of (explicit) consent under GDPR. Moreover, it allows for

It confirms that third-party payment services provide their services

the processing of personal data to be seen under GDPR’s lawful

based on a contract between them and the payment service user,

ground of contractual necessity, rather than imposing the lawful

in accordance with recital 87 PSD2. This means that for personal

ground of consent in this matter. This makes consent under PSD2

data processing in this relationship under GDPR, the lawful ground

more of a transparency requirement (what data are processed and

of contractual necessity can indeed apply. Contractual clauses –

why), rather than being bound to the stricter requirements of con

distinct from other contractual matters – should then specify the

sent under GDPR.

purposes for which the user’s personal data will be processed,
to which the user should explicitly agree. The explicit consent
mentioned in PSD2 should be seen as an additional requirement,
separate from the requirements following from GDPR. Explicit
consent under PSD2 is, therefore, a contractual consent, and not
a data processing consent.

Conclusion
The EDPB’s guidance is the first assessment of some of the issues
resulting from the interplay between PSD2 and GDPR. While the
guidance is not exhaustive, and some issues certainly remain, it
does provide a welcomed clarification that the notion of explicit

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WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

Payment Counsel
Bitcoin and AML: Regulating the New Mainstream

About Nadja van der Veer: Nadja van der Veer is a payments lawyer with almost 10 years of experience
in the international Payments industry and a legal expert in rules and regulations involving PSD, AML
and CDD, and Card Schemes. As Co-Founder of PaymentCounsel and one of the Managing Partners
of Pytch Ventures, she consults Merchant Acquirers, Payment Services Providers (PSPs/MSPs),
other Fintech companies, and Merchants in their startup phases who want to expand their business
internationally, while mitigating risk.

Nadja van der Veer | Co-Founder | Payment Counsel

Cryptocurrency has been historically involved in a lot of negative

themselves from the criminal use of cryptocurrency) now, in order

news, instigated by government warnings. Governments have

to keep pace with technological innovation, the European

raised concerns relating to its price volatility, anonymity, and its

Commission has put cryptocurrency exchange platforms and

association with the dark web. The European Supervisory Authori

custodian wallet providers into the scope of the EU AML Directive

ties (ESAs) have come up with a whole list of risks, including lack

(5AMLD). Since the 5AMLD refers to virtual currency, we will keep

of exit options and lack of price transparency. However, benefits

this reference, but cryptocurrency has been given many more

to cryptocurrency are also being acknowledged. It can improve

names. The main reasons for the AMLD change are related to

payment efficiency, reduce transaction cost, it is cheaper, faster,

concerns that these exchange platforms have no legal obligation

and more secure. It addresses the needs of the unbanked and it

to identify suspicious activity and that the anonymity aspect of

is irreversible.

virtual currency (VC) allows potential misuse for criminal purposes.

Regulatory attempts

The Commission has chosen a broad application of virtual

The regulatory attempts made worldwide lack a consistent and

currency purposes as being a means of payment, exchange, for

unilateral approach. Some jurisdictions went for a separate

investment purposes, as store-of-value products, or for use in

licens ing system, others chose putting AML obligations on

online casinos. While the definition of VC exchange platforms

cryptocurrency service providers. While others use an existing

is quite obvious and speaks for itself (parties that exchange

licensing system like e-money or class it as a defined asset,

between VC and fiat currency), the definition of custodian

others feel that since cryptocurrencies are not created or con

wallet providers seems still a bit ambiguous and perhaps too

trolled by any central entity, that any applicable financial indus

broad. They are ‘an entity that provides services to safeguard

try regulations are not suitable. It is important to know that if

private cryptographic keys on behalf of their customers, to

regulators choose one of these options they must carefully

hold, store, and transfer virtual currencies.’ Potentially, this has

balance these to ensure that it does not stifle innovation.

the consequence that parties which are not really designed as
wallets but hold private keys may fall under the Directive as well.

Be ready for 5AMLD

And what about multisig key holders, which could be individuals?

While certain crypto exchange platforms have already voluntarily

But they won’t have the capabilities to comply with the Directive

been applying identification and verification of their customers

and they shouldn’t. ➔

in order to fulfil demands of banking partners (or to disassociate

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WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

How would they be able to identify the transaction as being
suspicious? Including parties like this can stifle the development
and innovation ongoing, so this broad definition is not always
supported throughout the industry.
The ambiguous definition is perhaps the result of the European
Commission also not really knowing where the market and tech

About Payment Counsel: PaymentCounsel provides

nology are going to, or – even worse – not really understanding

a breadth of services to companies spanning the

the underlying principles of VC.

payments value chain, including: drafting industry
standard merchant agreements, analysing risk

As all other obliged entities, VC exchange platforms and custodian

and global compliance with payment laws and

wallet providers will need to comply with all AML obligations, from

regulations, negotiating payment partnership and

identification to verification, to ongoing monitoring to suspicious

vendor relationships, and reviewing and negotiating

activity reporting. While the initial draft proposals were setting

agreements. PaymentCounsel will help impact your

licensing requirements to these new obliged entities, this has

speed and competitiveness, accelerate revenue,

now been transformed into a registration condition. The 5AMLD

and manage your global risk, while providing a cost-

must be implemented into national laws by 10 January 2020.

effective solution.

VC exchange platforms will have to watch regulators’ actions
closely as more countries (especially APAC) are adapting their

www.paymentcounsel.com

anti-money laundering regulations to include VC platforms.

Are the concerns real and the measures effective?
The UK House of Commons Twenty-Second Report of
Session 2017-2019 on Crypto-assets also recognised the risk of
cryptocurrencies (according to stakeholders questioned for the

Further concerns about the effectiveness of the changes in com

report, crypto-assets is a more appropriate terminology) acting

bating money laundering and terrorist financing relate to the aim

as a vehicle for money laundering. However, it is interesting to

of the 5AMLD to ensure traceability of VC and to lift anonymity.

note that the UK National Crime Agency in its latest risk assess

However, the Commission also fully acknowledges that a large

ment has determined that the use of cryptocurrency for money

part of the VC environment will remain anonymous because

laundering and terrorist financing is currently low. Cases are

transactions can also take place without exchange platforms or

present, but it is not widespread. Placing this into context, the

custodian wallet providers. We are yet to see if these changes

NCA stated that there are other large-scale areas of the money

will have a true impact.

laundering problem over cryptocurrency. Quite interestingly, HM
Treasury has explained that certain characteristics of crypto

Perhaps the industry doesn’t really need any more regulatory

currency in fact disincentive criminals from using them to launder

changes, but rather requires more focus on collaboration (not only

money: while cryptocurrency is ‘an anonymous way of paying for

between member states but also between obliged entities) and on

illicit activity, there is the fact that you are potentially creating a

how the obligations are to be fulfilled. Regardless, the 5AMLD is

more transparent record of the transaction, which is potentially

there and the changes seem to be welcomed by the industry as

auditable… There are other methods available to them [terrorists],

the lack of regulation would still mean that especially the fiat to

many of which are easier, such as cash couriers”, the House of

crypto conversion and vice versa is vulnerable to criminal activity,

Commons Report continues.

as stated by CryptoUK.

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WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

The Leading evenT

for Digital
trust
technologies
# trustech2018
REGISTER ONLINE
www.trustech-event.com

27 29
Nov.
Palais des Festivals
Cannes France

2018

Fraud Detection, Identity Verification & Online
Authentication – Mapping and Infographic

Fraud Detection, Identity Verification & Online
Authentication – Mapping of Key Players
Anda Kania | Senior Editor | The Paypers
The industry’s spectrum
If we look at the security and fraud issues in the financial and payments sector today, try as one might, the online environment
is still vulnerable, despite the efforts made to combat fraud. This is due, in part, to the growth of digital commerce and digital
banking channels. According to Gemalto’s Breach Level Index, more than 2.5 billion records were stolen or compromised
in 2017, with identity theft as the leading type of data breach. On the same note, the 2018 Global Fraud Trend Analysis
and Review of CMSPI and MAG has revealed that growth in the card payments market and increased CNP transactions
continue to provide fraudsters with opportunities. The fact that fraudsters are digging for new ways of outsmarting the
security systems and protocols is not outstanding, of course; however, it is interesting to see the way they shift focus from
credit card data to account data or the way they combine social engineering skills with technical ones.
Fraud has become an extremely visible challenge for both merchants and banks. A TransUnion study has revealed that
94% of financial services have experienced fraud within the last two years, such as identity theft, synthetic identity fraud or
account takeover. The latter is also giving a hard time to merchants and their customers, along with chargebacks, MOTO
fraud, BOPIS fraud, telecomm fraud and many more. At the same time, the industry players must be disruptive; they need to
find ways to reduce fraud and operational costs, enhance customer experience, meet regulatory needs and be as dynamic
as the market is. With challenger banks and tough competition in all online verticals - from retail, to digital and travel effective fraud management is becoming a competitive advantage.
Hence, solution providers constantly add new capabilities through product improvements, partnerships and acquisitions.
For example, RELX Group has acquired ThreatMetrix to ramp up their risk-based authentication capability. Furthermore,
payment companies integrate fraud capabilities in their solutions, like PayPal did by acquiring Simility, or Emergent
Technology by acquiring Trust Stamp.
In order to create an accurate picture of what the fraud detection, identity verification and online authentication offerings
look like, we have decided to display the key players of the industry together with their main capabilities. Depicting the most
important features of each company is part of our goal of helping merchants, banks, fintechs and payment service providers
to grasp the current market’s opportunities and to use them according to their own needs.
The fraud management section delineates the main relevant features of solutions providers, such as stateless data ingestion
and augmentation (which is the ability to ingest all types of data, structured, unstructured, third party, user as well as device/
behavioural biometrics), supervised and unsupervised ML, intelligence, case management, orchestration layer, adaptive
decisioning and many more. These intelligent and advanced technologies of using advanced data analytics and ML to
identify fraud has been gathering momentum for some time. The whole range of capabilities is designed to address the pain
points that organisations in the payments space are struggling to remove. Payment fraud, account takeover, friendly fraud,
identity theft, CNP fraud, new account fraud and whatnot are a few types of fraud that vendors featured in our mapping can
prevent. ➔

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Fraud Detection, Identity Verification & Online
Authentication – Mapping of Key Players
As regards the digital identity verification, the application of machine learning analytics is essential to making sense of
the data and approaching the challenge of achieving adequate risk and compliance objectives while ensuring a seamless
customer experience across channels. Identity verification is a key component of the Know Your Customer, a process that
financial institutions must conduct when onboarding customers. This includes the deployment of identity management and
authentication techniques. The challenge appears when a bank or other type of financial services body chooses to expand
in another country or another region, which applies different rules of due diligence.
Various sectors such as financial services or ecommerce verticals (e.g. airlines, gaming, retail, etc.) are still dealing with
authentication issues, as they look to provide digital access to locations and services, authorise payments, manage fraud,
and stay compliant with different regulations around the world. For this reason, the online authentication section seeks to
provide information related to biometrics and other authentication means that can assist organisations in achieving their
goals of meeting compliance and the customers’ expectations.
Some of the companies illustrated in the below mapping are offering an integrated package, while others are focusing
on delivering niched solutions. For instance, Feedzai, Kount, Simility, or Featurespace offer services included in all three
categories. We also notice payment services providers, such as Computop or CyberSource, integrating anti-fraud tools within
their platform. There are companies that offer solutions under a single category, like SecureKey, which aims its attention at
digital identity, or Entersekt, which is mostly focused on authentication.
Nevertheless, chances are that all anti-fraud, digital identity verification and authentication capabilities would merge even
more in the upcoming years. Fraud detection, identity verification and online authentication are, of course, not the same
thing, but they have one goal: to protect the businesses and consumers. In different ways, with different strategies, but in
the end, how long it will take to fully intertwine?
Watch this space.

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WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

Fraud Detection, Identity Verification
& Online Authentication – Infographic
Fraud Detection + Authentication + Identity Verification
PSPs

Fraud Detection + Authentication

Authentication +
Identity Verification

Fraud Detection +
Identity Verification

TM

Authentication

Fraud Detection

Specialized Chargeback

Please use the version without the ® mark in
very large or very small applications

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WEB FRAUD PREVENTION & ONLINE AUTHENTICATION MARKET GUIDE 2017-2018 | INFOGRAPHIC

Fraud Detection, Identity Verification & Online
Authentication – Mapping of Key Players
Company

TM

FRAUD DETECTION
Target group
Banks

x

x

Ecommerce/merchants

x

Acquirers/PSPs
Fintech

x

x

x

x

x

x

x

x

x

x

x

x

On-premises

x

x

Cloud-based

x

x

Hybrid

x

x

x

Technology
x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

Methodology
Rule-Based
Machine Learning
Hybrid

x

Data Ingestion
Stateless Data ingestion and
Augmentation

x

x

x

x

x

x

x

x

x

Machine Learning
Supervised learning
Unsupervised learning
Intelligence
Abuse List

x

x

x

x

x

Monitoring

x

x

x

x

x

Address Verification

x

x

Credit Bureau

x

x

Information Sharing Network

x

x

Case management

x

x

Manual review

x

x

x

Orchestration layer

x

x

Adaptive decisioning

x

x

Chargeback management

x

Recovery

x

Guaranteed fraud prevention

x

122

x
x
x

x

x

x

x

WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

x

Fraud Detection, Identity Verification & Online
Authentication – Mapping of Key Players
Company

TM

IDENTITY VERIFICATION
ID verification

x

Identity Document Scanning

x

Video scanning
Personally identifiable information
(PII) Validation

x

x

Derived verification

x

x

Small Transaction verification

x

Email verification

x

Phone verification

x

Social verification

x

Additional checks/compliances

x

Credit check

x

Compliance check

x

x

x

AUTHENTICATION
Behavioural biometrics

x

Session analysis

x

x

x

x

Device-user interaction

x

x

x

x

Physical biometrics
2-D facial recognition

x

Voice

x

Fingerprint scan

x

Iris scan
Other
Device fingerprinting

x

x

x

x

x

Geo-location

x

x

x

x

x

Remote access detection

x

x

x

Mobile app push

x

3-D secure 2.0

x

Hardware token

x

One-time passwords

x

Knowledge-Based Authentication

x

123

x

x

x

x
x

x

x

x

x

x

WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

Fraud Detection, Identity Verification & Online
Authentication – Mapping of Key Players
Company

Customer Reference

Supported Regions

124

TM

Client Integrations:
Mifinity
Gatehub
PaySend
Paymentz
Ontology

Further details for case
studies are/
will be found
here: https://
finance.
arvato.com/
en/financialsolutions/
fraud-detection.html

Further details
for case studies are/will be
found here:
https://www.
biocatch.com/
resources/
case-studies

For more
information
contact our
Sales Director
Graeme.Bullock@ca.com

Fraud management
solution https://
www.cashshield.
com/case-studies/
razer-store/

Global

Global

-

Global

Global

WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

Fraud Detection, Identity Verification & Online
Authentication – Mapping of Key Players
Please use the version without the ® mark in
very large or very small applications

Company

FRAUD DETECTION
Target group
Banks

x

Ecommerce/merchants

x

Acquirers/PSPs

x

x

x

x

x

x

x

x

x

x

x

x

x

x

Fintech
Technology
On-premises

x

Cloud-based

x
x

Hybrid

x

x

x

Methodology
Rule-Based

x

x

Machine Learning

x

x

Hybrid

x

x

x

x

x

x

x

x

x

x

x

x

x

Data Ingestion
Stateless Data ingestion and
Augmentation
Machine Learning
Supervised learning
Unsupervised learning
Intelligence
Abuse List

x

x

x

x

Monitoring

x

x

x

x

Address Verification

x

x

Credit Bureau

x

Information Sharing Network

x

x

x

x

Case management

x

x

x

Manual review

x

x

x

x

x

x

x

x

x

x

Orchestration layer
Adaptive decisioning

x

Chargeback management
Recovery
Guaranteed fraud prevention

125

x

WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

Fraud Detection, Identity Verification & Online
Authentication – Mapping of Key Players
Please use the version without the ® mark in
very large or very small applications

Company

IDENTITY VERIFICATION
ID verification
Identity Document Scanning
Video scanning
Personally identifiable information
(PII) Validation

x

x

Derived verification
Small Transaction verification
Email verification

x

Phone verification
Social verification

x

x

x

x

x

x

x

Additional checks/compliances
Credit check

x

Compliance check
AUTHENTICATION
Behavioural biometrics

x

Session analysis

x

Device-user interaction

x

x

Physical biometrics
2-D facial recognition

x

x

Voice

x

Fingerprint scan

x

x

Iris scan

x

x

Other
Device fingerprinting

x

x

x

Geo-location

x

x

x

Remote access detection

x

x

Mobile app push

x

3-D secure 2.0

x

Hardware token

x

One-time passwords

x

x
x

Knowledge-Based Authentication

126

WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

x
x

x
x
x

x

x
x

Fraud Detection, Identity Verification & Online
Authentication – Mapping of Key Players
Please use the version without the ® mark in
very large or very small applications

Company

Customer Reference

Information
upon request

GHD, Decision
Manager https://
www.youtube.com/
watch?v=F6oi0YAQixc

More information
upon request

OFX, EmailRisk Score:
https://pages.
emailage.
com/rs/099GUT-421/
images/
Emailage_CustomerStory_
OFX_112118.
pdf

Capitec Bank,
push-based,
in-app authentication as one-time
password replacement ;
Investec, pushbased, in-app
authentication as
one-time password replacement,

Supported Regions

Europe
The Americas
China
South-East
Asia

North America
Europe
Middle East
Africa
Asia Pacific
ATAM

US
EMEA
APAC

Global

North America
Europe
Middle East
Africa

127

WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

Fraud Detection, Identity Verification & Online
Authentication – Mapping of Key Players
Company

FRAUD DETECTION
Target group
Banks

x

x

x

Ecommerce/merchants

x

x

x

x

Acquirers/PSPs

x

x

x

x

Fintech

x

x

x

x

x

x

x

x

x
x

Technology
On-premises
Cloud-based

x

x

x

x

Hybrid

x

x

x

x

Rule-Based

x

x

x

x

Machine Learning

x

x

x

x

Hybrid

x

x

x

x

x

x

x

Supervised learning

x

x

x

x

Unsupervised learning

x

x

x

x

Abuse List

x

x

x

x

Monitoring

x

x

x

x

Methodology

Data Ingestion
Stateless Data ingestion and
Augmentation
Machine Learning

Intelligence

Address Verification

x

x

x

x

x

x

x

x

Case management

x

x

x

Manual review

x

x

x

Credit Bureau
Information Sharing Network

x

Orchestration layer

x

Adaptive decisioning

x

Chargeback management

x

Recovery

x

x

x
x

x
x

x

Guaranteed fraud prevention

128

x

WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

Fraud Detection, Identity Verification & Online
Authentication – Mapping of Key Players
Company

IDENTITY VERIFICATION
ID verification
Identity Document Scanning

x

Video scanning
Personally identifiable information
(PII) Validation

x

Derived verification

x

Small Transaction verification

x

x

x

Email verification

x

x

x

Phone verification

x

x

Social verification

x

x

Additional checks/compliances
Credit check

x

Compliance check

x

x

AUTHENTICATION
Behavioural biometrics

x

x

Session analysis

x

x

x

x

Device-user interaction

x

x

x

x

Physical biometrics
2-D facial recognition

x

Voice
Fingerprint scan

x

x

Iris scan
Other
Device fingerprinting

x

x

x

x

Geo-location

x

x

x

x

x

x

x

x

x

x

x

Remote access detection
Mobile app push
3-D secure 2.0

x

Hardware token

x

One-time passwords

x

Knowledge-Based Authentication

x

129

x
x

x

WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

x

Fraud Detection, Identity Verification & Online
Authentication – Mapping of Key Players
Company

Customer Reference

Supported Regions

130

Ethoca Alerts;
EasyJet
Airline

Worldpay,
Machine
learning risk
management
and fraud
prevention
platform

More
information
available
upon request

More information upon
request

Further details for Accertify case studies are/will
be found here: https://
www.accertify.com/en/
resources/#CaseStudies

US
Europe
Middle East
Africa
AsiaPac
India
China
LATAM

US
Europe
Middle East
Africa
AsiaPac
India
China
LATAM

Global

Global

North America
LATAM
Asia Pacific
Europe
Middle East
Africa

WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

Fraud Detection, Identity Verification & Online
Authentication – Mapping of Key Players
Company

FRAUD DETECTION
Target group
Banks

x

x

x

x

x

Ecommerce/merchants

x

x

x

x

x

Acquirers/PSPs

x

x

x

x

x

Fintech

x

x

x

x

x

x

x

x

Technology
On-premises
Cloud-based

x

Hybrid

x

Methodology
Rule-Based

x

x

x

Machine Learning

x

x

x

Hybrid

x

x

x

x

x

x

x

x

x

x

x

Data Ingestion
Stateless Data ingestion and
Augmentation
Machine Learning
Supervised learning

x

Unsupervised learning
Intelligence
Abuse List

x

x

x

x

Monitoring

x

x

x

x

x

x

x

x

x

x

Address Verification
Credit Bureau
Information Sharing Network

x

x

Case management

x

x

Manual review

x

x

x

Orchestration layer

x

x

x

x

x

Adaptive decisioning
Chargeback management
Recovery

x

x
x

Guaranteed fraud prevention

131

WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

x

Fraud Detection, Identity Verification & Online
Authentication – Mapping of Key Players
Company

IDENTITY VERIFICATION
ID verification

x

Identity Document Scanning

x

Video scanning

x

Personally identifiable information
(PII) Validation

x

x

x

Derived verification
Small Transaction verification

x

Email verification

x

x

x

x

Phone verification

x

x

x

x

x

x

Social verification
Additional checks/compliances

x

Credit check

x

Compliance check

x

x

x

AUTHENTICATION
Behavioural biometrics

x

Session analysis
Device-user interaction

x

x

x

x

x

x

x

Physical biometrics
2-D facial recognition

x

Voice
Fingerprint scan

x

Iris scan
Other

x

Device fingerprinting

x

x

x

Geo-location

x

x

x

Remote access detection

x

x

x

Mobile app push

x

x

3-D secure 2.0

x

x

Hardware token
One-time passwords
Knowledge-Based Authentication

132

x

x

x

x

WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

x

Fraud Detection, Identity Verification & Online
Authentication – Mapping of Key Players
Company

Customer Reference

Ikano Bank,
Fraud
Prevention

For more
information,
please get in
touch with
our team
sales@isignthis.com

BodyBuilding.com,
Kount Complete;
Jagex Games Studio,
Kount Complete;
The Vitamin Shoppe,
Kount Complete;
Leatherman, Kount
Complete; JOANN
Fabric and Craft
Stores, Kount
Complete

More information upon
request

Z1 Motorsports,
Personator
World:car2go
Metabank

Supported Regions

US
Europe
Middle East
Africa
AsiaPac
India
China
LATAM

Global

US
Europe
Middle East
Africa
AsiaPac
China
LATAM

Global

Global

133

WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

Fraud Detection, Identity Verification & Online
Authentication – Mapping of Key Players
Company

FRAUD DETECTION
Target group
Banks

x

x

x

Ecommerce/merchants

x

x

x

x

Acquirers/PSPs

x

x

x

x

x

x

x

x

x

Fintech
Technology
On-premises

x

x

Cloud-based

x

x

Hybrid

x

x

x

Methodology
Rule-Based

x

x

x

x

x

Machine Learning

x

x

x

x

x

Hybrid

x

x

x

x

x

Data Ingestion
Stateless Data ingestion and
Augmentation

x

x

Machine Learning
Supervised learning

x

Unsupervised learning

x

x

x

x

x

Intelligence
Abuse List

x

x

Monitoring

x

x

Address Verification

x

Credit Bureau

x

Information Sharing Network

x

x
x
x

Case management
Manual review

x

x
x

Chargeback management
Recovery
Guaranteed fraud prevention

134

x

x

Orchestration layer
Adaptive decisioning

x

WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

x
x

x

x

x

x

x

x

Fraud Detection, Identity Verification & Online
Authentication – Mapping of Key Players
Company

IDENTITY VERIFICATION
ID verification
Identity Document Scanning

x

x

Video scanning

x

x

Personally identifiable information
(PII) Validation

x

x

Derived verification

x

Small Transaction verification

x

Email verification

x

x

Phone verification

x

x

Social verification

x

x

Additional checks/compliances

x

x

Credit check

x

x

Compliance check

x

x

AUTHENTICATION
Behavioural biometrics
Session analysis

x

x

Device-user interaction

x

x

Physical biometrics

x

2-D facial recognition

x

x

Voice

x

x

Fingerprint scan

x

x

Iris scan

x

x

Device fingerprinting

x

x

x

x

Geo-location

x

x

x

x

Remote access detection

x

Mobile app push

x

x

x

3-D secure 2.0

x

Hardware token

x

One-time passwords

x

x

Knowledge-Based Authentication

x

x

x

Other

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WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

Fraud Detection, Identity Verification & Online
Authentication – Mapping of Key Players
Company

Customer Reference

Supported Regions

136

Please see
customer
references
at https://
riskident.
com/en/

For more
information, visit
rsa.com/en-us/
customers

More information upon
request

More information upon
request

Airbnb, Twitter
Wayfair
Yelp!
Jet.com
Remitly
OpenTable
Indeed
Zoosk
Instacart
Everlane
Patreon

Europe
US

Global

Global

Global

Global

WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

Fraud Detection, Identity Verification & Online
Authentication – Mapping of Key Players
Company

FRAUD DETECTION
Target group
Banks

x

x

x

x

Ecommerce/merchants

x

x

x

x

Acquirers/PSPs

x

x

x

x

Fintech

x

x

x

x

On-premises

x

x

x

Cloud-based

x

x

x

Hybrid

x

x

Rule-Based

x

x

Machine Learning

x

x

Hybrid

x

x

Technology
x

Methodology
x
x

x

Data Ingestion
Stateless Data ingestion and
Augmentation

x

x

Machine Learning
Supervised learning

x

Unsupervised learning

x

x

x

x

x

Intelligence

x

Abuse List

x

x

Monitoring

x

x

Address Verification

x

x

x

Credit Bureau

x

x

x

Information Sharing Network

x

x

x

Case management

x

x

x

Manual review

x

x

Orchestration layer

x

x

Adaptive decisioning

x

x

Chargeback management

x

Recovery

x

x

Guaranteed fraud prevention

137

WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

x

x

Fraud Detection, Identity Verification & Online
Authentication – Mapping of Key Players
Company

IDENTITY VERIFICATION
ID verification
Identity Document Scanning

x

x

Video scanning

x

x

x

Personally identifiable information
(PII) Validation

x

x

x

Derived verification

x

Small Transaction verification

x

Email verification

x

x

x

x

Phone verification

x

x

x

x

Social verification

x

x

x

Additional checks/compliances
Credit check

x

x

Compliance check

x

x

x

AUTHENTICATION
Behavioural biometrics

x

Session analysis

x

x

Device-user interaction

x

x

Physical biometrics
2-D facial recognition

x

Voice
Fingerprint scan
Iris scan
Other
Device fingerprinting

x

x

x

Geo-location

x

x

x

Remote access detection

x

x

Mobile app push
3-D secure 2.0

x
x

x

Hardware token
One-time passwords
Knowledge-Based Authentication

138

x
x

x

x

WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

x

Fraud Detection, Identity Verification & Online
Authentication – Mapping of Key Players
Company

Customer Reference

Supported Regions

139

Adaptive Decisioning Platform
Customers and
Case Studies where
applicable: US
Bank, Zions Bank,
OfferUp, Chime,
Jumia, Luisaviaroma

Lloyds,
risk-based
authentication

More information
upon request

Further details
for case studies
can be found
here: https://
www.trulioo.com/
resources/casestudies/

US
Europe
AsiaPac
India
China
LATAM
Africa
Middle East

US
Europe
Middle East Africa
AsiaPac
India
China
LATAM
ANZ

US
UK
Europe
MENA
APAC
India
China
LATAM

Global

WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

Fraud Detection, Identity Verification & Online
Authentication – Mapping of Key Players
Company

FRAUD DETECTION
Target group
Banks

x

x

Ecommerce/merchants

x

x

Acquirers/PSPs

x

x

Fintech

x

x

Technology
On-premises
Cloud-based

x
x

Hybrid

x
x

Methodology
Rule-Based

x

x

Machine Learning

x

Hybrid

x

Data Ingestion
Stateless Data ingestion and
Augmentation

x

Machine Learning
Supervised learning

x

Unsupervised learning
Intelligence
Abuse List

x

x

Monitoring

x

x

Address Verification

x

Credit Bureau

x

x

Information Sharing Network

x

x

Case management

x

x

Manual review

x

x

Orchestration layer

x

Adaptive decisioning
Chargeback management
Recovery
Guaranteed fraud prevention

140

WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

Fraud Detection, Identity Verification & Online
Authentication – Mapping of Key Players
Company

IDENTITY VERIFICATION
ID verification
Identity Document Scanning

x

Video scanning
Personally identifiable information
(PII) Validation

x

x

Derived verification
Small Transaction verification

x

Email verification

x

x

Phone verification

x

x

Social verification
Additional checks/compliances
Credit check

x

Compliance check

x

x

AUTHENTICATION
Behavioural biometrics
Session analysis

x

Device-user interaction

x

Physical biometrics
2-D facial recognition
Voice
Fingerprint scan

x

Iris scan
Other
Device fingerprinting

x

Geo-location

x

Remote access detection
Mobile app push

x

3-D secure 2.0

x

Hardware token
One-time passwords

x

Knowledge-Based Authentication

x

141

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Authentication – Mapping of Key Players
Company

Customer Reference

Supported Regions

142

Wirecard Bank
AG, Worldline SA,
Concardis

More info upon
request

Global with
emphasis on
US
Europe
CIS

India
APAC
MENA
Africa

WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

Visit Our Enhanced Online
Company Profiles Database

All company profiles in the Web Fraud Prevention & Online
Authentication Market Guide are available online in an enhanced
company profiles database, complete with keywords, company
logo and advanced search functionality.

https://webfraud-eidentity.thepaypers.com/

Company Profiles

Company

Fourstop GmbH (4Stop)

View company profile in online database

4Stop solves businesses’ risk models through an all-in-one KYC, compliance, and anti‑fraud
solution. Their technology brings together proprietary real-time anti-fraud technology
with thousands of global data points and hundreds of global KYC data sources, in a
single integration. Resulting in an unrivalled combination to confidently anticipate risk and
make quantifiable decisions to manage regulatory obligations and accelerate business
performance.
Website

https://4stop.com

Keywords for online profile

fraud prevention, payment gateway, risk management, web fraud, detection, KYC,
cybersecurity, regtech, digital identities, compliance, big data

Business model

Software-as-a-Service (SaaS)

Target market

Financial institutions, payment service providers, payment gateways, online communities/
web merchants, cryptocurrency, card issuers, gaming and gambling, money remittance
providers, other online businesses

Contact

sales@4stop.com; info@4stop.com

Geographical presence

Global

Active since

2016

Service provider type

Digital identity service provider/web fraud detection company/technology vendor

Member of industry associations
and or initiatives

FinTech Circle, RegTech Forums

Services
Unique selling points

4Stop leverages its platform to enable merchants to screen for multiple fraud use cases
including payment, loyalty, and social media reputation. Our unique capabilities allow
customers to be efficiently removed from fraud processes, supporting merchant growth.

Core services

Card-not-present (online, IVR, call centre, and mobile) and card-present fraud prevention,
fraud and risk consultancy, customer on boarding and payment transactional validation/
verification/authentication services.

Pricing Model

Pricing is per data source call/transaction and based on volume and complexity, and core
services.

Fraud prevention partners

For more information please contact an account representative at sales@4stop.com or
info@4stop.com

Other services

Account takeover, new account registration, payment fraud prevention, frictionless
authentication and verification, bot detection, professional services, merchant onboarding

Third party connection

Aggregated APIs for KYC validation, verification, and authentication services

Technology: anti-fraud detection tools available
Address verifications services

Yes

CNP transactions

Yes

Card Verification Value (CVV)

Yes

Bin lookup

Yes

Geo-location Checks

Yes

Device Fingerprint

Yes

Payer Authentication

Yes

Velocity Rules – Purchase Limit
Rules

Yes

White list/black list database

Yes

KYC – Know Your Customer

Yes

Credit Rating

Yes

Follow up action

Additional authentication (out of band authentication) and transaction verification capabilities

Other

Profiling (dynamic summarisation and aggregation), account associations, data science,
simulation reports, data market profiles

145

WEB FRAUD PREVENTION & ONLINE AUTHENTICATION MARKET GUIDE 2018-2019 | COMPANY PROFILES

Authentication Context
Online

Yes

Mobile

Yes

ATM

No

POS

No

Call centre

No

other

For more information please contact an account representative at sales@4stop.com or
info@4stop.com

Reference data connectivity
Connectivity to governmental
data

Yes

Other databases

4Stop references hundreds of databases from our partners, which include validation,
verification, and authentication type providers leveraging from the following:
- credit
- government
- commercial
- consumer/social
- utility
- telco
- postal
- proprietary

Fraud management system type
Single-channel fraud prevention
system

Yes

Multi-channel fraud prevention
system

No

Certification
Type

ISO 27001, ISO 9001, TS 101 456, SAS70

Regulation

KYC, anti money laundering (AML), PSD2, MLD 4&5, GDPR

Other quality programmes

Ethical hacking, privacy compliance

Other remarks

For more information please contact an account representative at sales@4stop.com or
info@4stop.com

Clients
Main clients / references

Client Integrations of 4Stop:
- Mifinity – https://4stop.com/media/mifinity-presser.html
- Gatehub – https://4stop.com/media/gatehub-presser.html
- PaySend – https://4stop.com/media/paysend-presser.html
- Paymentz – https://4stop.com/media/paymentz-presser.html
- Ontology – https://4stop.com/media/ontology-presser.html

Future developments

Upcoming product technology enhancements will include: enhancing the current platform
and technology functionality with optimal user experience design, further technology
developments in data analytic reporting output and monitoring capabilities, behaviour
and machine learning, advanced account associations, and on-going KYC data source
aggregation.

146

WEB FRAUD PREVENTION & ONLINE AUTHENTICATION MARKET GUIDE 2018-2019 | COMPANY PROFILES

Thousands Of Global Data Points.

Instantly access the worlds largest KYC / KYB data aggregation via one API,
with real-time anti-fraud technology and intelligence for automated risk controls.

HUNDREDS
OF KYC DATA
SOURCES

AUTOMATED
MERCHANT
UNDERWRITING

FUTURE-PROOF
COMPLIANCE
WORLD-WIDE

MULTI-FACETED
AUTOMATED
RISK ENGINE

REAL-TIME
MONITORING &
INTELLIGENCE

DATA SCIENCE
& GLOBAL
DATA POINTS

Activate in real-time
with cost-saving
cascading logic.

Results in under 7
minutes with ability
to KYC directors.

Stay abreast and
manage on-going
regulatory updates.

Simple rule wizard,
free-form scripting,
endless rules.

Through a single API
enjoy a centralised
view of risk.

Add to your KYC
integrations in a
frictionless manner.

All-In-One Global KYC, Compliance and Anti-Fraud Solution.
© 2018 FourStop GmbH.

4S I Paypers Full-Page Advert-CMYK I V4.5.indd 1

sales@4stop.com I www.4stop.com

All rights reserved.

2018-11-09 1:57 AM

Company

American Express Enterprise

View company profile in online database

Fraud Management Solutions: Accertify & InAuth, Inc
Accertify and InAuth are wholly-owned subsidiaries of American Express. Accertify is a leading
provider of fraud prevention, chargeback management, and payment gateway solutions.
InAuth is a leading digital device intelligence company for today’s evolving digital world.
Both companies help businesses reduce fraud, increase revenue, and enable frictionless
experiences for good customers.
Website

Accertify.com and InAuth.com

Keywords for online profile

device identification, device intelligence, device reputation, risk detection, fraud prevention,
chargeback management, fraud managed services, payment gateway

Business model

Software-as-a-Service (SaaS)

Target market

- online shoppers
- ecommerce/mcommerce
- financial institutions
- payment services providers
- government services
- online communities/web merchants
- gaming and gambling
- ride sharing
- travel and airlines
- healthcare
- other online businesses

Contact

Michael.Lynch@InAuth.com

Geographical presence

North America, LATAM, JAPA, APAC, EMEA

Active since

2008

Service provider type

- digital identity service provider
- technology vendor
- enterprise web fraud detection company

Member of industry associations
and or initiatives

MRC, FIDO, AICPA (SOC), IATA, MAG, Airline Information Organization, and more

Services
Unique selling points

When a customer accesses your mobile app or website, InAuth leverages hundreds of
device attributes to uniquely identify it. InAuth also assesses high-risk indicators that could
indicate a fraud attempt. We help you to know and understand the trustworthiness of every
device interacting within your digital channels. The Accertify fraud management solutions
put you in control to identify and prevent account takeovers, account originations schemes,
and payment fraud.

Core services

Browser and app based device intelligence and risk detection

Pricing Model

Transaction based pricing

Fraud prevention partners

Actimize, AimBrain, Early Warning, Everis, Emailage, Whitepages Pro, and more

Other services

Secure communcation, PSD2 compliance, account takeover, new account opening, payment
fraud prevention, frictionless authentication, bot detection, professional services

Third party connection

For more information please contact Accertify or InAuth

Technology: anti-fraud detection tools available
Address verifications services

Yes

CNP transactions

Yes

Card Verification Value (CVV)

Yes

Bin lookup

Yes

Geo-location Checks

Yes

Device Fingerprint

Yes

Payer Authentication

Yes

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WEB FRAUD PREVENTION & ONLINE AUTHENTICATION MARKET GUIDE 2018-2019 | COMPANY PROFILES

Velocity Rules – Purchase Limit
Rules

Yes

White list/black list database

Yes

KYC – Know Your Customer

Yes

Credit Rating

Yes

Follow up action

Out of band push notification

Other

Bot detection, malware detecton, fraud tool detection, location spoofing detection,
JailBreak/root detection, malicious application detection

Authentication Context
Online

Yes

Mobile

Yes

ATM

Yes

POS

No

Call centre

Yes

other

N/A

Reference data connectivity
Connectivity to governmental
data

No

Other databases

No

Fraud management system type
Single-channel fraud prevention
system

Yes

Multi-channel fraud prevention
system

Yes

Certification
Type

Soc2, GDPR, PCI

Regulation

For more information please contact InAuth or Accertify

Other quality programmes

Penetration testing, privacy compliance

Other remarks

For more information please contact Accertify or InAuth

Clients
Main clients / references

Not disclosed – Contact us for more information

Future developments

Not disclosed – Contact us for more information

149

WEB FRAUD PREVENTION & ONLINE AUTHENTICATION MARKET GUIDE 2018-2019 | COMPANY PROFILES

Company

Arvato Financial Solutions

View company profile in online database

Arvato Financial Solutions provides professional financial services to renowned international
brands as well as respected local businesses – allowing them to leave their credit
management to a professional, so they can focus on what matters most for their business.
Our services center around cash flow in all segments of the customer lifecycle: from identity,
fraud and credit risk management, to payment and financing services and debt collection.
Website

www.finance.arvato.com

Keywords for online profile

fraud management, fraud prevention, behavioural biometrics, ecommerce, mobile banking

Business model

Software-as-a-Service (SaaS), managed services, consulting services, support services, and
decision science

Target market

Ecommerce, finance and payment, telco, IT, media and entertainment

Contact

Dario Artico (dario.artico@arvato.com)

Geographical presence

North America, Latin America, Europe

Active since

1960

Service provider type

Identity, fraud and credit risk management, payment, financing and debt collection services

Member of industry associations
and or initiatives

Merchant Risk Council (MRC)

Services
Unique selling points

The Arvato Financial Solutions team is made up of proven and reliable experts in around
20 countries, including 7,500 IT, analytics, process and legal specialists, dedicated to
revealing the advantages of big data, advanced foresight, predictive analytics and strategic
consultancy. All employees share one common goal: to make client’s credit management run
effortlessly and effectively, enabling optimised financial performance.
Arvato Financial Solutions can give businesses the best possible platform for growth.

Core services

Identity and fraud management, credit risk management, payment and financing services,
debt collection services

Pricing Model

Contact us for current pricing information

Fraud prevention partners

SecuredTouch, Inform

Other services

Information available upon request

Third party connection

Information available upon request

Technology: anti-fraud detection tools available
Address verifications services

Yes

CNP transactions

Yes

Card Verification Value (CVV)

Yes

Bin lookup

Yes

Geo-location Checks

Yes

Device Fingerprint

Yes

Payer Authentication

Yes

Velocity Rules – Purchase Limit
Rules

Yes

White list/black list database

Yes

KYC – Know Your Customer

Yes

Credit Rating

Yes

Follow up action

Manual Order Review

Other

Information available upon request

151

WEB FRAUD PREVENTION & ONLINE AUTHENTICATION MARKET GUIDE 2018-2019 | COMPANY PROFILES

Authentication Context
Online

Yes

Mobile

Yes

ATM

No

POS

Yes

Call centre

Yes

other

Information available upon request

Reference data connectivity
Connectivity to governmental
data

No

Other databases

Yes

Fraud management system type
Single-channel fraud prevention
system

No

Multi-channel fraud prevention
system

Yes

Certification
Type

ISO 27000, ISAE 3402, DataCenter ISO 9001

Regulation

GDPR, Payment Institution License

Other quality programmes

Information available upon request

Other remarks

ISO27001 foundation, int. Auditor ISO27001, Cobit 5 foundation, ITIL V3 (Op/ST/SD/
CSI), Prince2, IT Security Manager (CCI), Technical IT Security specialist (CCI), Quality
Management Officer (German Accreditation Body), Data Protection Officer (CCI), SAP
Foundation, MCP, MCSA, MSCE

Clients
Main clients / references

We work with:
- three of the top five global internet companies
- four of the top 10 global telcos
- the six big UK utility providers
- all German insurance providers.
We work for global renowned brands, as well as for local respected businesses.

Future developments

Contact us for further information

152

WEB FRAUD PREVENTION & ONLINE AUTHENTICATION MARKET GUIDE 2018-2019 | COMPANY PROFILES

Enabling growth – through seamless
and secure financial transactions
Let’s face it:
fraud is an increasing challenge.

What we do, so you can
focus on your core business:

By means of advanced foresight, predictive analytics
and strategic consultancy, we efficiently guide you
through complexity. We replace uncertainty and risk
with structure and trust, so you can focus on what
matters most for your business.
Give your company the best possible platform for
growth with Arvato Financial Solutions. We provide
services in all segments of the customer lifecycle:
from identity, fraud and credit risk management, to
payment, financing and debt collection.

Your advantages:

STOPPING FRAUD
BEFORE IT HAPPENS
THROUGH EARLY
PREVENTION

IDENTIFYING GOOD
USERS AND IMPROVING
THEIR CUSTOMER
EXPERIENCE

Reduced fraud losses
Increased conversion rate
Optimised processes and workflows
Brand protection

Do you have further questions? Please feel free to contact us.
Arvato Financial Solutions – Your backbone for growth.
www.finance.arvato.com

DETECTING ANOMALIES
AND FRAUD
PATTERNS
INTELLIGENTLY

Company

BioCatch
TM

View company profile in online database

BioCatch is a digital identity company that delivers behavioural biometrics, analysing
human-device interactions to protect users and data. Banks, financial institutions and other
enterprises use BioCatch to significantly reduce online fraud and friction costs, and protect
against a variety of cyber threats, without compromising the user experience.

Website

www.biocatch.com

Keywords for online profile

behavioural biometrics, identity proofing, continuous authentication, fraud prevention

Business model

BioCatch leverages behavioural biometrics to track user interactions and responses within
web and mobile applications. This provides banks, ecommerce companies and other
enterprises with a strong value proposition: we can detect the most advanced fraud attacks
and cyber threats with an amazing degree of accuracy. We provide business value in two
primary areas:
- Less Friction: Currently, a high percentage of genuine users fail step-up authentication
in online banking leading to low customer satisfaction and higher call-center/ fraudmanagement operational costs. BioCatch Behavioural Biometrics authenticates over a very
high percentage of genuine sessions thus reducing the number of failed authentication
attempts and associated operational call center costs.
- Less Fraud: Existing security solutions are becoming less effective in distinguishing
between genuine users and fraudsters. BioCatch is able to prevent various types of
fraud such as social engineering schemes and non-human attacks by bots, aggregators,
malware and remote access Trojans.

Target market

BioCatch is currently targeting the following vertical markets: banking, ecommerce, financial
services (e.g. credit bureaus and unions), credit card issuers, insurance, payroll systems,
and mobile device manufacturers.

Contact

Kevin Donovan, VP of Sales, Americas, kevin.donovan@biocatch.com; Richard Perry, VP of
Sales, EMEA, richard.perry@biocatch.com; Oren Kedem, VP of Sales, LATAM

Geographical presence

BioCatch has a strong global presence in all geographic territories. In particular, the US,
EMEA and LATAM.

Active since

2011

Service provider type

BioCatch is a technology vendor that fits two of your categories: Web Fraud Detection
Company. One of our core capabilities is fraud prevention. BioCatch is capable of identifying
sophisticated forms of account takeover through behavioural profiling and threat detection
without impacting the user experience. This is used to either escalate a session or activity
that receives a high score, or alternatively to de-escalate the activity even if other security
or fraud controls suggest it is risky, allowing the customer to reduce friction and operational
costs. BioCatch excels in providing a near-Zero-FP detection of a variety of advanced
attacks: bots, MITB attack, social engineering and RATs (Remote Access).

Member of industry associations
and or initiatives

Biometrics Institute.

Services
Unique selling points

- Technology: BioCatch’s unparalleled patent portfolio drives extremely high accuracy with
minimal false alarms.
- Experience: BioCatch’s solution is widely deployed by leading banks and financial
institutions around the world;
- Expertise: BioCatch is spearheaded by a strong “bench” of experts from various scientific
disciplines.

Core services

BioCatch behavioural biometrics has three primary capabilities that provide great value
to customers: Identity Proofing, Continuous Authentication (through passive behavioural
profiling) and Fraud Prevention. In regards of fraud prevention, BioCatch is able to effectively
combat a variety of threats, such as: malware, bots/aggregators, remote access Trojans and
social engineering.

Pricing Model

BioCatch’s pricing model is based on an annual license and a one-time setup fee on a per
user or transaction basis.

Fraud prevention partners

BioCatch has partnerships with: Microsoft, LexisNexis, Nuance, Experian, Samsung SDS
and Forgerock.

154

WEB FRAUD PREVENTION & ONLINE AUTHENTICATION MARKET GUIDE 2018-2019 | COMPANY PROFILES

Other services

For Identity Proofing BioCatch behavioural biometrics offers a new dimension to fighting
new account fraud. The system distinguishes between a real user and an impostor by
recognizing normal user behaviour and fraudster behaviours, even when no profile exists.
Understanding how criminals behave online, the BioCatch Identity Proofing Module looks at
3 elements to generate a risk score:
Application Fluency: most fraudsters use compromised or synthetic identities to repeatedly
attack a site. These actions show a fluency with the site and the process used to open a
new account.
Navigational Fluency: fraudsters often use advanced computer skills that are rarely seen
among real users. Common examples include keyboard shortcuts and function keys.
Low Data Familiarity: fraudsters exhibit several behavioural traits when they enter in
unfamiliar data.

Third party connection

BioCatch has numerous business partnerships with a wide variety of industry players. Two
prominent examples: Experian
- a leading a consumer credit reporting agency that collects and aggregates information on
over one billion people and businesses and Lexis Nexis
- providing computer-assisted legal research as well as business research and risk
management services. BioCatch has a very strong and ever-growing partnership with
Microsoft
- BioCatch technical operations are supprted by Microsoft Azure.

Technology: anti-fraud detection tools available
Address verifications services

N/A

CNP transactions

N/A

Card Verification Value (CVV)

N/A

Bin lookup

N/A

Geo-location Checks

BioCatch’s geo-location checks capability is based on collecting a large number of network
and device-related parameters for PCs and Mobile devices, such as: IP, IP ASN, IP ISP, IP City,
IP Country, Time Zone and additional factors. All of these are amalgamated to a strong geolocation check. Of course, this is optional – based on the customer’s needs and use case.

Device Fingerprint

BioCatch generates several device prints with different accuracy levels. Those are used
internally to support the device recognition capability. An example of those device prints is
below:
- Most unique – 1:109 – this is typically used to ensure device is not spoofed, but is very
sensitive to changes in the device configuration. However if we see this value again, it
means it has to be the regular user device.
- Medium uniqueness – 1:2,000,000 – this is the “standard” device recognition resolution.
- Fuzzy Uniqueness – 1:10,000 – this may confuse two similar devices as one, but on the
other hand it leverages network information to highly correlate/associate those devices
with the user (e.g. same Wifi being used), so chances of the second device to be used for
fraud is very slim.

Payer Authentication

With Behavioural Biometric Profiling, customers can call on BioCatch at any point during the
session to ascertain the identity of the user (i.e. verifying users with low scores) or detect
very-high-risk account takeover cases in real time (i.e. feeding our high risk scores into
their risk management system). The deliverable is a 0-1000 score, where the score range
is calibrated to the desired alert rate (e.g. 900+ is 0.25% alert rate). Through this advanced
capability, BioCatch is able to continuously authenticate payers during online sessions.

Velocity Rules – Purchase Limit
Rules

N/A

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WEB FRAUD PREVENTION & ONLINE AUTHENTICATION MARKET GUIDE 2018-2019 | COMPANY PROFILES

White list/black list database

The BioCatch system learns not just from the good guys, but also from the bad guys. Using
a robust white/black list database, we train the system for generic criminal patterns. Here
the focus is not on profiling users, but rather on seeing how criminals behave when doing
fraud. The system takes into account behavioural and cognitive analysis, plus additional
information such as device, network, context of the transaction and other factors. The
result is then integrated together with the behavioural profiling score into a single integrated
score. This way we can provide a score for every session, even if the user does not yet
have a mature profile. The system also takes into account individual fraudster behaviour by
consulting with a common repository of known frauds. Not every individual fraudster can be
profiled, but in many cases a specific cybercriminal will have unique traits – the equivalent of
a nasty scar or a recognisable tattoo that makes them easy to spot in a police lineup.

KYC – Know Your Customer

BioCatch supports KYC operations through its identity proofing capability, using application
fluency, navigational fluency and data familiarity. Traditional KYC profiling validates the
information provided by the user, compared to a reliable source (e.g. DMV database).
However, recent data breaches have exposed this data publicly. BioCatch’s identity proofing
capability is able to distinguish between the genuine user providing data and a fraudster
providing the exact same data, through behavioural profiling.

Credit Rating

N/A

Follow up action

BioCatch’s technology is built to support risk-based authentication, by feeding profiling
scores into ther platform rules engines. The platforms usually specify the follow-up actions
on a case by case basis.

Other

Invisible Challenges are patented techniques that introduce subtle tests into the online
session that users subconsciously respond to without sensing any change in their

experience. The response contains behavioural data that is used to distinguish a real user
from an imposter, whether human or non-human (robotic activity, malware, aggregator,
etc.). It is important to note that BioCatch’s team of researchers test each challenge and
its corresponding deviation to determine the threshold at which users notice a change in
experience on the mobile or website. Example: Disappearing Mouse/Challenge: Hide the
cursor. Users search for the cursor/mouse in very different and unique ways. Some use
wide search patterns, others use small ones, some are horizontal while others are diagonal,
and certain users always search counter-clockwise. Sometimes users move on a certain
learning curve and their responses vary according to their location on the curve. All these
can be captured as unique parameters, however, typically this is not practical, because
the time required for the user to provide enough relevant mouse movements to accurately
authenticate themselves is too long. Invisible Challenges unconsciously “forces” the user
to make various mouse movements in a very short time, allowing BioCatch to capture
adequate data from the user in 500 milliseconds, making it useful for detecting anomalies in
user behaviour in near real-time.
Authentication Context
Online

Yes: We support JavaScript integrations with the following browsers: Internet Explorer,
Chrome, Firefox.

Mobile

Yes: We support SDK integrations with iOS and Android.

ATM

N/A

POS

N/A

Call centre

N/A

other

N/A

Reference data connectivity
Connectivity to governmental data

N/A

Other databases

N/A

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WEB FRAUD PREVENTION & ONLINE AUTHENTICATION MARKET GUIDE 2018-2019 | COMPANY PROFILES

Fraud management system type
Single-channel fraud prevention
system

Yes

Multi-channel fraud prevention
system

Cross-Channel Fraud: Many of our customers use BioCatch to detect fraud that begins
or ends in the online channel, but then carried out at a different channel. For example –
a customer in Spain is using the system to detect whether a fraudster illegally accesses
the user online banking account, then goes to the credit cards balance section to copy the
user’s credit card number and expiration date – this can be later used for ecommerce fraud.
The combination of an abnormal behaviour with a risky context (copying information in
the cards balance page) is highly accurate – no false positives. BioCatch has partnerships
with other leading industry vendors that provide complimentary biometric authentication
solution. In this regard, BioCatch’s partnership with Nuance Communications stands out,
as behavioural biometric risk scores are fed into their call center’s fraud systems. This has
been very effective in combating cross-channel fraud.

Certification
Type

SOC 2 Type II: BioCatch complies with highest security standards when it comes to security.
BioCatch is SOC2 Type II[1] (Security and Availability) certified since February 15th 2015
by E&Y. Annual SOC2 reviews are conducted to maintain and comply with highest industry
standards. The audit/report can be provided upon demand

Regulation

BioCatch complies with GDPR, PSD2 and Open Banking initiatives.

Other quality programmes
Other remarks
Clients
Main clients / references

BioCatch is implemented in global tier-1 financial institutions, with more than 5 billion
transaction per month covering more than 50 million users. Detailed Case studies here.
https://www.biocatch.com/resources/case-studies/a-top-5-u.s.-bank-detects-trickbotmalware-attacks-with-biocatchs-behavioral-biometrics-solution
Individual reference details for each bank available on request.

Future developments

In 2018, BioCatch is planning on massive expansion of use cases as the capability of
behavioural biometrics extends beyond the traditional fraud prevention realm into on-device
authentication and new fraud areas; new verticals, to go beyond banking and expanded
partnerhips.

157

WEB FRAUD PREVENTION & ONLINE AUTHENTICATION MARKET GUIDE 2018-2019 | COMPANY PROFILES

Company

CA Technologies

View company profile in online database

CA Technologies, a Broadcom company, is an industry leader in payment and identity fraud
prevention, with friction-free transaction authentication powered by patented artificial
intelligence. As a pioneer in data analytics for online fraud, CA delivers a unique 360-degree
view of transactions for issuers, processors, and merchants, across all payment schemes. Learn
more at ca.com/balance.
Website

www.ca.com

Keywords for online profile

authentication, 3-D Secure 2.0, EMV 3-D Secure, fraud prevention, predictive analytics

Business model

SaaS

Target market (limited list of
markets)

- financial institutions/card issuers

Contact

paymentsecurity@ca.com

Geographical presence

Global

Active since

1997 (initially as Arcot Systems, acquired by CA Technologies in October of 2010)

Service provider type

Technology vendor, card-not-present fraud prevention solutions, 3DS 2.0 provider, EMV 3-D
Secure, strong authentication and risk analytics, identity fraud prevention

Member of industry associations
and initiatives

Merchant Risk Council, US Payments Forum, EMVCo Technical Associate

- acquirers/processors
- ecommerce merchants

Services
Core services

PSD2 compliance, Authentication, 3-D Secure, predictive analytics, risk analytics network,
fraud detection

Other services

For more information contact our Sales Director, Graeme.Bullock@ca.com

Unique selling points

As a pioneer in 3-D Secure and a leader in risk analytics for online fraud—powered by the
largest risk analytics network in the industry—CA Technologies delivers a unique 360º view
of card-not-present transactions that offers real-time authentication for issuers, processors
and merchants, across all payment schemes. Its patented neural network technology
protects everything from ecommerce and online banking to authentication for enterprise
systems.

Pricing

Transaction-based pricing, price bands for number of transactions processed.

Partners

TSYS, First Data, FIS, PSCU

Offering: authentication technology used
PIN

Yes

Password/phrase

Yes

Token

Yes: cryptographically protected soft tokens

Card

N/A

Digital certificates (hosted yes/no)

Yes

Multifactor authentication

Yes

Biometrics:

Yes

Authentication context
Online

Yes

Mobile

Yes

ATM

N/A

Branch/Point of Sale

N/A

Call Centre

Yes

Other

ecommerce payments, online banking and similar enterprise use cases

158

WEB FRAUD PREVENTION & ONLINE AUTHENTICATION MARKET GUIDE 2018-2019 | COMPANY PROFILES

Reference data connectivity
Connectivity to governmental data

For more information contact our Sales Director, Graeme.Bullock@ca.com

Other databases

CA Risk Analytics Network: CA has anonymized data (device ID, geolocation, merchant
transaction type, and more) within its risk analytics customer network. CA Neural Network
models and machine learning techniques use this data to produce a more accurate risk
score to help determine whether a transaction is legitimate or fraudulent. CA Technologies
leverages Neustar geo-location intelligence.

Certification
Type

SSAE 18 SOC 1, Type 2, SSAE 18 SOC 2, Type 2, Visa ACS, PCI-DSS

Regulation

Solution allows customers to comply with the PSD2 SCA regulation

Other quality programs

PCI-DSS compliant

Other remarks

For more information contact our Sales Director, Graeme.Bullock@ca.com

Clients
Main clients / references

For more information contact our Sales Director, Graeme.Bullock@ca.com

Future developments

For more information contact our Sales Director, Graeme.Bullock@ca.com

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WEB FRAUD PREVENTION & ONLINE AUTHENTICATION MARKET GUIDE 2018-2019 | COMPANY PROFILES

Striking
a Balance
Enhance fraud protection
while enabling a frictionless
customer experience.
For nearly 20 years, CA Technologies has led
the way in authentication and fraud prevention,
providing a unique 360º view of card-not-present
transactions. As the world’s largest 3-D Secure
(3DS) provider, we were first to deploy 3DS and the
first to authenticate an EMV® 3DS transaction—
delivering state-of-the-art protection and a
seamless customer experience. Our patented
fraud analytics give issuers, processors, and
merchants the real-time insights they need to
reduce false declines and increase conversions—
all with the strong authentication required to
achieve PSD2 compliance.
To learn more, visit us at ca.com/balance

Industry-Leading Authentication Solutions
CA Payment Security Suite • CA Risk Analytics Network • CA Identity Risk Insight Suite
Copyright © 2018 Broadcom. All rights reserved. The term "Broadcom" refers to Broadcom Inc. and/or its subsidiaries.

Company

CashShield

View company profile in online database

CashShield is a global online fraud management company that helps enterprises manage
their risk from fraudulent payments and accounts. Uniquely powered by high-frequency
trading algorithms combined with real-time pattern recognition and passive behavioural
biometrics, CashShield’s award-winning solution functions without the need for any data
scientists or fraud analysts.
Website

www.cashshield.com

Keywords for online profile

fraud solution, account takeover, authentication, real-time, instant decisions, chargeback
guarantee

Business model

SaaS fraud management solution

Target market

Financial institutions, government services, online communities/web merchants, gaming and
gambling, other online businesses

Contact

enquiries@cashshield.com / +65 6569 3686

Geographical presence

Global (offices in San Francisco, Shanghai, Berlin, Singapore, Jakarta)

Active since

2008

Service provider type

Web fraud detection company

Member of industry associations
and or initiatives

For more information, please contact the company

Services
Unique selling points

CashShield is the world’s first and only full-machine automated solution that functions
without the need for any human involvement. CashShield’s real-time solution provides
instant decisions to accept or reject transactions, logins and/or account creations, ensuring
maximum scalability especially during promotional periods, with 100% chargeback protection
for physical and digital goods.

Core services

Fraud risk management for online transactions and accounts

Pricing Model

% fee of value of transactions

Fraud prevention partners

N/A – all of CashShield’s technology is built in-house

Other services

Fraud analytics

Third party connection

N/A

Technology: anti-fraud detection tools available
Address verifications services

Yes

CNP transactions

Yes

Card Verification Value (CVV)

Yes

Bin lookup

Yes

Geo-location Checks

Yes

Device Fingerprint

Yes

Payer Authentication

Yes

Velocity Rules – Purchase Limit
Rules

No: CashShield does not use hard rules or limits that hampers growth

White list/black list database

Yes

KYC – Know Your Customer

No

Credit Rating

No

Follow up action

Our fully managed service provides real-time decisions: accept or reject. We make
decisions, not predictions.

Other

CashShield’s end-to-end solution provides comprehensive protection at various points of
entries and vulnerabilities, including credit transfer, withdrawals, account creations and
account logins.

161

WEB FRAUD PREVENTION & ONLINE AUTHENTICATION MARKET GUIDE 2018-2019 | COMPANY PROFILES

Authentication Context
Online

Yes

Mobile

Yes

ATM

No

POS

Yes

Call centre

Yes

other

For more information, please contact the company

Reference data connectivity
Connectivity to governmental data

No

Other databases

Yes

Fraud management system type
Single-channel fraud prevention
system

Yes

Multi-channel fraud prevention
system

Yes

Certification
Type

PCI DSS Level 1

Regulation

For more information, please contact the company

Other quality programmes

For more information, please contact the company

Other remarks

For more information, please contact the company

Clients
Main clients / references

Alibaba, Razer, Grab, Yamibuy, Creative Group, Garena (SEA), Scalefast, Voyagin

Future developments

Adding on a suite of solutions to complete our comprehensive end-to-end fraud protection
tailored for enterprises

162

WEB FRAUD PREVENTION & ONLINE AUTHENTICATION MARKET GUIDE 2018-2019 | COMPANY PROFILES

Company

Computop

View company profile in online database

Computop offers local and innovative omnichannel solutions for payment processing and
fraud prevention around the world. For ecommerce, at POS, and on mobile devices, retailers
and service providers can choose from over 250 payment methods. Computop, a global
player with locations in DE, CN, the UK, the US, processes transactions for more than
15,000 retailers annually, with a combined value of USD 31 bln.
Website

www.computop.com

Keywords for online profile

payment, fraud, machine learning, credit card, 3-D Secure, conversion, PSP, payment
processing, ecommerce

Business model

Payment service provider

Target market

- online and stationary retail
- financial institutions
- payment service providers
- online communities/web merchants
- gaming and gambling

Contact

Germany: +49 (951) 98009-22, sales@computop.com
UK: +44 (0) 1932 895735, uk@computop.com
USA: +1 800 701 7806, usa@computop.com
China: +86-152 1432 8818, info@computop-china.cn

Geographical presence

North/Latin America, Europe, Middle East/Africa, Asia/Pacific

Active since

1997

Service provider type

Payment service provider (PSP)

Member of industry associations
and or initiatives

Please contact Computop for more information

Services
Unique selling points

Global omnichannel payment, international card processing and local payment processing,
P2PE-certified POS-terminal solutions, mobile SDK for In-App payments, receivables
management, currency conversion, individual payment forms for all channels, efficient and
customisable fraud prevention with machine learning algorithms, intelligent 3-D Secure
handling, biometric authentication, reduced integration effort through pre-integration with
leading ERP, and ecommerce vendors including: Salesforce CC, hybris, IBM WebSphere,
INTERSHOP, Magento, Oxid eSales, Spryker, SAP, and more, independent industry and
product consultancy

Core services

Complete omnichannel solution for global payment processing (ecommerce, mcommerce,
POS, MOTO) as well as “out of the box” mobile templates; extensive risk management and
fraud protection

Pricing Model

Provided upon request. Contact Computop for more information.

Fraud prevention partners

Computop is connected to arvato infoscore, CEG, creditreform, Crif, Neustar and Schufa to
run address and credit check on customers – whether individuals or companies – in several
European countries. Further partners are Riskident, ACI ReD, Cardinal Commerce, and more.

Other services

FIDO Server for biometric authentication in payments and beyond

Third party connection

Please contact Computop for more information

Technology: anti-fraud detection tools available
Address verifications services

Yes

CNP transactions

Yes

Card Verification Value (CVV)

Yes

Bin lookup

Yes

Geo-location Checks

Yes

Device Fingerprint

Yes

Payer Authentication

Yes

164

WEB FRAUD PREVENTION & ONLINE AUTHENTICATION MARKET GUIDE 2018-2019 | COMPANY PROFILES

Velocity Rules – Purchase Limit
Rules

Yes

White list/black list database

Yes

KYC – Know Your Customer

Yes

Credit Rating

Yes

Follow up action

Yes

Other

Please contact Computop for more information

Authentication Context
Online

Yes

Mobile

Yes

ATM

No

POS

Yes

Call centre

Yes

other

Please contact Computop for more information

Reference data connectivity
Connectivity to governmental
data

No

Other databases

Schufa, CRIF, arvato infoscore, Neustar

Fraud management system type
Single-channel fraud prevention
system

Yes

Multi-channel fraud prevention
system

Yes

Certification
Type

PCI DSS Level 1, PCI P2PE

Regulation

Please contact Computop for more information

Other quality programmes

Please contact Computop for more information

Other remarks

Please contact Computop for more information

Clients
Main clients / references

OTTO group, Sixt, Wargaming, Fossil, illy, Svarowski, CEWE, Rakuten, badoo, TUI

Future developments

Please contact Computop for more information

165

WEB FRAUD PREVENTION & ONLINE AUTHENTICATION MARKET GUIDE 2018-2019 | COMPANY PROFILES

SMART
AGAINST
FRAUD
Rule Based becomes
Risk Based:
Boost your conversion rate!

computop.com

Company

Covery

View company profile in online database

Covery is a global risk management platform helping online companies solve fraud and
minimise risk. We focus on the universality of our product and its adaptation to any type of
business, based on the individual characteristics and customer needs using both rule-based
and machine learning approaches.

Website

covery.ai

Keywords for online profile

machine learning, fraud prevention, trustchain, customization, risk management, online
fraud, data processing

Business model

SaaS

Target market (limited list of
markets)

Ecommerce, marketplaces, dating, gambling

Contact

sales@covery.ai

Geographical presence

EU

Active since

2016

Service provider type

Risk management, web fraud detection company, tech vendor

Member of industry associations
and initiatives

MRC

Services
Unique selling points

What we offer:
- client data acceptance
- rule-based machine learning
- deep customization
- free trial
- compatible pricing
- functionality to work with loyal users to increase revenue

Core services

Risk management, fraud prevention

Pricing

Pricing is per action, and based on volume and complexity.

Partners

Maxpay

Other services

For more information please contact the company

Offering: authentication technology used
PIN

N/A

Password/phrase

N/A

Token

N/A

Card

N/A

Digital certificates (hosted yes/no)

N/A

Multifactor authentication

N/A

Biometrics

N/A

Authentication context
Online

N/A

Mobile

N/A

ATM

N/A

Branch/Point of Sale

N/A

Call Centre

N/A

Other

N/A

Reference data connectivity
Connectivity to governmental data

Yes

Other databases

Yes

167

WEB FRAUD PREVENTION & ONLINE AUTHENTICATION MARKET GUIDE 2018-2019 | COMPANY PROFILES

Certification
Type

N/A

Regulation

N/A

Other quality programs

N/A

Other remarks

N/A

Clients
Main clients / references

N/A

Future developments

Automated ML helper for risk logic tuning

168

WEB FRAUD PREVENTION & ONLINE AUTHENTICATION MARKET GUIDE 2018-2019 | COMPANY PROFILES

Company

CyberSource Ltd.

View company profile in online database

CyberSource is a global, modular payment management platform built on secure Visa
infrastructure with the benefits and insights of a vast USD 427 billion global processing
network. This solution helps businesses operate with agility and reach their digital
commerce goals by enhancing customer experience, growing revenues, and mitigating risk.
For acquirer partners, CyberSource provides a technology platform, payments expertise,
and support services that help them grow and manage their merchant portfolio to fulfill their
brand promise.
For more information, please visit cybersource.com.
Website

www.cybersource.com

Keywords for online profile

fraud management, risk management, payment security, ecommerce, payments, payment
gateway, account takeover, rules based payer authentication, loyalty fraud

Business model

Software-as-a-Service (SaaS)

Target market

Retail, gaming, FX, financial services, travel, airline, transit, hospitality, insurance, utilities,
telco services, government, digital content, internet service providers, media

Contact

www.cybersource.com/contact_us

Geographical presence

Global

Active since

1994

Service provider type

Payment Service Provider (PSP), fraud management, web fraud detection, device
identification, acquirer partner network, payment management company, payment gateway,
processor

Member of industry associations
and or initiatives

Merchant Risk Council, IMRG, Vendorcom

Services
Unique selling points

CyberSource is a global, modular payment management platform built on secure Visa
infrastructure with the benefits and insights of a vast USD 427 billion global processing
network. This solution helps businesses operate with agility and reach their digital commerce
goals by enhancing customer experience, growing revenues, and mitigating risk.

Core services

CyberSource offers a multi-layered fraud management solution – from account monitoring
to transaction fraud detection, rules tuning to payer authentication – that helps businesses
minimise fraud losses, maximise revenue, and minimise operational costs.

Pricing Model

Tiered SaaS-based pricing model

Fraud prevention partners

ThreatMetrix, Cardinal Commerce, Neustar

Other services

More information available upon request

Third party connection

Neustar, LexisNexis, Whitepages.com, Perseuss, Computer Services, Emailage

Technology: anti-fraud detection tools available
Address verifications services

Yes

CNP transactions

Yes

Card Verification Value (CVV)

Yes

Bin lookup

Yes

Geo-location Checks

Yes

Device Fingerprint

Yes

Payer Authentication

Yes

Velocity Rules – Purchase Limit
Rules

Yes

White list/black list database

Yes

KYC – Know Your Customer

No

Credit Rating

No

Follow up action

Additional authentication (out of band authentication) and transaction verification capabilities

Other

More information available upon request

170

WEB FRAUD PREVENTION & ONLINE AUTHENTICATION MARKET GUIDE 2018-2019 | COMPANY PROFILES

Authentication Context
Online

Yes

Mobile

Yes

ATM

No

POS

No

Call centre

Yes

other

More information available upon request

Reference data connectivity
Connectivity to governmental
data

No

Other databases

Commercial attribute providers, e.g. credit databases

Fraud management system type
Single-channel fraud prevention
system

No

Multi-channel fraud prevention
system

Yes

Certification
Type

More information available upon request

Regulation

More information available upon request

Other quality programmes

More information available upon request

Other remarks

Contact europe@cybersource.com for more information.

Clients
Main clients / references

GAME, GHD, Aeromexico, Turkish Airlines, Cinépolis, Webjet, Backcountry, ESET

Future developments

For more information contact europe@cybersource.com.

171

WEB FRAUD PREVENTION & ONLINE AUTHENTICATION MARKET GUIDE 2018-2019 | COMPANY PROFILES

Powered by machine learning.
Controlled by you.
Win epic battles against fraud using smart machine
learning, combined with flexible rules. CyberSource
Decision Manager combines machine learning with
rules that let you precisely control your online fraud
management strategy.
Half human, half machine – the best of both worlds.
cybersource.co.uk/machinelearning

© 2018 CyberSource Corporation. All rights reserved.

Company

DataVisor

View company profile in online database

DataVisor is a cutting edge fraud detection platform based on machine learning. Using
proprietary unsupervised machine learning algorithms, DataVisor helps restore trust in
digital commerce by helping businesses proactively detect and prevent fraud. Combining
advanced analytics and an intelligence network of more than 4B user accounts globally,
DataVisor protects businesses against financial and reputational damage.
Website

datavisor.com

Keywords for online profile

machine learning, fraud, unsupervised machine learning, unknown fraud, account takeover
fraud, transaction fraud, financial crime, application fraud

Business model

SaaS

Target market (limited list of
markets)

- online shoppers
- financial institutions
- payment service providers
- government services
- online communities/web merchants
- gaming and gambling
- other online businesses

Contact

Priya Rajan

Geographical presence

US, EMEA and APAC

Active since

2014

Service provider type

Technology vendor (other types can be added, if applicable)

Member of industry associations
and initiatives

For more information please contact the company

Services
Core services

Technology solutions for detecting fraud

Other services

Transaction services (offering connectivity to other credential issuers)

Unique selling points

DataVisor uses proprietary unsupervised machine learning algorithms to provide early
detection of emerging fraud patterns without the need of historical loss labels or lengthy
training periods. Since its predictive power is not based on historic labels, DataVisor can
provide early detection with high accuracy even without frequent model re-tuning.

Pricing

For more information please contact the company

Partners

Microsoft, AWS

Offering: authentication technology used
PIN

For more information please contact the company

Password/phrase

For more information please contact the company

Token

For more information please contact the company

Card

For more information please contact the company

Digital certificates (hosted yes/no)

For more information please contact the company

Multifactor authentication

For more information please contact the company

Biometrics:

Face recognition, palm/fingerprint recognition

Authentication context
Online

Yes

Mobile

Yes

ATM

For more information please contact the company

Branch/Point of Sale

For more information please contact the company

Call Centre

For more information please contact the company

Other

For more information please contact the company

173

WEB FRAUD PREVENTION & ONLINE AUTHENTICATION MARKET GUIDE 2018-2019 | COMPANY PROFILES

Reference data connectivity
Connectivity to governmental
data

Citizens register, company register, IDs

Other databases

Commercial attribute providers, credit databases

Certification
Type

ISO 27001, ISO 9001, TS 101 456, SAS70

Regulation

KYC

Other quality programs

Ethical hacking, privacy compliance

Other remarks

For more information please contact the company

Clients
Main clients / references

For more information please contact the company

Future developments

For more information please contact the company

174

WEB FRAUD PREVENTION & ONLINE AUTHENTICATION MARKET GUIDE 2018-2019 | COMPANY PROFILES

DISCOVER
THE UNKNOWN
Unsupervised Machine
Learning for Fraud Prevention
No Historic Labels

No Lengthy Training Periods

AI-Based
Fraud Detection
for the Digital Era

No Frequent Retuning

APPLICATION FRAUD
ACCOUNT TAKEOVERS
ANTI-MONEY LAUNDERING
TRANSACTION FRAUD

DataVisor Enterprise
Comprehensive AI Fraud
Detection Platform

www.datavisor.com

Company

Emailage

View company profile in online database

Emailage, founded in 2012 and with offices across the globe, is a leader in helping
companies significantly reduce online fraud. Through key partnerships, proprietary data, and
machine learning technology, Emailage builds a multi-dimensional profile associated with a
customer’s email address and renders a predictive risk score. Customers realise significant
savings from identifying and stopping fraudulent transactions.
Website

www.emailage.com

Keywords for online profile

online fraud prevention, email risk assessment, email address fraud prevention, CNP fraud
prevention, global fraud prevention, transaction risk analysis, predictive fraud risk scoring,
global consortium database

Business model

For more information contact the company

Target market

Ecommerce merchants, payment processors, financial institutions, airlines, OTA, ticketing
brokers, money transfer companies, credit card issuers, marketplace lenders, personal
computer manufacturers, fraud platforms, gaming and gambling, other online businesses

Contact

Contact@emailage.com

Geographical presence

Global

Active since

2012

Service provider type

Online fraud prevention and digital identity intelligence provider

Member of industry associations
and or initiatives

Merchant Risk Council, NORA Network (Australia)

Services
Unique selling points

Since 2012, Emailage has offered fraud risk assessment built around the email address.
The company utilises a predictive risk score based on machine learning algorithms
combined with a cross-industry and cross-sector consortium database. This approach offers
merchants the ability to mitigate fraud with negative signals, while using positive signals to
approve good customers.

Core services

Email address + global network + machine learning algorithms = online predictive fraud risk
score. We provide a secure, frictionless layer of protection that will supercharge your risk
engine. Our predictive online fraud risk scoring uses email address metadata as the core for
transactional risk assessment and identity validation. Our online identity profiles fuse this
data with other elements, such as phone number, address, and customer name. Emailage
helps reduce fraud for hundreds of customers around the world, including 5 of the top 10
global retailers, 3 of the top 5 largest global airlines, the top 3 PC manufacturers, 3 of top 6
credit card issuers, 3 of the top 5 marketplace lenders, the top 4 money transfer providers,
and 3 of the top 5 travel websites. This year to date, Emailage has analysed nearly USD 100
billion in transaction volume and identified over 17 million high-risk transactions.

Pricing Model

Subscription

Fraud prevention partners

Accertify, CyberSource, Experian, Equifax

Other services

N/A

Third party connection

Accertify, CyberSource, Experian, Equifax

Technology: anti-fraud detection tools available
Address verifications services

Along with the email address, the billing and shipping addresses can also be passed to
Emailage for a holistic risk assessment, which will help increase the fraud coverage with a
higher fraud hit rate.

CNP transactions

Yes: Emailage products are designed to be used as a up-front fraud decision for every CNP
transaction where the email address is provided.

Card Verification Value (CVV)

N/A

Bin lookup

Yes

Geo-location Checks

Yes: for online transactions, Emailage also receives the IP address of the transaction, which
is used for Geo Location Risk Assessment, along with billing and shipping address.

Device Fingerprint

N/A

Payer Authentication

N/A

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Velocity Rules – Purchase Limit
Rules

Yes: Emailage provides velocity controls.

White list/black list database

Yes: cross industry and cross-sector consortium database with intelligence on fraudulent
emails, which is directly used on our risk decision engine and modules, to identify fraud
trends, patterns, and behaviours.

KYC – Know Your Customer

N/A

Credit Rating

N/A

Follow up action

Additional authentication (out of band authentication) and transaction verification capabilities

Other

Emailage provides merchants the ability to verify the digital identity of the consumers for
every transaction, making it harder for fraudsters to penetrate. So instead of the basic
transaction risk assessment, email risk assessment can verify who is behind each online
transaction, providing a holistic risk assessment and adding stronger controls against
fraudsters while helping to approve good customers. This approach can prevent mass
attacks and reduce the ability of fraudsters to scale.

Authentication Context
Online

Yes: Emailage products are designed to be used as an up-front fraud decisioning for online
transactions, they can add value every time an email address is provided on a transaction.

Mobile

N/A

ATM

N/A

POS

N/A

Call centre

N/A

other

N/A

Reference data connectivity
Connectivity to governmental
data

N/A

Other databases

Social Media Data, IP Address Geolocation & Proxy Information, Domain Attributes and
Phone Ownership & Carrier Data

Fraud management system type
Single-channel fraud prevention
system

No

Multi-channel fraud prevention
system

Yes

Certification
Type

AICPA SOC 2, The EU-US and Swiss-US Privacy Shield Framework, International
Association of Privacy Professionals

Regulation

N/A

Other quality programmes

N/A

Other remarks

Add other certifications

Clients
Main clients / references

For more information contact the company.

Future developments

- digital identity verification
- address demographics
- real-time risk profiling
- Single Sign On (SSO)
- deep learning framework
- enhance unsupervised learning for anomaly detection
- deploy cost-sensitive machine learning model
- Portal 3.0, new dashboards and user experience

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WEB FRAUD PREVENTION & ONLINE AUTHENTICATION MARKET GUIDE 2018-2019 | COMPANY PROFILES

Please use the version without the ® mark in
very large or very small applications

Company

Entersekt

View company profile in online database

Entersekt is an innovator of mobile-first fintech solutions. Financial services providers
and other enterprises rely on its patented mobile identity system to provide both security
and the best in convenient new digital experiences to their customers, irrespective of the
service channel.
Website

www.entersekt.com

Keywords for online profile

mobile app security, push-based, phone-as-a-token multi-factor authentication, 3-D Secure,
mobile payments, biometrics, digital transaction signing, mobile banking, online banking

Business model

Direct and through partners

Target market

Financial institutions, card issuers, insurers, payment service providers

Contact

Entersekt sales team: sales@entersekt.com

Geographical presence

Africa, Europe, Middle East, North America

Active since

2008

Service provider type

Digital identity service provider

Member of industry associations
and initiatives

Emerging Payments Association, FIDO Alliance, Mobey Forum, WASPA

Services
Core services

Mobile-app–based, multi-factor authentication and transaction signing of online banking,
mobile banking, and card-not-present payments; secure biometrics enablement; mobile
payments enablement platform

Other services

Non-app-based out-of-band authentication through push USSD

Unique selling points

Entersekt’s patented emCert technology generates public/private key pairs to uniquely
identify enrolled mobile devices and validate two-way communications. A self-contained
cryptographic stack and communications layer enables an end-to-end encrypted channel
distinct from that initiated by the device, so transactions originating from the phone can
still be authenticated out of band on the same device. Highly mature and scalable, the
technology is used by tens of millions of end-users globally.

Pricing model

Per user subscription

Partners

ABCorp, Amazon Web Services, Backbase, CREALOGIX, FIS, Global Kinetic, IBM, IST
Networks, Netcetera

Offering: authentication technology used
Technology used

Industry-standard X.509 digital certificates; proprietary validation techniques developed
specifically for the mobile phone; FIPS 140-2 Level 3 on-premise hardware appliance;
dynamic public key pinning; secure browser pattern; device and application context for
context-based risk scoring; advanced detection of rooting, jailbreaking, or similar mobile
operating system security bypass hacks; secure enablement of fingerprint, voice, iris
biometrics; SIM-swap protection; NI USSD for non-app-based out-of-band authentication

Authentication context
Online

Yes

Mobile

Yes

ATM

Yes

Branch/Point of Sale

Yes

Call Centre

Yes

Other

Card-not-present payments (3-D Secure); email; staff portal; access to healthcare and
insurance records; PSD2 and GDPR mandates and authorizations

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Issuing process (if applicable)
Assurance levels conformity

N/A

Online issuing process (incl lead
time in working days)

Yes: Identity proofing and enrolment processes are set by the implementing institution, but
there is no reason why remote device registration should take more than a few minutes.
Options available for enroling a user include phone-based registration via one-time
password, scanning a printed QR code, and a combination of scanning a bank card and
inputting the associated PIN.

Face-to-face issuing (incl lead
time in working days)

Yes: Identity proofing and enrolment processes are set by the implementing institution, but
there is no reason why in-branch device registration should take more than a few minutes.

Issuing network

Bank branches, online services

Attributes offered
Persons

Level of trust (e.g. biometric data; password or PIN; device context; geolocation and more);
unique mobile device ID; digitally signed authentication message.

Companies
Reference data connectivity
Connectivity to governmental data

Through partners in select countries;

Other databases

Mobile Connect

Certification
Type

Entersekt’s flagship product, Transakt, is FIDO Certified as a U2F (universal second factor)
authenticator. Transakt is also validated with the Ready for IBM Security Intelligence
program. Entersekt’s card-not-present authentication solution is fully accredited by Visa,
Mastercard, and American Express.

Regulation

Entersekt’s solutions are engineered specifically for the heavily regulated financial sector
and adhere to all major digital banking security mandates, including the requirements set
out by the European Central Bank, the FFIEC, and the Monetary Authority of Singapore.
They are compliant with ISO 21188:2006 (Public key infrastructure for financial services) and
utilize hardware security modules certified as FIPS 140-2 Security Level 3 for encrypting and
decrypting all authentication data.

Other quality programs

The underlying technology is regularly validated by independent third parties to ensure it
is invulnerable to new attack vectors. The company’s PSD2-compliant strong customer
authentication solution to has been evaluated and approved by two European payments
security consultancies.

Other remarks
Clients
Main clients / references

Those listed in the public domain: Absa; Bayern Card-Services; Capitec Bank; Coutts;
Discovery; Ecobank; Equifax; Equity Bank; FIS; FirstBank of Colorado; Investec; Nedbank;
Old Mutual; Pluscard; Swisscard. For others, please contact our sales team.

Future developments

For more information, please contact our sales team.

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WEB FRAUD PREVENTION & ONLINE AUTHENTICATION MARKET GUIDE 2018-2019 | COMPANY PROFILES

Company

Ethoca

View company profile in online database

Leveraging a growing, global network of hundreds of card issuers, and thousands of
ecommerce merchants, Ethoca is the leading provider of collaboration-based technology.
Their innovative solutions enable both issuers and merchants to increase card acceptance,
stop fraud, recover lost revenue, and eliminate chargebacks from fraud and customer
service disputes.
Website

www.ethoca.com

Keywords for online profile

collaboration, fraud, chargeback, card-not-present, customer disputes, protect, loss,
ecommerce

Business model

Privately held. Sell direct and through partners.

Target market

Online shoppers, financial institutions, payment services providers, government services,
online communities/web merchants, gaming and gambling, other online businesses

Contact

sales@ethoca.com

Geographical presence

Global (with offices in Toronto, Austin, London, Paris, Melbourne)

Active since

2005

Service provider type

Technology vendor, web fraud detection company, payment service provider (PSP), issuer,
acquirer

Member of industry associations
and or initiatives

MRC, MAG, NRF

Services
Unique selling points

Ethoca’s fraud and dispute intelligence is confirmed by cardholders, allowing merchants to
take immediate action to stop fraudulent orders and eliminate chargebacks. Card issuers
recover losses, and avoid the chargeback process. Ethoca Eliminator connects issuers to
merchant order details to reduce disputes and friendly fraud, and improve the cardholder
experience.

Core services

Ethoca Eliminator, Ethoca Alerts, Enhanced Representments

Pricing Model

More information available upon request.

Fraud prevention partners

Kount, Accertify, CyberSource, FICO, TSYS, Lean Industries, Pega Systems, ACI

Other services

More information available upon request.

Third party connection

More information available upon request.

Technology: anti-fraud detection tools available
Address verifications services

No

CNP transactions

Yes

Card Verification Value (CVV)

No

Bin lookup

No

Geo-location Checks

No

Device Fingerprint

No

Payer Authentication

No

Velocity Rules – Purchase Limit
Rules

No

White list/black list database

No

KYC – Know Your Customer

No

Credit Rating

No

Follow up action

Additional authentication (out of band authentication) and transaction verification capabilities

Other

More information available upon request.

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WEB FRAUD PREVENTION & ONLINE AUTHENTICATION MARKET GUIDE 2018-2019 | COMPANY PROFILES

Authentication Context
Online

Yes

Mobile

Yes

ATM

No

POS

No

Call centre

Yes

other

More information available upon request.

Reference Data connectivity
Connectivity to governmental
data

No

Other databases

Commercial attribute providers, e.g. credit databases

Fraud management system type
Single-channel fraud prevention
system

No

Multi-channel fraud prevention
system

Yes

Certification
Type

PCI. More information available upon request.

Regulation

PCI. More information available upon request.

Other quality programmes

More information available upon request.

Other remarks

More information available upon request.

Clients
Main clients / references

Our suite of services delivers significant revenue growth and cost saving opportunities to
more than 5400 merchants in over 40 countries and more than 580 card issuers in over
20 countries. Seven of the top ten ecommerce brands, 14 of the top 20 North American card
issuers, and two of the top five UK card issuers rely on Ethoca solutions and the network
that powers them.

Future developments

Additional collaboration based solutions to stop friendly fraud, minimise false declines, and
increase overall acceptance.

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Introducing Ethoca’s
Three lines of defense from genuine fraud, friendly fraud, and disputes

Leveraging the power of the industry's largest global merchantissuer collaboration network, our new multi-layered Integrated
Solution Suite tackles some of the biggest problems in ecommerce
today and gives merchants the unique ability to:

• Eliminate chargebacks from fraud and customer disputes.
• Fight multiple forms of fraud – including friendly fraud.
• Preserve and/or recover revenue lost to fraud, disputes and
chargebacks.
• Increase transaction acceptance and improve the customer
experience.

Contact us today and say goodbye to fraud and chargebacks!

Company

Featurespace

View company profile in online database

Featurespace is the world-leader in adaptive behavioural analytics, and creator of the ARIC
platform – a real-time machine learning software system for fraud management. ARIC
monitors individual behaviours to catch new fraud attacks in real-time, and reduce genuine
transactions declined by 70% – which could save the payments industry USD 16 bln annually.
Website

www.featurespace.com

Keywords for online profile

fraud, machine learning, analytics, customer friction, ARIC, adaptive analytics, real-time

Business model

Licensed software

Target market

Financial institutions, payment services providers, merchant acquirers, gambling and
insurance

Contact

info@featurespace.com

Geographical presence

UK, Europe, USA

Active since

2008

Service provider type

Fraud detection, Technology vendor

Member of industry associations
and or initiatives

Merchant Risk Council, Network on Computational Statistics and Machine Learning

Services
Unique selling points

World-leading Adaptive Behavioural Analytics delivered via the machine learning ARIC
platform. ARIC provides a business with a holistic view of their customers by building
individual statistical profiles for every individual consumers, spotting new fraud as it occurs,
simultaneously reducing genuine transactions declined by over 70%, and improving
operational efficiencies by over 50%.

Core services

Machine learning software platform for managing fraud, risk and compliance

Pricing Model

Licence and support. For more information contact info@featurespace.com

Fraud prevention partners

More information available upon request.

Other services
Third party connection

For more information email info@featurespace.com

Technology: anti-fraud detection tools available
Address verifications services

No

CNP transactions

Yes

Card Verification Value (CVV)

Yes: more details available on request

Bin lookup

Yes: more details available on request

Geo-location Checks

Yes: more details available on request

Device Fingerprint

Yes

Payer Authentication

No

Velocity Rules – Purchase Limit
Rules

Yes

White list/black list database

Yes

KYC – Know Your Customer

Yes: more details available on request

Credit Rating

Yes

Follow up action

ARIC creates alerts with the capability to automate actions ie divert funds, close accounts,
block cards, and more

Other

Machine learning, behavioural analytics, in-session behaviour monitoring, link analysis,
anomaly detection, sandbox functionality, deep learning models, multi-tenancy with white
label UI

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WEB FRAUD PREVENTION & ONLINE AUTHENTICATION MARKET GUIDE 2018-2019 | COMPANY PROFILES

Authentication Context
Online

Yes

Mobile

Yes

ATM

For more information please contact info@featurespace.com

POS

Yes

Call centre

For more information please contact info@featurespace.com

other

More information available upon request.

Reference data connectivity
Connectivity to governmental
data

No

Other databases

In development

Fraud management system type
Single-channel fraud prevention
system

Yes

Multi-channel fraud prevention
system

Yes

Certification
Type

More information available upon request.

Regulation

Regulated ICO under DPA

Other quality programmes

For more information please contact info@featurespace.com

Other remarks

For more information please contact info@featurespace.com

Clients
Main clients / references

TSYS, WorldPay, IATA, Betfair, Danske Bank, Cortis, GoHenry, Clear Bank, MIT

Future developments

More information available upon request.

185

WEB FRAUD PREVENTION & ONLINE AUTHENTICATION MARKET GUIDE 2018-2019 | COMPANY PROFILES

Discover the ARIC™ Fraud Hub

> Stop fraud attacks in real-time and on any device
> Increase revenue – accept more genuine
customers
> Reduce customer friction by over 70%

Find out more:
www.featurespace.com

Featurespace is the world leader
in Adaptive Behavioral Analytics,
delivered via its machine learning
ARIC™ software solution.

Contact us:
info@featurespace.com

Company

Feedzai

View company profile in online database

Feedzai is the market leader in fighting fraud with AI. We’re coding the future of commerce
with today’s most advanced risk management platform powered by big data and machine
learning. Founded and developed by data scientists and aerospace engineers, Feedzai has
one mission: to make banking and commerce safe. The world’s largest banks, processors,
and retailers use Feedzai’s fraud prevention and anti-money laundering products to manage
risk, while improving customer experience.
Website

Feedzai.com

Keywords for online profile

fraud, risk, protect, loss, web fraud, detection, fraud prevention, machine learning, artificial
intelligence, AML

Business model

On-premise, Cloud and Hybrid

Target market

- issuing banks
- acquiring banks
- payment services providers
- merchants

Contact

sales@feedzai.com

Geographical presence

Global

Active since

2011

Service provider type

Technology vendor, web fraud detection company

Member of industry associations

Merchant Risk Council (MRC)

and or initiatives
Services

Unique selling points

Feedzai makes commerce safe for business customers and creates a better experience for
their consumers through artifcially intelligent machine learning. Financial services companies
use Feedzai’s anti-fraud technology to keep commerce moving safely reputation. Our unique
capabilities allow customers to be efficiently removed from fraud processes, supporting
merchant growth.

Core services

Artificial intelligence and machine learning based fraud detection platform for merchants,
acquirers, and issuers.

Pricing Model

For more details contact our sales team at sales@feedzai.com

Fraud prevention partners

More info available upon request

Other services

Account takeover, new account registration, payment fraud prevention, frictionless
authentication, bot detection, professional services

Third party connection

More information available upon request.

Technology: anti-fraud tools
Address verifications services

Yes

CNP transactions

Yes

Card Verification Value (CVV)

No

Bin lookup

Yes

Geo-location Checks

Yes

Device Fingerprint

Yes

Payer Authentication

Yes

Velocity Rules – Purchase Limit
Rules

Yes

White list/black list database:

Yes

KYC – Know Your Customer

Yes

Credit Rating

Yes

Follow up action

Yes

Other

N/A

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WEB FRAUD PREVENTION & ONLINE AUTHENTICATION MARKET GUIDE 2018-2019 | COMPANY PROFILES

Authentication Context
Online

Yes

Mobile

Yes

ATM

Yes

POS

Yes

Call centre

Yes

other

More information available upon request.

Reference Data connectivity
Connectivity to governmental
data

More information available upon request.

Other databases

More information available upon request.

Fraud management system type
Single-channel fraud prevention
system

Yes

Multi-channel fraud prevention
system

Yes

Certification
Type

PCIDSS Level 1

Regulation

Directive 95/46/EC

Other quality programmes

More information available upon request.

Other remarks

More information available upon request.

Clients
Main clients / references

Feedzai services the world’s largest global banks, merchants and processors.
References are available upon request.

Future developments

More information available upon request.

188

WEB FRAUD PREVENTION & ONLINE AUTHENTICATION MARKET GUIDE 2018-2019 | COMPANY PROFILES

FIGHT
FINANCIAL
CRIME WITH
ADVANCED AI

LEVERAGE
HYPERGRANULAR
INSIGHTS

RAPIDLY ITERATE,
EVEN IN
PRODUCTION

OPERATIONALIZE
ALL YOUR
DATA

Process hundreds
of millions of
hypergranular
Segment-of-One™
profiles in real time
across you entire
network

Iterate on
hundreds of
risk models
and instantaneously
deploy them to
production

Ingest huge volumes
of data, in any
format, from any
source, for a 360
degree view of your
fraud exposure

feedzai.com

Company

HID Global

View company profile in online database

HID Global is the leading provider of trusted identity and access solutions for people,
places and things. We enable organizations and enterprises in a variety of industries such
as banking, healthcare, and government to protect digital identities in a connected world
and assess cyber-risk in real-time to deliver trusted transactions while empowering smart
decision-making. Our extensive portfolio offers secure, convenient access to on-line
services and applications and helps organizations to meet growing regulatory requirements
while going beyond just simple compliance.
Website

www.hidglobal.com

Keywords for online profile

Fraud, risk, threat detection, risk based authentication, MFA, adaptive authentication, online
and mobile banking, fraud detection

Business model

Subscription or perpetual licence

Target market (limited list of
markets)

Financial institutions, government, internal security for enterprise, US healthcare

Contact

Olivier Thirion de Briel, othiriondebriel@hidglobal.com

Geographical presence

Global

Active since

1991

Service provider type

Advanced adaptative authentication technology vendor, web fraud detection company

Member of industry associations
and initiatives

FIDO Alliance, OATH
PC/SC Workgroup – https://www.pcscworkgroup.com/members/member-list/
Smart Card Alliance – https://www.securetechalliance.org/alliance-members/2702/
GlobalPlatform – https://www.globalplatform.org/membershipcurrentfull.asp
Open Identity Exchange (OIX) http://oixuk.org/members/
Note OIX also runs OpenID – IdenTrust, part of HID Global, is a general member
UK Finance https://www.ukfinance.org.uk/ – IdenTrust, part of HID Global, is an Associate
Member
Open Banking https://www.openbanking.org.uk/ – IdenTrust is an active participant in the
development of Open Banking standards in the UK
Open Banking Stakeholder Group Membership
PSD2/RTS Implementation
Third Parties
Open Banking Working Group Membership
Customer WG; Information Security WG; Regulatory & Legal WG
Standards WG; Operational Governance Agreement and Services WG

Services
Unique selling points

HID Global empowers banks to create trusted environment for digital transactions along
with frictionless user experience based on push notification with highest security level
thanks to the use of public key cryptography and embedded mobile application security
functionalities.
We deliver advanced adaptive authentication, highly secure and easy to deploy fully
compliant with the PSD2 and Open Banking requirements. The combination of evidencebased threat detection capabilities, anomaly detection and behavioural biometrics
supported by machine learning makes it unique on the market.
Our Professional Services team ensures effective deployment and decrease organization’s
time to market.

Core services

Online and mobile banking protection, strong customer authentication, dynamic linking,
transaction signature, threat and fraud detection, multi factor authentication, behavioural
biometry, facial and fingerprint biometry

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WEB FRAUD PREVENTION & ONLINE AUTHENTICATION MARKET GUIDE 2018-2019 | COMPANY PROFILES

Pricing

Pricing is per user and based on volume and number of protected channel

Partners

Temenos, Thales, Microsoft

Other services

Globally trusted certificate authority, credential management solution for high assurance
needs, physical identity, and access management solution

Offering: authentication technology used
PIN

Yes

Password/phrase

Yes

Token

Yes

Card

Yes

Digital certificates (hosted yes/no)

Yes

Multifactor authentication

Yes

Biometrics

Yes

Authentication context
Online

Yes

Mobile

Yes

ATM

Yes

Branch/Point of Sale

Yes

Call Centre

Yes

Other

Payment channel, internal security use cases

Reference data connectivity
Connectivity to governmental
data

No

Other databases

No

Certification
Type

ANSSI CSPN, FIPS 140-2, ISO 27001, ETA Jan 19

Regulation

Open Banking UK, PSD2, PCI-DSS 3.2, 23 NYCRR 500, GDPR

Other quality programs

For more information contact the company –
Thirion de Briel, Olivier 

Other remarks

For more information contact the company –
Thirion de Briel, Olivier 

Clients
Main clients / references

For more information contact the company –
Thirion de Briel, Olivier 

Future developments

Widening its biometric offering and enhancing threat and fraud detection capabilities.

191

WEB FRAUD PREVENTION & ONLINE AUTHENTICATION MARKET GUIDE 2018-2019 | COMPANY PROFILES

Protect digital
identities and
accurately
assess risk

to empower smart decision-making.

With the increase of online activities it is essential to be able to assess the level of risk when
authenticating digitally. Through data analysis powered by machine learning and artificial intelligence
the level of risk can be assessed and a real-time decision engine will enable organizations to manage
it and define the authentication steps according to the circumstances. This way, they can effectively
protect both employees within the company and their customers.
You’ll call it innovation in authentication. We call it, powering trusted identities.
Powering Trusted Identities

|

Visit us at hidglobal.com/hidrms

© 2018 HID Global Corporation/ASSA ABLOY AB. All rights reserved. HID, HID Global, the HID Blue Brick logo, and the Chain Design are trademarks
or registered trademarks of HID Global or its licensor(s)/supplier(s) in the US and other countries and may not be used without permission.

Company

iovation, a TransUnion company

View company profile in online database

iovation, a TransUnion company, was founded in 2004 to make the Internet a safer place
to conduct business. iovation protects online brands from cybercriminal activity with online
fraud prevention and consumer authentication solutions. Having the world’s largest database
of reputation insights iovation safeguards tens of millions of transactions each day.
Website

www.iovation.com

Keywords for online profile

device identification, device reputation, online fraud prevention, online fraud detection,
mobile fraud, account takeover prevention, device-based authentication, customer
authentication, online reputation, multifactor authentication, device fingerprinting

Business model

SaaS

Target market

Online businesses such as retailers, financial institutions, lenders, prepaid cards, insurers,
social networks and dating sites, logistics, gaming/MMO, gambling operators, online auction
sites, and travel and ticketing companies.

Contact

Connie Gougler, Director of Marketing, connie.gougler@iovation.com, 503-943-6748

Geographical presence

Global: iovation’s business is 51% US and 49% international

Active since

2004

Service provider type

Device intelligence, fraud detection & prevention, customer authentication, multifactor
authentication

Member of industry associations
and or initiatives

Merchant Risk Council, Online Lenders Association

Services
Unique selling points

iovation provides a frictionless, flexible, reliable, real-time SaaS solution for user
authentication and fraud prevention that tells our clients if a customer visiting their site is
authorized for that account and/or is risky based upon specific criteria for evaluating the
transaction or activity. iovation’s global consortium contains the reputations of four billion
devices and 55 million fraud events such as chargebacks, identity theft, account takeovers,
online scams and many more.

Core services

iovation offers fraud prevention, customer authentication, multifactor authentication, and
transaction reputation scoring

Pricing Model

Per transaction fee based on system usage depending on volume, type of transaction, and
length of contract.

Fraud prevention partners

4Stop, ACI Worldwide, Avoka, Dealflo, Entrust Datacard, Equifax, Fischer International,
Fiserv, Playtech, Regily, Scudetto, Synectic Solutions, TransUnion, TruNarrative

Other services

Our clients have access to the Fraud Force Community, an exclusive private B2B network
of the world’s foremost security experts sharing intelligence about cybercrime prevention,
device identification, new threats and other fraud-related topics.

Third party connection

iovation delivers data in XML format and offers real-time APIs, allowing output to be
integrated easily with third-party systems

Technology: anti-fraud detection tools available
Address verifications services

No: While we do not offer AVS services, we capture the IP address and its geolocation of the
device in the transaction. We can flag transactions from ‘blocked’ countries, as well as notify
clients when mismatches occur between the IP address shown by the user’s browser and
the IP address we collect with our Real IP proxy unmasking feature.

CNP transactions

Yes: iovation’s service is primarily used to detect high risk activity at login, account
creation, fund transfer and checkout. In addition, our iovation score helps identity the most
trustworthy customers in our clients’ review queues so that they can take good business
immediately, and offer higher-value promotions to their preferred customers.

Card Verification Value (CVV)

No: This service is handled through our client’s payment processor.

Bin lookup

No: This service is handled through our client’s payment processor.

Geo-location Checks

Yes: iovation’s clients can flag transactions when activity is coming from an unauthorized
country or through a proxy, and they can use our Real IP technology to pinpoint the user’s
actual location.

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WEB FRAUD PREVENTION & ONLINE AUTHENTICATION MARKET GUIDE 2018-2019 | COMPANY PROFILES

Device Fingerprint

Yes: iovation offers a defense-in-depth approach to device recognition, supporting native
and web integrations for mobile, tablet and desktop devices.

Payer Authentication

No: This service is handled through our client’s payment processor.

Device-based Authentication

Yes: iovation’s authentication service allows clients to use their customer’s known devices
to help verify identity. Authentication happens in real-time, behind the scenes, reducing
unnecessary friction.

Velocity Rules – Purchase Limit
Rules

Yes: iovation’s velocity rules flag transactions when thresholds are exceeded. These may
include situations where too many accounts are accessed per device, or too many new
accounts are created within a timeframe. Specific rules include Accounts per Device,
Accounts Created per Device, Countries per Account, Countries per
Device, Transactions per Account, and Transactions per Device. Our service also flags
transaction value thresholds, and other transactional velocities.

White list/black list database

Yes: iovation clients can flag transactions based on custom-built lists. These can be positive
or negative lists. List types include accounts, devices, IP ranges, ISPs, locations and others,
and are easily managed across rule sets.

Device Anomalies

Yes: iovation clients can flag transactions when device settings are anomalous and
indicative of risk. While individual device characteristics may not be proof of risk, certain
characteristics may be worth monitoring, and several in combination with each other may
indicate attempts by the user to evade detection.

Fraud and Abuse Records

Yes: iovation clients can flag transactions that originate from an account or device already
associated with fraud or abuse. Previous fraud or abuse is recorded in our system as
evidence. The customer sets the types of evidence they want to consider, and decides
whether to leverage only the evidence they log, or consider the evidence of other iovation
subscribers.

KYC – Know Your Customer

No

Credit Rating

No

Follow up action

iovation’s fraud prevention service provides an Allow, Review or Deny result for each
transaction. Clients then decide the best course of action to take in response to these
results. iovation also returns detailed information about the device associated with the
transaction; clients can store this data and correlate it back to identity management and
other systems as needed.

Authentication Context
Online

Yes

Mobile

Yes: iovation’s mobile SDK for iOS and Android identifies jailbroken or rooted devices, and
captures device location through IP address, network-based geo-location information, and
GPS data. The location services expose mismatches between the reported time zone and
location, long distances between transactions made in short periods of time, and other
location-based anomalies. It also detects transactions originating from virtual machines or
emulators.

ATM

Yes: iovation’s device-based multifactor authentication solution can be used to facilitate the
authentication of a person at an ATM.

POS

Yes: iovation’s device-based multifactor authentication solution can be used to facilitate the
authentication of a person at POS.

Call centre

Yes: iovation’s device-based multifactor authentication solution can be used to facilitate the
authentication of a person contacting a call centre.

Reference data connectivity
Connectivity to governmental data

No

Other databases

Neustar – IP geolocation

Fraud management system type
Single-channel fraud prevention
system

Yes: iovation delivers comprehensive online fraud prevention and customer authentication
for mobile, tablet and PC-based transactions.

Multi-channel fraud prevention
system

Our services focus on online transactions and complement a multi-channel prevention
system.

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Certification
Type

iovation is Privacy Shield certified and is SOC 2 compliant as of April 2, 2018.

Regulation

iovation supports FFIEC compliance by providing device identification and device-based
authentication services.

Other quality programmes

iovation follows strict Quality Assurance processes for new products and services, and
offers Service Level Agreements (SLAs) which include 99.9% uptime as a part of all
customer agreements.

Other remarks

For more information, please contact iovation at info@iovation.com

Clients
Main clients / references

Ikano Bank UK, UMB Bank, NASA Federal Credit Union, 4Finance, Gain Capitol, The AA,
Gocompare, B&H Photo, Bazaarvoice, No Office Walls, and hundreds more.

Future developments

For more information, please contact iovation at info@iovation.com

195

WEB FRAUD PREVENTION & ONLINE AUTHENTICATION MARKET GUIDE 2018-2019 | COMPANY PROFILES

Company

iSignthis

View company profile in online database

iSignthis is a leading e-money, payments, and identity technology company, publicly listed
on the Australian Securities and Frankfurt Stock Exchange (ASX: ISX | FRA: TA8). Through
our patented Paydentity and ISXPay solutions, we enable online businesses to stay on top
of the regulatory curve whilst also optimising their payment cycle, in a safe, comprehensive,
and cost-effective way.
Website

www.isignthis.com

Keywords for online profile

identity verification, authentication, payment gateway, payment processing, card acquiring,
e-money issue and redemption, fraud and risk management

Business model

B2B, transactional

Target market

Online businesses with specific focus on high-risk/AML regulated sector merchants where
(enhanced) Customer Due Diligence KYC is a regulatory requirement. Our solutions are also
utilised by merchants seeking to mitigate fraud and chargebacks.

Contact

contact@isignthis.com

Geographical presence

Global

Active since

2013

Service provider type

E-money, identity verification, and payments technology company

Member of industry associations
and or initiatives

ECSG, EPC, EPSM, OIX

Services
Core services

The company’s core services include: Paydentity, which converges real time processing,
clearing, and settlement with verification of payment instruments, delivering AML/CFT KYC
identification of customers, payments and transaction monitoring simultaneously from
a single platform. iSignthis, trading as ISXPay, also offers merchant card acquiring and
payment services as an EEA authorised e-money Monetary Financial Institution, as well as
transactional banking services including B2B EU based e-money accounts.

Unique selling points

Paydentity combines the verification of the end-user’s identity with the processing of their
payment transaction, to simultaneously satisfy both AML/CFT regulatory requirements whilst
clearing payments on behalf of the merchant. Our unique solution protects both online
customers/cardholders from fraud whilst also protecting merchants against chargebacks.
We deliver compelling evidence to reverse chargebacks and offer CNP liability shift under
the incoming EU’s PSD2.

Pricing Model

Transactional

Fraud prevention partners

N/A

Other services

Find more information about our products by visiting our website or contacting our team,
sales@isignthis.com

Third party connection

Principal of Visa, Mastercard, AMEX, JCB, UnionPay in Europe and Australia, with a number
of partner networks spanning the rest of the world

Technology: anti-fraud detection tools available
Address verifications services

Yes

CNP transactions

Yes

Card Verification Value (CVV)

Yes

Bin lookup

Yes

Geo-location Checks

Yes

Device Fingerprint

Yes

Payer Authentication

Yes

Velocity Rules – Purchase Limit
Rules

Yes

White list/black list database

Yes

KYC – Know Your Customer

Yes

Credit Rating

Yes

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WEB FRAUD PREVENTION & ONLINE AUTHENTICATION MARKET GUIDE 2018-2019 | COMPANY PROFILES

Follow up action

Payment instrument verification, two-factor authentication, mobile OTP

Other

N/A

Authentication Context
Online

Yes

Mobile

Yes

ATM

No

POS

No

Call centre

No

other

N/A

Reference data connectivity
Connectivity to governmental
data

Yes: globally

Other databases

Additional information available upon request

Fraud management system type
Single-channel fraud prevention
system

Yes

Multi-channel fraud prevention
system

Yes

Certification
Type

PCI DSS 1, ISO 27001

Regulation

Licensed/regulated in both Australia and the European Economic Area to process, clear, and
settle payments

Other quality programmes

SWIFT BIC: ISEMCY22, CBC EMI License # 115.1.3.17 (passported to all EEA states)

Other remarks

N/A

Clients
Main clients / references

Top tier high-risk merchants in the financial services, adult, gaming, gambling sectors as well
as a range of money and payment service providers

Future developments

- strengthen our established iSXPay platform by expanding our Tier 1 connections across
geographies and partner networks
- utilise our e-money license in conjunction with our other products to offer additional
transactional banking capabilities to our merchants
- continue our strategic acquisitions like our recent one of Probanx, which currently supplies
core banking software to banks across three continents

197

WEB FRAUD PREVENTION & ONLINE AUTHENTICATION MARKET GUIDE 2018-2019 | COMPANY PROFILES

Company

Kount

View company profile in online database

Kount’s award-winning fraud management, identity verification and online risk detection
technology empowers digital businesses, online merchants and payment service providers
around the world. With Kount, businesses approve more orders, uncover new revenue
streams, and dramatically improve their bottom line all while minimising fraud management
cost and losses. Kount delivers certainty in every digital interaction.
Website

www.kount.com

Keywords for online profile

fraud prevention, account takeover, payment security, ecommerce, AI, machine learning,
merchant network, authentication

Business model

SaaS

Target market

ecommerce, financial institutions, payment services providers, online communities,
web merchants, apparel, automotive, quick serve restuarants, loyalty, digital streaming,
electronics, food/beverage, health/beauty, home/kitchen, gaming/gambling, telecom, travel/
leisure, other online and card not present businesses

Contact

fraudfighter@kount.com

Geographical presence

Worldwide

Active since

2007

Service provider type

SaaS technology vendor, web fraud detection company

Member of industry associations
and or initiatives

Merchant Risk Council, National Retail Federation, CPE Credit Certification by NASBA,
Internet Merchants Retail Group, Global Retail Insights Network.

Services
Unique selling points

Through Kount’s global network and proprietary technologies in AI and machine learning,
combined with policy and rules management, customers thwart online criminals and bad
actors. Kount’s continuously adaptive platform provides certainty for businesses at every
digital interaction.

Core services (Max 20 words)

Kount’s proprietary techniques and patented technology, including: superior mobile fraud
detection, machine learning, feature engineering, multi-layer device fingerprinting, IP proxy
detection and geo-location, transaction and custom scoring, global order linking, business
intelligence reporting, comprehensive order management and professional services

Pricing Model

Tiered SaaS-based pricing model

Fraud prevention partners

- Channel Partners: BlueSnap, Braintree (a PayPal Service), Cayan, Chase, Conekta, Etisalat,
Eway, First Atlantic Commerce, Global Payroll Gateway, J.P. Morgan, LimeLight, MaxiPago,
Moneris, Openpay, PayCertify, Pinpoint Intelligence, Recurly, Sage
- Ecommerce Partners: 3dcart, demandware, Magento, mozu, Pulse Commerce, Xcart

Other services

Chargeback managed services, risk-based authentication, fingerprinting, data orchestration,
quarterly business review, policy/rules management, sales and marketing support (Kount
Central Product), DataMart business intelligence, comprehensive onboarding and ongoing
training support, dedicated client success manager, service support knowlege base.

Third party connection

BehavioSec, Chargebacks 911, Ethoca, LexisNexis, Neustar, TeleSign, WhitepagesPro.

Technology: anti-fraud detection tools available
Address verifications services

Yes

CNP transactions

Yes

Card Verification Value (CVV)

No

Bin lookup

Yes

Geo-location Checks

Yes

Device Fingerprint

Yes

Payer Authentication

No

Velocity Rules – Purchase Limit
Rules

Yes

White list/black list database

Yes

KYC – Know Your Customer

Yes

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WEB FRAUD PREVENTION & ONLINE AUTHENTICATION MARKET GUIDE 2018-2019 | COMPANY PROFILES

Credit Rating

No

Follow up action

Robust APIs and case management to trigger any type of follow up action.

Other

Complete case management, agent management and reporting, mobile SDK for superior
device authentication, mobile app and mcommerce fraud prevention, supervised and
unsupervised machine learning.

Authentication Context
Online

Yes

Mobile

Yes

ATM

No

POS

No

Call centre

Yes

other

In-store kiosk, mail order, omnichannel.

Reference data connectivity
Connectivity to governmental data

No

Other databases

WhitepagesPro, BehavioSec

Fraud management system type
Single-channel fraud prevention
system

Yes

Multi-channel fraud prevention
system

Yes

Certification
Type

PCI Compliance Level 1 Service Provider and Participating Organization, SOC 2 Type II,
Privacy Shield, GDPR.

Regulation

More information available upon request

Other quality programmes

More information available upon request

Other remarks

Contact fraudfighter@kount.com for more information.

Clients
Main clients / references

CD Baby, Crate & Barrel, Domino’s Pizza, Dunkin’ Brands, Hydrobuilder, Jagex, JOANN
Fabric & Crafts, Leatherman, Micro Center, PetSmart, Staples, The Iconic, The Source,
The Vitamin Shoppe, TickPick, WebJet, and more.

Future developments

Kount is continuously delivering net new functionality month after month, contact
fraudfighter@kount.com for more information.

200

WEB FRAUD PREVENTION & ONLINE AUTHENTICATION MARKET GUIDE 2018-2019 | COMPANY PROFILES

Increase Sales
with Better
Fraud Protection
Get back to business and let Kount take fraud
off your hands.
Digital businesses using Kount have the
conﬁdence to grow boldly. How? Kount
aggregates billions of transactions through its
global network, feeding its AI and machine
learning to expose fraud more accurately than
other systems, in milliseconds. Weigh the value
of each customer against potential fraud risk to
maximize conversions with Kount.
Learn more about Kount’s powerful tools for
online retailers at www.kount.com

Boost Sales.
Beat Fraud.

Company

Melissa

View company profile in online database

Melissa is a leading provider of electronic identity verification, entity resolution and global
contact data quality. Since 1985, we’ve helped more than 10,000 organisations worldwide to
achieve and maintain quality data for a single, accurate and reliable customer view. Melissa’s
solutions help companies operate more efficiently, deliver outstanding customer service and
minimise risk.
Website

www.melissa.com

Keywords for online profile

eIDV, KYC, identity verification, contact data, payment, fraud detection

Business model

Real-time API integration and cloud-based

Target market

Card issuers, payment processors, financial institutions, payment services providers,
government services, online communities/web merchants, gaming and gambling, other
online businesses

Contact

sales@melissa.com

Geographical presence

Global

Active since

1985

Service provider type

Web fraud detection company, digital identity service provider and technology vendor

Member of industry associations
and or initiatives

Armed Forces Communications and Electronics Association (AFCEA)

Services
Unique selling points

Real-time integration allows you to verify that your customer is who they say they are in
seconds. Melissa’s services speed up customer onboarding and simplify checkout while
minimising the risk of fraud and helping you stay compliant with industry regulations.

Core services

Cloud-based identity resolution (national ID and age verification, watch list/PEP screening,
contact data validation), location intelligence and consumer insights

Pricing Model

Annual subscription based on volume

Fraud prevention partners

Scannovate

Other services

Optical character recognition (OCR) and data quality solutions that verify, standardise,
update, enrich and dedupe data.

Third party connection

Scanovate

Technology: anti-fraud detection tools available
Address verifications services

Yes

CNP transactions

Yes

Card Verification Value (CVV)

No

Bin lookup

No

Geo-location Checks

Yes

Device Fingerprint

No

Payer Authentication

Yes

Velocity Rules – Purchase Limit
Rules

No

White list/black list database

Yes

KYC – Know Your Customer

Yes

Credit Rating

No

Follow up action

Additional authentication (out of band authentication) and transaction verification capabilities

Other

Person and company authentication for name, address, phone, email, national ID, location,
demographics and IPv4 information

Authentication Context
Online

Yes

Mobile

Yes

ATM

No

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WEB FRAUD PREVENTION & ONLINE AUTHENTICATION MARKET GUIDE 2018-2019 | COMPANY PROFILES

POS

No

Call centre

Yes

other

For more information, please contact the company.

Reference data connectivity
Connectivity to governmental data

International government data sources

Other databases

Credit, consumer, commercial, telco, utility, and other proprietary data sets

Fraud management system type
Single-channel fraud prevention
system

No

Multi-channel fraud prevention
system

Yes

Certification
Type

SOC 2 type II, HIPAA/HITECH, US/EU privacy shield, USPS® CASSTM and Canada Post®
SERP CertifiedTM

Regulation

KYC, anti money laundering (AML), Bank Secrecy Act (BSA)

Other quality programmes

Primary compliance, fraud prevention, watchlist screening/Politically Exposed Persons (PEP)

Other remarks

Melissa operates numerous redundant, distributed server farms across the globe to ensure
99.99% uptime. Beyond the 99.99%, we offer service level agreements (SLAs) for those who
need them. Our RESTful API provides data in both XML and JSON, and features SSL 256‑Bit
Encryption.

Clients
Main clients / references

Bank of America, Citi Bank, US Bank, Discover, Volvo Car Financial Services, Sun Trust,
Meta Bank, car2go

Future developments

For more information, please contact the company.

203

WEB FRAUD PREVENTION & ONLINE AUTHENTICATION MARKET GUIDE 2018-2019 | COMPANY PROFILES

Fight Fraud & Declare Independence from Untrusty Identities
Losing money each year to fraud and compliance costs? Join the fight! Break free from bad contact
data with Melissa. We offer affordable solutions that quickly provide real-time electronic ID
verification – so you know who you’re doing business with, at the time you’re conducting
business – every time.

• Real-time global ID verification
• National ID, age & name-to-address check
• Mobile identity management with OCR
• Demographic & location data enrichments
• PEP & international watch list screening

See how Melissa eIDV solves your specific business needs.
Request a Free Demo.
Melissa.com/revolution
1-800-MELISSA

Company

RISK IDENT

View company profile in online database

RISK IDENT is an anti-fraud software development company based in the US and Europe
that protects companies within the ecommerce, telecommunication, and financial sectors.
RISK IDENT’s machine-learning software uses sophisticated data analytics to block any
kind of fraud, all with human-friendly user interface that simplify a fraud prevention team’s
decision-making process.
Website

www.riskident.com

Keywords for online profile

online fraud prevention, account takeover prevention, device indentification, worlwide device
pool, automatic fraud detection, fraud case processing, credit risk evaluation, mobile SDK

Business model

Direct and through partners

Target market

- online merchants
- financial institutions
- payment services providers
- online communities
- gaming and gambling
- other online businesses

Contact

contact@riskident.com

Geographical presence

Global

Active since

2013

Service provider type

- technology vendor
- fraud detection

Member of industry associations
and or initiatives

Merchant Risk Council

Services
Core services

RISK IDENT battles payment fraud and account takeovers with a collection of highly
developed software products that are easy to integrate. The software applies algorithms
and machine learning on different data feeds to identify fraud risks on a variety of devices.
FRIDA is an intelligent all-in-one solution that analyses transactions using data analytics
and machine-learning. It will continuously adapt to changing fraud patterns. DEVICE IDENT,
a sophisticated device fingerprinting technology on the market, uses efficient rule sets that
calculate a risk score to every device – including a SDK for native mobile applications.

Core services

- fraud detection and credit scoring software
- device fingerprinting services

Pricing Model

Monthly licensing fees (FRIDA)/Per transaction (DEVICE IDENT)

Fraud prevention partners

For more information please contact the company

Other services

For more information please contact the company

Third party connection

Yes

Technology: anti-fraud detection tools available
Address verifications services

Yes

CNP transactions

Yes

Card Verification Value (CVV)

No

Bin lookup

Yes

Geo-location Checks

Yes

Device Fingerprint

Yes

Payer Authentication

No

Velocity Rules – Purchase Limit
Rules

Yes

White list/black list database

Yes

KYC – Know Your Customer

Yes

Credit Rating

Yes

Follow up action

Various

Other

For more information please contact the company

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WEB FRAUD PREVENTION & ONLINE AUTHENTICATION MARKET GUIDE 2018-2019 | COMPANY PROFILES

Authentication Context
Online

Yes

Mobile

Yes

ATM

No

POS

Yes

Call centre

No

other

For more information please contact the company

Reference data connectivity
Connectivity to governmental
data

No

Other databases

Identity and address providers, credit scoring providers

Fraud management system type
Single-channel fraud prevention
system

Yes

Multi-channel fraud prevention
system

Yes

Certification
Type

For more information please contact the company

Regulation

For more information please contact the company

Other quality programmes

For more information please contact the company

Other remarks

Fully EU data privacy compliance

Clients
Main clients / references

Key investor is Otto Group, Europe’s biggest online retailer

Future developments

For more information please contact the company

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WEB FRAUD PREVENTION & ONLINE AUTHENTICATION MARKET GUIDE 2018-2019 | COMPANY PROFILES

DOES FRAUD
AFFECT YOUR
BUSINESS?
Think like a fraudster
and fight the bad guys!

Safeguard your enterprise and your
customers by halting the sophisticated
strategies of fraudsters and minimizing false
positives – both of which boost sales.

We believe every business should have the most up-to-date technology in the fight
against fraud. Stop fraudsters in their tracks and simultaneously create a better
customer experience with RISK IDENT. As global experts with long-term experience
in data science and machine learning, we offer highly efficient anti-fraud solutions
that protect millions of transactions within e-commerce, telecommunications and
financial services – each and every day.
www.riskident.com | contact@riskident.com

Company

RSA

View company profile in online database

RSA, a Dell Technologies business, offers business-driven security to help organisations
manage digital risk and protect what matters most. Award winning cybersecurity solutions
from RSA can detect and respond to advanced attacks, manage user identities and access,
and reduce business risk, fraud, and cybercrime. RSA protects millions of users around the
world and helps more than 90% of Fortune 500 companies thrive in an uncertain, high-risk
world. For more information, go to rsa.com.
Website

www.rsa.com

Keywords for online profile

fraud detection, fraud prevention, consumer authentication, adaptive authentication,
3-D Secure, CNP transactions, account takeover, PSD2

Business model

Direct and partners

Target market

- financial institutions
- payment services providers
- card issuers
- insurance and brokerages
- ecommerce

Contact

https://www.rsa.com/en-us/contact-us
800-995-5095

Geographical presence

North America, Europe, Middle East, Africa, AsiaPac, India, LATAM, Japan

Active since

1982

Service provider type

- technology vendor
- web fraud detection company

Member of industry associations
and or initiatives

FS-ISAC, NACHA, U.S. Payments Forum, NEACH, EMVCo, National Cybersecurity Alliance

Services
Unique selling points

Omnichannel support: organisations can send RSA Adaptive Authentication details of
transactions outside of the traditional web and mobile channels for risk assessment.
Fraud detection rates: achieve 95% fraud detection rate with less than 5% requiring stepup authentication.
The RSA eFraudNetwork: is a global cross-organisational database of confirmed fraud data
gathered from an extensive network of RSA customers, ISPs, and third-party contributors
worldwide. The eFraudNetwork is one of the many factors that contribute to the RSA Risk
Engine in determining fraud risk.
Transaction Signing: RSA Adaptive Authentication offers transaction signing, which can
optionally integrate with biometrics as a stronger means of authentication layered on top of
the payment transaction signature.

Core services

RSA Adaptive Authentication is an advanced, omni-channel fraud detection hub that
provides risk-based, multi-factor authentication for organisations seeking to protect their
consumers from fraud across digital channels. Powered by the RSA Risk Engine, RSA
Adaptive Authentication is designed to measure a user’s login and post-login activities by
evaluating a variety of risk indicators. Using powerful machine learning, in company with
options for fine-grained policy controls, the RSA Adaptive Authentication anti-fraud hub
only requires additional assurance, such as out-of-band authentication, for scenarios that
are high risk and/or violate rules established by an organisation. This methodology provides
transparent authentication for the majority of the users, ensuring a positive user experience.

Pricing Model

RSA Adaptive Authentication can be purchased in an On-Premise or Cloud deployment.
- On-Premise: user-based; supports both Perpetual and Subscription licenses
- Cloud: transaction-based; supports Subscription licenses
- Perpetual user licenses: once the customer pays for them, they are theirs for perpetuity,
no additional payment required ever
- Subscription user licenses: these are paid for a pre-determined time; at the end of that
time, the user must renew their subscription. Maintenance is included.
- Software maintenance: this is tied to the perpetual user licenses. This is a yearly renewable
cost based on the number of user licenses that customer owns. The software maintenance
allows for customer support, upgrades, and access to RSA’s extensive knowledge base.

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Fraud prevention partners

Partners include, but are not limited to: Jack Henry, FiServ, TODO1, ACI, & FIS

Other services

Out of Band SMS/Phone integration partners include Telesign & Authentify

Third party connection

If a customer is interested in integrating data elements from an existing third-party
relationship, they may do so by utilising the ecosystem approach. Through the RSA
Adaptive Authentication ecosystem approach, organisations can use the RSA Risk Engine
to consume external data elements, in addition to RSA’s predefined facts, to calculate a risk
score. By utilising 3rd party facts to influence the risk assessment and impact the risk score,
customers can contribute additional insights from both internal business intelligence and
additional anti-fraud tools.

Technology: anti-fraud detection tools available
Address verifications services

Yes: can facilitate a billing address (AVS) check via RSA Adaptive Authentication for
eCommerce with issuer/processor.

CNP transactions

Yes: only with the issuer/issuing processor side

Card Verification Value (CVV)

Yes: can consume and verify as part of RSA Adaptive Authentication for eCommerce.

Bin lookup

Yes: can verify fraud tied to a BIN or specific card number as part of RSA Adaptive
Authentication for eCommerce.

Geo-location Checks

Yes: part of the RSA Risk Engine in both RSA Adaptive Authentication and RSA Adaptive
Authentication for eCommerce.

Device Fingerprint

Yes: part of the RSA Risk Engine in both RSA Adaptive Authentication and RSA Adaptive
Authentication for eCommerce.

Payer Authentication

Yes: part of RSA Adaptive Authentication for eCommerce (3-D Secure ACS service)

Velocity Rules – Purchase Limit
Rules

Yes: can deploy in rules in both RSA Adaptive Authentication and RSA Adaptive
Authentication for eCommerce.

White list/black list database:

Yes: can facilitate these in both RSA Adaptive Authentication and RSA Adaptive
Authentication for eCommerce.

KYC – Know Your Customer

No

Credit Rating

No

Follow up action

Breadth of Step-up authentication modalities, paired with the flexibility of the MultiCredential Framework:
- biometrics: fingerprint and face ID
- transaction signing
- SMS/Phone call
- push notification
- challenge questions
- knowledge-based authentication (KBA)
- OTP
- email
- multi-credential framework: third-party authentication methods can be integrated via the
RSA Multi-Credential Framework, such as tokens (like RSA SecurID) or card readers

Other

IP address, Known Bad IP, Geo-Velocity, Device Type, cookie, device health assessment (i.e.
RSA Adaptive Authentication RDP Trojan Protection), Device history, User Attributes, User
History, new device check, jailbroken/rooted device

Authentication Context
Online

Yes

Mobile

Yes

ATM

Yes

POS

No

Call centre

Yes

other

IVR, custom IOT channel

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WEB FRAUD PREVENTION & ONLINE AUTHENTICATION MARKET GUIDE 2018-2019 | COMPANY PROFILES

Reference Data connectivity
Connectivity to governmental
data

Not out of the box. However, a customer can integrate a data store via the RSA Adaptive
Authentication “ecosystem approach”, to contribute new data elements in the form of risk
score custom facts.

Other databases

RSA eFraudNetwork. The RSA eFraudNetwork is a global cross-organisational database
of confirmed fraud entities gathered from an extensive network of RSA customers, ISPs,
and third-party contributors worldwide. When fraudulent activity is identified, the data
elements associated with this activity, such as device or payee, are shared via the RSA
eFraudNetwork. When RSA Adaptive Authentication identifies a mule account, an account
used to transfer funds that have been obtained fraudulently, it is flagged as high-risk and
the mule account details are shared through the RSA eFraudNetwork service. The RSA
eFraudNetwork service provides direct feedback to the RSA Risk Engine, so that future
transactions or activities attempted from a device or IP address that appears in the RSA
eFraudNetwork service data repository are classified as high risk.
In addition, through the RSA Adaptive Authentication ecosystem approach, an organisation
can consider the database of their choice, to influence the risk assessment: Through the
RSA Adaptive Authentication ecosystem approach, organisations can use the Risk Engine
to consume data elements, in addition to RSA’s predefined facts, to calculate a risk score.
By utilising third party facts to influence the risk assessment and impact the risk score,
customers can contribute additional insights from both internal business intelligence and
additional anti-fraud tools.

Fraud management system type
Single-channel fraud prevention
system

Yes

Multi-channel fraud prevention
system

Yes

Certification
Type
Regulation

- RSA Adaptive Authentication: GDPR
- RSA Adaptive Authentication for eCommerce: PCI DSS, EMVCo

Other quality programmes

For more information, contact RSA

Other remarks

For more information, contact RSA

Clients
Main clients / references

Financial services, insurance, brokerages, ecommerce, healthcare

Future developments

RSA Forward Looking Statements Notice: concepts presented for consideration only. RSA
makes no representation and undertakes no obligations with regard to product planning
information, anticipated product characteristics, performance specifications, or anticipated
release dates (collectively, “Roadmap Information”). Roadmap Information is provided by
RSA as an accommodation to the recipient solely for purposes of discussion and without
intending to be bound thereby. Copyright 2017 Dell Technologies Corp. All rights reserved.
- Enhanced omnichannel strategy – support for the ingestion of raw data across channels in
addition to enriched data.
- Improved Risk Scoring with deep entity profiling – to create a more accurate profile of
consumers by leveraging insight into consumers online banking and ecommerce activities,
web-session intelligence and recovered compromised data from deep-web sources. The
combined information will ultimately lead to stronger fraud detection rates and lower false
positives.
- eFraudNetwork Global Community Intelligence Sharing Enrichment – community data
sharing platform will be enriched by extending consumers’ behavioural patterns outside
of one single customer and expand the types of data/knowledge that is shared, including
recommendations on policy settings derived from like-sized entities.
- Easing the integration process will lower customers TCO (resources needed to integrate) and
allow easier implementations allowing smaller organisations to perform more self service.
- Automated case/alert handling – to help customers deal with growing caseloads and as a
result, reduce TCO.

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Company

SecureKey Technologies

View company profile in online database

SecureKey is a leading identity and authentication provider that simplifies consumer access
to online services and applications.

Website

www.securekey.com

Keywords for online profile

digital Identity, authentication, blockchain

Business model

Info upon request

Target market

Info upon request

Contact

info@securekey.com

Geographical presence

Global

Active since

2009

Service provider type

Digital identity service providers

Member of industry associations
and initiatives

DIACC, OIX, FIDO, Hyperledger, GPS, IDPro, Kantara

Services
Core services

SecureKey Concierge and Verified.Me

Other services

E.g. transaction services: offering connectivity to other credential issuers

Unique selling points

Verified.Me, by SecureKey Technologies, is a new service to help you verify your identity,

Pricing model

N/A

Partners

See full list here: https://securekey.com/partner-directory/

so you can get things done fast online, in person and on the phone. Verified.Me helps
you verify your identity quickly and securely from any iOS or Android smartphone, using
personal information that you consent to share from your connections. You always stay in
control by choosing when to share your information and with whom, reducing unnecessary
oversharing of personal information in order to access the services you want. The Verified.
Me service is protected with strong security protocols to prevent personal information from
being identified, accessed or misused. Verified.Me uses blockchain technology to securely
and privately transfer your personal information to trusted network participants, giving you
easy access to the services you want, when you want them. Contact us today to learn more
about joining our growing network.

Offering: authentication technology used
Technology used

Info upon request

Authentication context
Online

Yes

Mobile

Yes

ATM

Info upon request

Branch/Point of Sale

Info upon request

Call Centre

Info upon request

Other

Info upon request

212

WEB FRAUD PREVENTION & ONLINE AUTHENTICATION MARKET GUIDE 2018-2019 | COMPANY PROFILES

An ecosystem
approach to
verifying
digital
identity
M

verified by
MyBANK

Where Can I Use It?

Discover participating services and start
accessing them with Verified.Me to make
your life easier!

Learn More

Home

Home

New to Verified.Me? Check out the
Getting Started guide.

Me

Activity

Settings

Verified.Me is the new and secure way to help you verify your
identity, so you can quickly get access to the services and
products you want online, in person and on the phone.1
Visit www.securekey.com/join us to learn more.
Some features are not yet available. | ©SecureKey Technologies Inc. All Rights Reserved.

1

Company

Sedicii

View company profile in online database

In the world of regulated digital services Sedicii delivers robust, efficient, and fast customer
onboarding services in full compliance with the most stringent CDD, KYC, AML, and Data
Privacy obligations. Sedicii’s Zero knowledge proof technology provides state-of-theart capability for real-time identity verification against trusted identity providers that is
completely privacy preserving.
Website

https://sedicii.com/

Keywords for online profile

digital identity, remote onboarding, e-Identity, real-time authentication, AML, KYC, AMLD5,
PSD2, fraud detection

Business model

Subscription-based, transaction-based

Target market

Financially regulated industries: financial institutions, governments, legal and accounting,
retailing/merchants, telco, and more

Contact

contactus@sedicii.com

Geographical presence

Global

Active since

2013

Service provider type

Privacy preserving identity authentication and verification services

Member of industry associations
and initiatives

World Economic Forum, FIDO Alliance

Services
Unique selling points

Sedicii’s streamlined identity authentication and verification network uses advanced ZKP
technology. It enables verification of identity attributes without data being exposed or
exchanged, thereby ensuring that both the privacy of the individual, and the confidentiality
and integrity of the Identity Providers’ data remains intact.

Core services

Secure account creation, robust, secure, real-time KYC/AML/GDPR compliant onboarding
document/information capture, identity proofing, background checks, risk profiling, live
video interview

Pricing Model

Subscription-based, transaction-based

Fraud prevention partners

For more information contact the company

Other services

Identity Verification against Identity Providers connected to the network eliminates data
exposure during the checking process

Offering: authentication technology used
PIN

Yes

Password/phrase

Yes

Token

Yes

Card

N/A

Digital certificates (hosted yes/no)

N/A

Multifactor authentication

Yes

Biometrics

Yes

Authentication context
Online

Yes

Mobile

Yes

ATM

No

Branch/Point of Sale

No

Call Centre

Yes

Other

For more information contact the company

Issuing process (if applicable)
Assurance levels conformity

O Auth 2

Online issuing process (incl lead
time in working days)

Real-time digital onboarding and proofing of digital identities supporting several identity
credentials - liveness checks and image recognition of global ID documents

214

WEB FRAUD PREVENTION & ONLINE AUTHENTICATION MARKET GUIDE 2018-2019 | COMPANY PROFILES

Face-to-face issuing (incl lead
time in working days)

N/A

Issuing network

For more information contact the company

Attributes offered
Persons

Address, age, passport

Companies

For more information contact the company

Reference data connectivity
Connectivity to governmental
data

For more information contact the company

Other databases

Background checking against more than 1,000 global watchlists

Certification
Type

For more information contact the company

Regulation

KYC, AML, PSD2, GDPR

Other quality programs

FIDO Alliance

Other remarks

World Economic Forum Panelist

Clients
Main clients / references

Global banks, utilities, telcos

Future developments

Zero Knowledge Proof high-assurance verification against authoritative sources

215

WEB FRAUD PREVENTION & ONLINE AUTHENTICATION MARKET GUIDE 2018-2019 | COMPANY PROFILES

Company

Sift Science

View company profile in online database

Sift Science is a machine learning company that fuels business growth by empowering worldleading online businesses to drive risk-free user experiences. Sift dynamically prevents fraud
and abuse by combining industry leading technology and expertise, a global data network and
long-term customer partnership. Global brands such as Twitter, Airbnb, Yelp!, Shutterstock,
Jet.com, Indeed and Wayfair rely on the Sift Science Digital Trust Platform for access to a
global network of fraud data, more than 16,000 fraud signals, and its unique ability to detect
and prevent fraud in real time.
Website

www.siftscience.com

Keywords for online profile

fraud prevention, account takeover, content abuse, fraud detection, machine learning,
ecommerce fraud, fraud prevention software, chargebacks

Business model

SaaS

Target market

Ecommerce, financial institutions, payment services providers, online communities,
web merchants, gaming and gambling, travel, on-demand services, online ticketing,
marketplaces

Contact

sales@siftscience.com

Geographical presence

Global

Active since

2011

Service provider type

SaaS technology vendor, web fraud detection company

Member of industry associations

Merchant Risk Council

and or initiatives
Services

Unique selling points

Real-time machine learning, global network, advanced automation

Core services

A suite of products that prevent payment fraud, account takeover, content abuse,
fake accounts, and promo abuse

Pricing Model

Pay as you go with volume discounts based on transaction volume

Fraud prevention partners

Soon

Other services

Account management, integration support

Third party connection

Contact us for more information

Technology: anti-fraud detection tools available
Address verifications services

Yes

CNP transactions

Yes

Card Verification Value (CVV)

Yes

Bin lookup

Yes

Geo-location Checks

Yes

Device Fingerprint

Yes

Payer Authentication

No

Velocity Rules – Purchase Limit
Rules

Yes

White list/black list database

Yes

KYC – Know Your Customer

No

Credit Rating

No

Follow up action

Yes

Other

Yes

216

WEB FRAUD PREVENTION & ONLINE AUTHENTICATION MARKET GUIDE 2018-2019 | COMPANY PROFILES

Authentication Context
Online

Yes

Mobile

Yes

ATM

No

POS

No

Call centre

No

other

No

Reference data connectivity
Connectivity to governmental
data

No

Other databases

Multiple

Fraud management system type
Single-channel fraud prevention
system

No

Multi-channel fraud prevention
system

Yes

Certification
Type

Information Security (SOC 2 Type 2)

Regulation

N/A

Other quality programmes

Contact us for more information

Other remarks

Contact us for more information

Clients
Main clients / references

Airbnb, Twitter, Wayfair, Yelp!, Jet.com, Remitly, OpenTable, Indeed, Zoosk, Instacart,
Everlane, Patreon

Future developments

Expanding products and markets

217

WEB FRAUD PREVENTION & ONLINE AUTHENTICATION MARKET GUIDE 2018-2019 | COMPANY PROFILES

For Sale

Company

Simility, a PayPal Service

View company profile in online database

Simility offers real-time risk and fraud decisioning solutions to protect global businesses.
Simility’s offerings are underpinned by the Adaptive Decisioning Platform, built with a datafirst approach to deliver continuous risk assurance. By combining artificial intelligence
(AI) and big data analytics, Simility helps businesses orchestrate complex decisions
to reduce friction, improve trust, and solve complex fraud problems. Built by industry
veterans, Similty is trusted by some of the world’s leading consumer brands across financial
services, payment processors and commerce merchants. Simility was recently acquired by
PayPal, and will leverge their partnership to continue developing innovative fraud and risk
management solutions for the digital-first economy.
Website

https://simility.com/

Keywords for online profile

fraud detection, identity assurance, risk management, decision orchestration, fraud
prevention, trust and safety, authentication

Business model

SaaS and on-premise models

Target market

- ecommerce, marketplaces, digital commerce, on-demand/sharing economy, classifieds,
financial institutions, fintech (banks, mobile wallets, and more)
- payment services providers (acquirers, payment gateways, payment processors)

Contact

contact@simility.com

Geographical presence

Global coverage with offices in Palo Alto (US), Dallas (US), Hyderabad (India), London (UK),
Amsterdam (NL), and Sao Paulo (Brazil)

Active since

2014

Service provider type

- technology vendor
- web fraud detection company

Member of industry associations
and/or initiatives

Merchant Risk Council, SOC2 Type II compliant, PCI compliant

Services
Unique selling points

Complete enterprise fraud management platform, with ingress processing, Device Recon,
third party validation, analytics, machine learning, and case management

Core services

Fraud and risk management

Pricing model

Per-transaction and on-premise license pricing models

Fraud prevention partners

Assertiva

Other services

Data-Science-as-a-Service, historical data analysis

Third party connection

Simility can connect to various 3rd party feeds, including internal customer data feeds.

Technology: anti-fraud detection tools available
Address verifications services

Yes, through third-party services

CNP transactions

Yes

Card Verification Value (CVV)

More information available upon request

Bin lookup

Yes

Geo-location checks

Yes

Device fingerprint

Yes

Payer authentication

Yes

Velocity rules – Purchase limit
rules

Yes

White list/black list database

Yes

KYC – Know Your Customer

Yes

Credit rating

No

Follow up action

Yes

Other

IP blacklists, device fingerprint

219

WEB FRAUD PREVENTION & ONLINE AUTHENTICATION MARKET GUIDE 2018-2019 | COMPANY PROFILES

Authentication context
Online

Yes

Mobile

Yes

ATM

More information available upon request

POS

Yes

Call centre

More information available upon request

Other

Branch banking data

Reference data connectivity
Connectivity to governmental
data

More information available upon request

Other databases

Yes, we work with a variety of third party services

Fraud management system type
Single-channel fraud prevention
system

More information available upon request

Multi-channel fraud prevention
system

Yes

Certification
Type

SOC2 Type I and II, PCI compliance

Regulation

More information available upon request

Other quality programmes

More information available upon request

Other remarks

More information available upon request

Clients
Main clients / references

Customers include Global 500 in financial services, ecommerce, payments, classifieds.
Public references include US Bank, Chime, Jumia, OfferUp, Luisaviaroma, Zions Bank.

Future developments

Further interactive data visualisation and out-of-the box integrations with new data sources.

220

WEB FRAUD PREVENTION & ONLINE AUTHENTICATION MARKET GUIDE 2018-2019 | COMPANY PROFILES

Transforming the way
analysts detect fraud

Tailored, end-to-end solutions that
provide real-time fraud intelligence
Purpose-built Data Lake
Big-data Enabled
State-of-the-art, White-box Machine Learning
Continuous Rules Optimization
Powerful Decision Engine

GET STARTED TODAY
An AI-based fraud prevention and risk management platform
that continuously adapts as fraud evolves. See for yourself:
WWW.SIMILITY.COM/DEMO

Company

ThreatMetrix

View company profile in online database

a LexisNexis Risk Solutions Company
ThreatMetrix, A LexisNexis Risk Solutions Company, empowers the global economy to grow
profitably and securely without compromise. With deep insight into hundreds of millions of
anonymised digital identities, ThreatMetrix ID delivers the intelligence behind 110 million
daily authentication and trust decisions, to differentiate legitimate customers from fraudsters
in real time.
Website

www.threatmetrix.com

Keywords for online profile

digital identity, authentication, identity verification, fraud detection, mobile fraud, web fraud,
forensics, threat detection

Business model

Software-as-a-Service (SaaS)

Target market

- banking and brokerage
- ecommerce
- gaming
- government
- healthcare
- insurance
- lending
- media
- payment processing
- telecommunications
- travel

Contact

Courtney Austin, Senior Director EMEA Marketing, ThreatMetrix

Geographical presence

Worldwide: more than 185 countries

Active since

2005

Service provider type

- digital identity service provider
- technology vendor
- web fraud detection company

Member of industry associations
and or initiatives

FIDO, One World Identity, MRC

Services
Unique selling points

Comprehensive platform to manage fraud, authentication, and identity decisions. By
seamlessly combining digital identity intelligence from ThreatMetrix with vast offline data
sources from LexisNexis Risk Solutions, organisations get unparalleled visibility into the
true identity of their users in order to instantly differentiate between trusted consumers and
fraudsters.

Core services

Digital identity, risk-based authentication, fraud prevention, mobile security, knowledgebased authentication

Pricing Model

Tiered pricing based on transaction volume

Fraud prevention partners

ACI, Cardinal Commerce, CyberSource, First Data, FIS, Fujisoft, Gemalto, LexisNexis, nets,
Paysafe and Worldpay.

Other services

Prevention against account takeover, new account registration and payment fraud; strong
authentication; behavioural analytics and machine learning; bot and remote access trojan
detection; professional services

Third party connection

Yes

Technology: anti-fraud detection tools available
Address verifications services

Yes

CNP transactions

Yes

Card Verification Value (CVV)

No

Bin lookup

No

Geo-location Checks

Yes

Device Fingerprint

Yes

222

WEB FRAUD PREVENTION & ONLINE AUTHENTICATION MARKET GUIDE 2018-2019 | COMPANY PROFILES

Payer Authentication

Yes

Velocity Rules – Purchase Limit
Rules

Yes

White list/black list database:

Yes

KYC – Know Your Customer

Yes

Credit Rating

No

Follow up action

Additional authentication (out of band authentication) and transaction verification capabilities

Other

Carrier ID for strong mobile authentication

Authentication Context
Online

Yes

Mobile

Yes

ATM

No

POS

No

Call center

Yes

other

No

Reference Data connectivity
Connectivity to governmental
data

Yes

Other databases

ThreatMetrix Digital Identity Network is one of the largest databases for monitoring
customers providing global shared intelligence. Every day millions of consumer events are
logged as well as thousands of high risk flags.

Fraud management system type
Single-channel fraud prevention
system

Yes

Multi-channel fraud prevention
system

Yes

Certification
Type

SOC-2 expected in 2019

Regulation

No

Other quality programs

No

Other remarks

No

Clients
Main clients / references

Netflix, Lloyds Banking Group, Visa, Yandex.Money, Gumtree

Future developments

Continued platform integrations between ThreatMetrix and LexisNexis Risk Solutions

223

WEB FRAUD PREVENTION & ONLINE AUTHENTICATION MARKET GUIDE 2018-2019 | COMPANY PROFILES

www.threatmetrix.com

The Decision Engine for
Seamless Digital Business
Fighting fraud with digital identity
intelligence from billions of transactions
and a powerful decision platform.

ThreatMetrix® Digital Identity Network®

Harness the power of global shared intelligence from the largest network of its kind.

40b

annual network
transactions

165k

websites & apps
supported

4.5b

unique devices
identified

.8b

unique email
addresses

1.5b

mobile devices

185

countries served
globally

Company

Trulioo

View company profile in online database

Trulioo is a global identity and business verification company that provides secure access
to reliable, independent, trusted data sources to instantly verify customers and merchants
online. Trulioo’s instant online verification platform, GlobalGateway, helps organisations
comply with AML and KYC requirements by automating due diligence workflows across
borders through a single solution.
Website

www.trulioo.com

Keywords for online profile

regtech, KYC, Know Your Customer, AML compliance, identity verficiation, ultimate
beneficial owners, identity checks, customer due diligence

Business model

Transaction-based

Target market

Financial services providers, banks, payments, remittance, ecommerce, gaming, and online
marketplaces

Contact

media@trulioo.com

Geographical presence

Global

Active since

2011

Service provider type

Digital Identity Service Providers

Member of industry associations
and initiatives

More information available upon request

Services
Unique selling points

Trulioo’s GlobalGateway offers clients with secure access to 5 billion people, more than
100 countries, 250 million companies, and 400 data sources through a single API integration
for instant verification.

Core services

Digital electronic identity verification

Pricing Model

Pricing is per transaction and based on volume and complexity.

Fraud prevention partners
Other services

Offers Mobile ID, business verification and ID document verification.

Offering: authentication technology used
PIN

No

Password/phrase

Yes (for API)

Token

No

Card

No

Digital certificates (hosted yes/no)

No

Multifactor authentication

Yes (in the portal)

Biometrics

Yes

Authentication context
Online

Yes

Mobile

Yes

ATM

No

Branch/Point of Sale

Yes

Call Centre

Yes

Other

N/A

Attributes offered
Persons

First, middle and last name, DOB; minimum age, gender, address, mobile/telephone number,
email addres, driver licence number and expiry, National IDs

Companies

Date of incorporation, jurisdiction of incorporation, shareholder list document, financial
information document, address, mobile/telephone number, email address

225

WEB FRAUD PREVENTION & ONLINE AUTHENTICATION MARKET GUIDE 2018-2019 | COMPANY PROFILES

Reference data connectivity
Connectivity to governmental
data

Citizens register, company register, IDs

Other databases

Utility bills, mobile network operators, social data, credit databases

Certification
Type

ISO27001

Regulation

KYC, AML, 4AMLD, PSD2, FCA, Fintrac, MiFID II, GDPR and FinCEN, AUSTRAC

Other quality programs

N/A

Other remarks

N/A

Clients
Main clients / references

Trulioo is a trusted verification provider for more than 500 companies, including some of the
world’s top payments, ecommerce and financial services providers.

Future developments

N/A

226

WEB FRAUD PREVENTION & ONLINE AUTHENTICATION MARKET GUIDE 2018-2019 | COMPANY PROFILES

Fraud Prevention Begins with
Knowing Your Customer
Trulioo's AML/KYC solution automates the CDD
process for over 5 billion people & 250 million
corporate entities in 100+ countries
Accelerate your KYC process from weeks to minutes
with award-winning identity verification.
Chat with us at trulioo.com

Company

Trust Stamp

View company profile in online database

Trust Stamp provides a proprietary AI-powered hashed biometric identity solution. A
one-way process converts biometric data into a hash that cannot be reconstructed into
the original biometric, avoiding the security risks and legal complications of storing and
transmitting PII data. These hashes solve problems like synthetic identity fraud and KYC.
Website

https://truststamp.ai/

Keywords for online profile

fraud, risk, protect, loss, biometrics, detection

Business model

Per use licenses or custom product development

Target market (limited list of
markets)

Financial institutions, payment services providers, government services, P2P platforms,
gaming and gambling, other online businesses, and real estate

Contact

andrew.gowasack@emergenttech.com

Geographical presence

Europe, North America, Latin America, Middle East & Africa

Active since

2015

Service provider type

Digital identity service provider, technology vendor, web fraud detection company

Member of industry associations
and initiatives

Conference of Western Attorney Generals, Biometrics Institute

Services
Unique selling points

Trust Stamp is a multi-factor biometric platform with inbuilt de-duplication that can be
augmented with social media and other data mining or even self-warrantied identities. A
unique factor is a shareable non-PII hash that tokenizes the identity and can embed both
encrypted data and pivot points to external data.

Core services

Trust Stamp uses proprietary facial biometric AI with proof of life to create tokenized identity
hashes.

Pricing

Pricing is per transaction and based on volume and complexity

Partners

Plug and Play, The National Association of Realtors, Mastercard Startpath, QC Fintech,
SixThirty Cyber, and Gerogia Institute of Technology Advanced Technology Development
Center

Other services

For more information contact the company

Offering: authentication technology used
PIN

Yes

Password/phrase

Yes

Token

Yes

Card

For more information contact the company

Digital certificates (hosted yes/no)

For more information contact the company

Multifactor authentication

Yes

Biometrics

Yes

Authentication context
Online

Yes

Mobile

Yes

ATM

For more information contact the company

Branch/Point of Sale

Yes

Call Centre

Yes

Other

For more information contact the company

Reference data connectivity
Connectivity to governmental
data

For our safety apps we search public data sources, such as criminal databases and sexual
offender lists.

Other databases

For our real estate solution we are using proprietary non-FCRA data to qualify leads for real
estate.

228

WEB FRAUD PREVENTION & ONLINE AUTHENTICATION MARKET GUIDE 2018-2019 | COMPANY PROFILES

Certification
Type

For more information contact the company

Regulation

KYC, PII, GDPR

Other quality programs

For more information contact the company

Other remarks

For more information contact the company

Clients
Main clients / references

Synchrony Financial, Conference of Western Attorny Generals, Mastercard Startpath
Program, Plug and Play ADGM

Future developments

For more information contact the company

229

WEB FRAUD PREVENTION & ONLINE AUTHENTICATION MARKET GUIDE 2018-2019 | COMPANY PROFILES

Artificial Intelligence Powered

Federated Trust and Identity

DATE OF BIRTH
XX-XX-XXXX

Evergreen HashTM
Biometric data is transformed into a 512 byte-hash using a
deep neural network. The hash is pseudo-anonymized data
and can never be reverse engineered.
ADDRESS
### XX-XXXX

• Hashes can be generated from any biometric data
• The Hash also offers 1.28 Bn. unique hash or encrypted data points
• Fields can contain substantive data or serve
as a pivot point to external data

Hashed Identity LakeTM
Once created, the hash is added to an Identity Lake
• The lake can be hosted on a server
or a blockchain
• Proprietary AI predicts the
cprobability that two hashes came
cfrom the same face, flagging
cfraudsters with multiple identities

#
#

#

#

• The lake can act as a non-PII data
csharing consotrium with adjustable
caccess based on agreement

Learn More at www.truststamp.ai

Company

Web Shield Limited

View company profile in online database

Founded by highly-motivated, technology-aﬀine professionals from the credit card and
IT industries, we at Web Shield use our expertise in large-scale project management, system
architecture design, software development and several investigation areas to perform risk
assessments and persistent monitoring of legal entities.
Website

www.webshield.com

Keywords for online profile

on-boarding, underwriting, monitoring

Business model

On-demand and subscription service

Target market

- acquiring banks
- payment service providers
- financial institutions
- online communities/web merchants
- credit bureaus (qualitative data approach)
- gaming and gambling
- law enforcement
- detective agencies
- other online businesses

Contact

compliance@webshield.com

Geographical presence

Leipzig, Warsaw, London

Active since

2011

Service provider type

- SaaS vendor
- training
- consulting services

Member of industry associations
and or initiatives

Merchant Acquirers’ Comittee, European Financial Coalition, Internet Watch Foundation,
Electronic Transactions Association, International RegTech Association

Services
Unique selling points

Web Shield helps acquiring banks, payment processors and other actors in the payments
space to protect themselves from bad actors involved in illegal or non-compliant activities.
Our highly precise on-boarding and monitoring tools enable underwriters to make informed
decisions about prospective clients, and alert them when existing ones behave dubiously.

Core services

On-boarding and monitoring solutions

Pricing Model

For more information please contact compliance@webshield.com

Fraud prevention partners

Wołoszański & Partners Law Firm

Other services

- training seminars for risk management, underwriting best practices and online investigation
- regulatory monitoring, a dynamic international database with legal opinions concerning
cryptocurrency regulation
- organising the RiskConnect Networking Conference for Risk Professionals in Frankfurt a.M.
(https://www.riskconnect.eu/)
- content violation detection for Cyberlockers

Third party connection

CreditSafe, LexisNexis, iSignthis, Vendorcom, Minera, RiskSkill, 4Stop

Technology: anti-fraud detection tools available
Address verifications services

Yes

CNP transactions

No

Card Verification Value (CVV)

No

Bin lookup

No

Geo-location Checks

Yes

Device Fingerprint

No

Payer Authentication

No

Velocity Rules – Purchase Limit
Rules

No

White list/black list database

Yes

231

WEB FRAUD PREVENTION & ONLINE AUTHENTICATION MARKET GUIDE 2018-2019 | COMPANY PROFILES

KYC – Know Your Customer

Yes

Credit Rating

Yes

Follow up action

For more information please contact compliance@webshield.com

Other

For more information please contact compliance@webshield.com

Authentication Context
Online

Yes

Mobile

Yes

ATM

No

POS

No

Call centre

No

other

For more information please contact compliance@webshield.com

Reference data connectivity
Connectivity to governmental
data

Yes

Other databases

Commercial attribute providers, e.g. credit databases

Fraud management system type
Single-channel fraud prevention
system

Yes

Multi-channel fraud prevention
system

Yes

Certification
Type

For more information please contact compliance@webshield.com

Regulation

For more information please contact compliance@webshield.com

Other quality programmes

Mastercard Merchant Monitoring Service Provider

Other remarks

For more information please contact compliance@webshield.com

Clients
Main clients / references

Wirecard Bank AG, Worldline SA, Concardis

Future developments

For more information please contact compliance@webshield.com

232

WEB FRAUD PREVENTION & ONLINE AUTHENTICATION MARKET GUIDE 2018-2019 | COMPANY PROFILES

Company

Wibmo Inc.

View company profile in online database

Wibmo Inc. a Cupertino, California company is a leading provider of payment security and
mobile payments in emerging markets with a leading market presence in India, one of the
world’s largest digital payment markets.
Website

www.wibmo.co

Keywords for online profile

Online fraud prevention, mobile app security, mobile banking, online banking, CNP
fraud prevention, out-of-band authentication, multi-factor authentication, push-based
authentication, EMV® 3-D Secure, behavioural biometrics, artificial intelligence

Business model

Software-as-a-Service (SaaS)

Target market

Banks, issuers, ecommerce/merchants, acquirers/PSPs, fintech, mobile commerce and
mobile payment consumers

Contact

sales@wibmo.com

Geographical presence

India, Middle East, Africa, Asia, Southeast Asia

Active since

1999

Service provider type

Web fraud detection company / payment service provider (PSP)

Member of industry associations
and or initiatives

Visa, Mastercard authorised processor
EMVCo Business and Technical Associate
PCI-DSS 3.2 certified EMVCo 3DS certified

Services
Unique selling points

Trident the next generation intelligent enterprise fraud mitigation system performs realtime fraud detection with a combination of rules-based approach and advanced analytics
powered by artificial intelligence.
1. Enterprise screening
2. Multi-factor fraud detection techniques
3. Advanced Analytics
4. Realtime Transaction Monitoring and Case Management
5. Dynamic addition of new data types and data streams
6. Realtime rules activation resulting in ability to react to fraud trends in real time

Core services

Multi-channel support - POS, ATM, ecommerce, Prepaid, and more. Case management,
static and dynamic rules based engine, real-time analytics, machine learning models

Pricing Model

Varies by service model, data dimensions, volume and complexity of fraud management
framework deployed

Fraud prevention partners

For more information contact the company

Other services

Fraud data network, device intelligence, account take over, identity validations, bot
detections, prevention of promotional abuse, seamless authentication

Third party connection

For more information contact the company

Technology: anti-fraud detection tools available
Address verifications services

No

CNP transactions

Yes

Card Verification Value (CVV)

N/A

Bin lookup

Yes

Geo-location Checks

Yes

Device Fingerprint

Yes

Payer Authentication

Yes

Velocity Rules – Purchase Limit
Rules

Yes

White list/black list database:

Yes

KYC – Know Your Customer

No

Credit Rating

Yes

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Follow up action

Yes

Other

Behavioural analytics, trident score, spend and fraud patterns, multi-factor fraud detection
techniques

Authentication Context
Online

Yes

Mobile

Yes

ATM

Yes

POS

Yes

Call centre

Yes

other

NetBanking, Prepaid, Non-Financial Systems

Reference Data connectivity
Connectivity to governmental
data

No

Other databases

Yes

Fraud management system type
Single-channel fraud prevention
system

N/A

Multi-channel fraud prevention
system

Yes

Certification
Type

For more information contact the company

Regulation

AML

Other quality programmes

For more information contact the company

Other remarks

For more information contact the company

Clients
Main clients / references

Leading banks across Asia. More information available upon request.

Future developments

More information available upon request

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Is your authentication intelligent enough?

Copyright © 2018 Wibmo Inc. All rights reserved.

www.wibmo.com

Glossary

Glossary
A

Authentication

Abuse list

A security measure that determines whether someone or some

Intelligence-sharing mechanisms used to widely disseminate tac

thing is, in fact, who or what it declares to be. An authentication

tical fraud intelligence like mule accounts, phishing sites, malware

process implies the verification of a cardholder with the issuing

distribution sites, compromised websites, botnet IP addresses,

bank. Authentication often precedes authorisation (although they

compromised point-of-sale terminals, etc. Abuse lists may be pri

may often seem to be combined). The two terms are often used

vate (available on subscription or as part of a larger fraud detection

synonymously but they imply two different processes.

solution) or public.

Authentication factor
Account takeover (ATO)

A piece of information and process used to authenticate or verify the

A form of identity theft where a criminal gains complete control of

identity of an entity based on one or more of the following:

a consumer’s account, such as obtaining the PIN or changing the

• Possession, e.g. device signature, passport, hardware device con

statement mailing address and/or making unauthorised trans

taining a credential, private key;
• Knowledge, e.g. password, PIN;

actions.

• Inherence, e.g. biometric characteristic;

Adaptive decisioning

• Context, e.g. behaviour pattern, geo-location.

A system which draws insights from multiple data sources and is
armed with the agility to make real-time adjustments for maximum

Authorisation

impact on fraud levels whilst minimising customer friction.

Verifying that the entity initiating a transaction is entitled to per
form that action.

Address Verification System (AVS)
A service used to check the billing address of the credit card pro

B

vided by the user with the address on file at the credit card com

Behaviour patterns

pany. AVS is widely supported by Visa, Mastercard, and American

Behavioural pattern detection technologies identify fraud by moni

Express in the US, Canada and the UK.

toring the user session to detect suspicious activities or patterns.
These anomalies manifest in a couple of ways:

Anti-Money Laundering (AML)
A set of procedures, laws or regulations designed to stop the prac

• Transactional: The user is performing transactions that are outof-pattern compared with normal behaviour.

tice of generating income through illegal actions. In most cases,

• Navigational: The manner in which the user is navigating the

money launderers hide their actions through a series of steps

website is inconsistent with his or her usual pattern, is inconsis

that make it look like money coming from illegal or unethical

tent with the pattern of his or her peer group, or is indicative of

sources was earned legitimately.

the navigational pattern of a bot.
Many (though not all) transactional anomaly detection solutions

Artificial Intelligence

require extensive data integration. Navigational anomaly detection

The simulation of the processes of human intelligence by machines,

tends to be a more lightweight deployment.

especially computer systems. These processes include learning
(the acquisition of information and rules for using the information),
reasoning (using the rules to reach approximate or definite con
clusions), and self-correction.

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Glossary
Big Data

Cardholder-not-present (CNP) fraud

Large data sets that may be analysed computationally to reveal

Using stolen cards or card details and personal information, a

patterns, trends, and associations relating to human behaviour and

fraudster purchases goods or services remotely – online, by tele

interactions. By developing predictive models based on both histo

phone or by mail order.

rical and real-time data, companies can identify suspected frau
dulent claims in the early stages.

Case management
In the context of fraud management, it refers to the actions required

Botnet

to contain and remediate the impact of a detected fraud incident.

A network of computers that fraudsters have corrupted with hidden

Case management system refers to the ICT tooling used to

software to secretly send spam.

automate routine follow-up activities and facilitate case manage
ment workflows.

Bring your own authentication (BYOA)
A computing concept in which an employee-owned device, such as

CCV

a key fob or smartphone, can be used to provide authentication

A unique check value encoded on the magnetic stripe and repli

credentials within a business environment.

cated in the chip of a card or the magnetic stripe of a Visa card to
validate card information during the authorisation process.

C

Card capture device

CCV2 (CID)

A device inserted into an ATM card slot which captures the data

Also known as Card Validation Code or Value, or Card Security

contained on the card.

Code. This is a unique 3‐digit check value generated using a
secure cryptographic process that is indent‐printed on the back of

Card testing

a Visa card or provided to a virtual account holder.

Occurs when a fraudster uses a merchant’s website to ‘test’ stolen
credit card information to determine if the card is valid. Fraudsters can

Change of address fraud

purchase lists of credit card numbers online on the ‘Dark Web’ at a

Occurs when the fraudster obtains details of a genuine customer’s

low cost but often do not know if the cards they are purchasing are

account and then contacts the business to announce that he has

active. To test these cards, fraudsters often use automated bots

changed address. This is usually accompanied or followed by a

and scripts to run many of these numbers through a merchant’s

request for items of value such as a chequebook, debit card or

checkout page. If a transaction is approved, the fraudster knows

statement of account to be sent to the fake new address. A false

that the card is valid and can make fraudulent high-value purcha

change of address is used to facilitate previous address fraud and

ses elsewhere.

account/facility takeover fraud.

Card-on-file (CoF)

Chargeback management

Authorised storage of a consumer’s payment credentials by a

An additional service for management of claims initiated on the

merchant, PSP, or WSP, that allows the consumer to conveniently

issuing side.

make repeat or automatic purchases without the need to re-enter
payment credentials each time.

Consumer authentication
The term used to describe tools intended to verify that the person
making the transaction is actually the person authorised to do so,
both in-person and card-not-present transactions.

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Glossary
Credit card fraud

Delivery and returns fraud

Fraud committed using a credit card or any similar payment mecha

Return fraud is the act of defrauding a retail store via the return

nism as a fraudulent source of funds in a transaction. The purpose

process. There are various ways in which this crime is committed.

may be to obtain goods without paying or to obtain unauthorised

For example, the offender may return stolen goods to secure cash

funds from an account. Credit card fraud is also an adjunct to

or steal receipts or receipt tape to enable a falsified return, or to

identity theft.

use somebody else’s receipt to try to return an item picked up
from a store shelf. Return abuse is a form of ‘friendly fraud’ where

Credit check

someone purchases products without intending to keep them.

From researching the customer’s financial history, the vendor can
make a decision regarding onboarding the user.

Derived identification
Relying on the identification that took place at another instance,

Compliance check

for example, a bank or governmental institution. Making use

One can also check an organisation that provides PII or other data

of derived identification also has its constraints. Next to that, it

to see if that organisation is compliant with current regulations

becomes less valuable if everyone makes use of derived identi

regarding data security and potential breaches.

fication. It also implies the prospect already needed to have an
account at another bank.

Customer due diligence
Identification and verification of customers and beneficial owners.

Device fingerprinting
Device fingerprinting is a process by which a fingerprint of a

Cryptography

connected device – desktop, tablet, smartphone, game console,

Protecting information or hiding its meaning by converting it into a

etc – is captured when visiting a website.

secret code before sending it out over a public network.

Device identity

D

Device identity technology examines a combination of identifiable

Data ingestion

hardware and software attributes associated with a computer

The process of accessing and importing data for immediate use

or mobile device. The unique fingerprint associated with each

or storage in a database. Connected to Data ingestion is the con

device can be used to recognise devices associated with

cept of Stateless data ingestion and augmentation, which is the

fraudulent activity as well as for ongoing recognition of devices

system’s ability to ingest all types of data, structured, unstructured,

with trusted reputations. The technology is completely transparent

from third parties and users, as well as to include device/beha

to end users, so it does not insert any friction into the customer

vioural biometrics.

experience.

Fraudsters use the dark web, the portion of the Internet that can

The mobile browser environment can be challenging to fingerprint,

be browsed anonymously, to search for stolen identities and credit/

since there are fewer parameters to track than in the desktop

debit card numbers to buy hacking tutorials or other malicious

browser environment. Mobile apps are just the opposite: Digital

services.

identity vendors provide software development kits to dive deep
into the device and create a footprint around parameter changes

Deep learning

(e.g. the number of contacts, the number of songs in playlists, the

Deep learning is an aspect of artificial intelligence (AI) that is

apps on the device) as well as create behavioural analytics around

concerned with emulating the learning approach that human

the ways in which those parameters change.

beings use to gain certain types of knowledge. At its simplest,
deep learning can be thought of as a way to automate predictive
analytics.

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Glossary
Device location

Digital signature

Device location uses the sensors native to a device to identify its

A digital code (generated and authenticated by public key encryp

location. The technology is transparent to the end user and is a

tion) which is attached to an electronically transmitted document

reliable risk indicator, particularly when used in conjunction with

to verify its contents and the sender’s identity.

other layers of protection. Mobile geolocation can be very useful
for payment authorisation: If a device with the issuer’s mobile app

Document capture

is in close proximity to a payment card transaction, this can be a

These solutions use the camera on the device to capture a picture

valuable indicator to help prevent false declines.

of an identity document (eg a driver’s license or utility bill), verify
the credential, and parse the data into an onboarding system or

Device malware

ecommerce shopping cart form, minimizing the need for consumers

With the steep trajectory of malware creation and deployment by

to go through the data-entry process.

organised crime rings, many banks have deployed technology to
detect malware as well as whether a device is jailbroken or has

E

a rootkit installed. One important consideration as businesses

E-ID services

implement this technology is the fact that not all malware is created

Services for entity authentication and signing data.

equal; some malware doesn’t truly risk compromising the online or
mobile banking session. For one type of malware, a company may

Electronic Data Interchange (EDI)

choose to take no action; for another, it may call the customer; and

It is an electronic communication method that provides standards

for a third strain, it may want to shut down transactional capability

for exchanging data. By adhering to the same standard, compa

immediately.

nies that use EDI can transfer data from one branch to another
and even across the world.

Device-user interaction
Observations of how the user interacts with the input device, e.g.

Encryption

the smartphone, mouse, or keyboard. Fraudsters have been known

A method of coding data, using an algorithm, to protect it from

to make use of either remote-access tools within malware or misuse

unauthorised access. There are many types of data encryption,

of legitimate remote-access software to gain control of a victim’s

and they are the basis of network security.

device.

End-to-end encryption
Denial of service attack (DoS)

Uninterrupted protection of the integrity and confidentiality of trans

An attack on a computer system or network that causes a loss of

mitted data by encoding it at the start and decoding it at the end of

service to users. A network of computers is used to bombard

the transaction.

and overwhelm another network of computers with the intention
of causing the server to ‘crash’. A Distributed Denial of Service

Endpoint authentication

(DDoS) attack relies on brute force by using attacks from multiple

A security system that verifies the identity of a remotely connected

computers. These attacks can be used to extort money from the

device (and its user), such as a personal digital assistant (PDA) or

businesses targeted.

laptop, before allowing access to enterprise network resources or
data.

Digital identity
It is a collection of identity attributes, an identity in an electronic
form (e.g. electronic identity).

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Glossary
Endpoint protection

FIDO (Fast ID Online)

Endpoint protection refers to a wide range of solutions for pro

A set of technology-agnostic security specifications for strong

tecting and/or detecting compromise of the end-user’s computing

authentication. FIDO is developed by the FIDO Alliance, a non-

device (desktop, laptop, mobile device etc). Endpoint protection

profit organisation formed in 2012.

solutions, in general, use one or more of the following techniques:
• Hardening: the solution blocks or otherwise eliminates commonly
exploited vulnerabilities.
• Monitoring/Detection: the solution monitors the system and/or
user behaviour and detects anomalies.

Fraud apps
These are fraudulent apps that work in two ways:
• simulated ad interactions;
• intentionally misleading buttons or layouts.

• Sandbox: the solution redirects any untrusted content to a sand
box environment that enables safe identification of malicious

In the simulated ad interactions, bots trigger ad activity. With the

content.

misleading buttons or layouts, developers create layouts that

• Anti-Virus solutions are an example of endpoint solutions that
generally use a signature/rule-based approach.

overlap ads with content so users will unintentionally click the ads.
Users usually have no intention of clicking some of these ads but

•Sensitive Information Protection solutions rely more on infor

do so because the ads are so small that they tap them by mistake.

mation classification and heuristics or machine learning-based

Furthermore, these types of apps can contain more ads than they

algorithms for detection of abnormal information flows.

are usually allowed by their operating system to serve, or display

• Malware Protection solutions rely on a combination of one or more

ads outside of the screen view of an application.

of the three techniques.

Fraud detection
EMV

Tools and techniques used to detect ‘acts of fraud’. It includes

EMV (Europay-Mastercard-Visa) is a global standard for credit

tools and techniques for: data analysis, data mining, rule-based

and debit cards based on chip card technology. The EMV cards

detection systems, supervised machine learning systems, and

make in-person transactions more secure, but increase the threat

unsupervised machine learning systems.

of fraud in card-not-present transactions because the chip is not
involved in the transaction and provides no benefit when the card

Fraud management

is not present.

Organisational processes to prevent, detect, contain and remedy
fraud.

F

False front merchants

Fraud prevention

Entities who hide the true nature of their businesses and sales of

Processes, tools, and techniques used to prevent ‘acts of fraud’.

card-brand prohibited goods and services. These companies do

It includes communication and awareness, authentication, and

not actually engage in selling what they claim during the merchant

other business processes controls.

underwriting process, and usually are involved in illicit, illegal
endeavours.

Fraud screening
A checking system that identifies potentially fraudulent transac

False positive

tions. Fraud screening helps reduce fraudulent credit card trans

It occurs when a good transaction or order is rejected by either

actions, eliminating the need for manual reviews, minimizing bad

the issuer or the merchant, due to suspected fraud.

sales and improving a company’s bottom line.

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Glossary
Federated identity

Global Address Verification Directories

A federated identity is the means of linking a person’s electronic

This feature enables fraud protection solutions to compare the

identity and attributes stored across multiple distinct identity

address introduced by the visitor with the existing address, detec

management systems. Without federated identity, users are forced

ting any fake data. It also helps e‐merchants keep their customers

to manage different credentials for every site they use.

easily reachable.

Related to federated identity is single sign-on (SSO), in which a

Guaranteed Fraud Prevention

user’s single authentication ticket, or token, is trusted across mult

A kind of insurance that transfers the impact of fraud losses from

iple IT systems or even organisations. SSO is a subset of federated

the insured entity (bank or processor or merchant) to a third party.

identity management, as it relates only to authentication and is

This may be linked to the implementation of specific fraud preven

understood on the level of technical interoperability and it would not

tion solutions.

be possible without some sort of federation.

Fingerprint recognition

H

Hash function

The biometric modality that uses the physical structure of the

A function that can be used to map digital data of arbitrary size to

user’s fingerprint for recognition. In most of fingerprint recognition

digital data of fixed size. The values returned by a hash function

processes, the biometric samples are compressed in minutiae

are called hash values, hash codes, hash sums, or simply hashes.

points that reduce the size of data and accelerate the process.

With Bitcoin, a cryptographic hash function takes input data of any
size and transforms it into a compact string.

Fraud score
A fraud score may be available during transaction authorisation.

Host Card Emulation (HCE)

This is a number, usually between 0 and 1,000 that represents

On-device technology that permits a phone to perform card emu

the overall fraud risk of a particular transaction. The higher the

lation on an NFC-enabled device. With HCE, critical payment

number, the riskier the transaction.

credentials are stored in a secure shared repository (the issuer
data centre or private cloud) rather than on the phone. Limited use

Friendly fraud

credentials are delivered to the phone in advance to enable contact

When a consumer (or someone with access to a credit card) makes

less transactions to take place.

a purchase and then initiates a chargeback, saying they did not
make the purchase and/or did not receive the goods or services.

Hybrid detection system
Fraud detection system that uses both rule-based and machine

G

learning techniques.

Geo Location Detection
Set of diverse and ideally automated tests that help fraud protec

I

tion solutions assess the risk of fraud involved in a specific order

Identity of Things (IDoT)

passing through a merchant’s website. These tests might include

An area of endeavour that involves assigning unique identifiers

IP to Zip Code, IP to Billing Address, High IP Cross Referencing, IP

(UID) with associated metadata to devices and objects (things),

Geo Location & Proxy Detection, and NPA NXX Area Code Web

enabling them to connect and communicate effectively with other

Service.

entities over the internet.

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Glossary
Identity Service Provider

Information sharing network

An identity provider (IdP) is a system entity that creates, maintains,

In the context of fraud management, refers to a public or private

and manages identity information for principals while providing

service provider of one or more Abuse Lists.

authentication services to relying on party applications within a
federation or distributed network.

InfoSec (information security)
The practice of defending information from unauthorised access,

It usually offers user authentication as a service. Relying party

use, disclosure, disruption, modification, perusal, inspection,

applications, such as web applications, outsource the user authen

recording or destruction.

tication step to a trusted identity provider. Such a relying party
application is said to be federated, that is, it consumes federated

Integrator (Systems Integrator)

identity.

An entity that specialises in bringing together component
subsystems into a whole and ensuring that those subsystems

An identity provider is considered a trusted provider that enables

function together.

consumers to use single sign-on (SSO) to access other websites.
SSO enhances usability by reducing password fatigue. It also

Intelligence

provides better security by decreasing the potential attack surface.

The gathering, assessment and dissemination of information that
is valuable for fraud prevention and/or detection. Fraud intelli

Identity spoofing

gence can be strategic (activities of threat actors, etc) and/or

Using a stolen identity, credit card or compromised username /

tactical (mule accounts, phishing sites, botnet IPs, etc).

password combination to attempt fraud or account takeover.
Typically, identity spoofing is detected based on high velocity of

Internal fraud

identity usage for a given device, detecting the same device

Internal fraud occurs when a staff member dishonestly makes a

accessing multiple unrelated user accounts or unusual identity

false representation, or wrongfully fails to disclose information,

linkages and usage.

or abuses a position of trust for personal gain, or causes loss to
others. Internal fraud can range from compromising customer

Identity theft

or payroll data to inflating expenses to straightforward theft.

Identity theft happens when fraudsters access enough information

Sometimes it’s an unplanned, opportunistic attack purely for

about someone’s identity (such as their name, date of birth,

personal financial gain, but sometimes it’s linked to a serious and

current or previous addresses) to commit identity fraud. Identity

organised criminal network or even terrorist financing.

theft can take place whether the fraud victim is alive or deceased.

Internet of Things (IoT)
Identity verification

The network of physical objects that feature an IP address for

Checking the provided information about the identity with pre

internet connectivity, and the communication that occurs between

viously corroborated information and its binding to the entity.

these objects and other internet-enabled devices and systems.

Identity and Access Management (IAM)

Interoperability

The security and business discipline that enables the right

A situation in which payment instruments belonging to a given

individuals to access the right resources at the right time and for the

scheme may be used in other countries and in systems installed

right reasons. It addresses the need to ensure appropriate access

by other schemes. Interoperability requires technical compatibility

to resources across increasingly heterogeneous technology

between systems, but can only take effect where commercial

environments and to meet increasingly rigorous compliance

agreements have been concluded between the schemes

requirements.

concerned.

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Glossary
Investment fraud

M

Investment fraud is any scheme or deception relating to invest

Machine Learning System

ments that affect a person or company. Investment fraud includes:

Machine learning fraud detection systems use artificial intelligence

• illegal insider trading

solutions to detect ‘acts of fraud’. These techniques fall under two

• fraudulent manipulation of the Stock Market

main categories:

• prime bank investment schemes.
• Supervised learning systems – these systems require training

K

data sets to learn and use techniques like neural networks,

Knowledge-Based Authentication

bayesian models, regression models, statistical models, or a

KBA is a method of authentication which seeks to prove the

combination.

identity of someone accessing a service, such as a financial

• U nsupervised learning systems – these systems are able to

institution or website. As the name suggests, KBA requires the

identify potential fraud based on techniques like clustering, peer

knowledge of private information of the individual to prove that

group analysis, breakpoint analysis, profiling or a combination.

the person providing the identity information is the owner of the
identity. There are two types of KBA: ‘static KBA’, which is based

Mail Order – Telephone Order (MOTO)

on a pre-agreed set of ‘shared secrets’; and ‘dynamic KBA’, which

MOTO accounts are required when more than 30% of credit

is based on questions generated from a wider base of personal

cards cannot be physically swiped. Merchants that have a MOTO

information.

merchant account usually process credit card payments by
entering the credit card information directly into a terminal that

Know Your Customer (KYC)

contains a keypad, by using terminal software installed on a per

The term refers to due diligence activities that financial institutions

sonal computer, or by using a ‘virtual’ terminal that allows the

and other regulated companies must perform to ascertain relevant

merchant to use a normal web browser to process transactions on

information from their clients for the purpose of doing business

a payment service provider’s website.

with them. Know your customer policies are becoming increasingly
important globally to prevent identity theft, financial fraud, money

Malware

laundering and terrorist financing.

A software specifically designed to disrupt or damage a computer
system.

L

Level of Assurance (LoA)

Man-in-the-browser

Degree of confidence reached in the authentication process that

A form of internet threat related to man-in-the-middle (MITM); it is

the entity is what it claims to be or is expected to be.

a proxy Trojan that infects a web browser by taking the advantage
of vulnerabilities in browser security to modify web pages or

Liability shift

transaction content or to insert additional transactions, all in a

The liability for chargebacks resulting from fraudulent transactions

completely covert fashion invisible to both the user and host web

moves from the merchant to the issuing bank when the merchant

application. A proxy Trojan is a virus which hijacks and turns the

has authenticated the transaction using any of the 3-D Secure

host computer into a proxy server, part of a botnet, from which an

protocols. Without Consumer Authentication, merchants are liable

attacker can stage anonymous activities and attacks.

for chargebacks.

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WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

Glossary
Man-in-the-middle

Open Authorisation (OAuth)

In cryptography and computer security, it is a form of active eaves

An open standard for token-based authentication and authorisation

dropping in which the attacker makes independent connections

on the Internet. It allows an end user’s account information to be

with the victims and relays messages between them, making them

used by third-party services, such as Facebook, without exposing

believe that they are talking directly to each other over a private

the user’s password. OAuth acts as an intermediary on behalf

connection, when in fact the entire conversation is controlled by

of the end user, providing the service with an access token that

the attacker.

authorises specific account information to be shared. The process
for obtaining the token is called a flow.

Manual review
A technique in which merchants use staff members to perform

OpenID

manual checks on orders to determine which orders are frau

An open standard that describes how users can be authenticated

dulent.

in a decentralised manner, eliminating the need for services to
provide their own ad hoc systems and allowing users to conso

Merchant account

lidate their digital identities. Users may create accounts with their

A type of bank account that allows businesses to accept pay

preferred OpenID identity providers, and then use those accounts

ments in multiple ways, typically debit or credit cards. A merchant

as the basis for signing on to any website which accepts OpenID

account is established under an agreement between an acceptor

authentication.

and a merchant acquiring bank for the settlement of payment card
transactions.

Orchestration hub
Orchestration hub is part of a fraud prevention platform that allows

Money laundering

companies to request and receive data from third-party providers,

The process of concealing the source of money obtained by illicit

with static, data-based identification, endpoint profiling, entity

means. The methods by which money may be laundered are varied

relationship, and behaviour analytics.

and can range in sophistication. Many regulatory and governmental
authorities quote estimates each year for the amount of money

On-premise Solutions

laundered, either worldwide or within their national economy.

A software that is installed and runs on computers on the organi
sation’s premises (in the building), rather than remotely, such as a

Multi-factor authentication

server farm or cloud.

An approach to security authentication, which requires that the
user of a system provide more than one form of verification in

Out-of-band Authentication

order to prove their identity and gain access to the system. Multi-

Out-of-band Authentication (OOBA) uses a communication mecha

factor authentication takes advantage of a combination of several

nism that is not directly associated with the device being used

factors of authentication; three major factors include verification

to access the banking application or ecommerce site in order to

by something a user knows (such as a password), something the

facilitate a second mode of communication.

user has (such as a smart card or a security token), and something
the user is (such as the use of biometrics).

P

Passive authentication

O

A method where the user signs in through a Web form displayed

One-time Password (OTP)

by the identity provider and the user is requested to log in.

A password that can be used only once, usually randomly gen
rated by special software.

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Glossary
Payment Application Data Security Standard (PA DSS)

Phishing

PA DSS is a system designed by the Payment Card Industry

A method which allows criminals to gain access to sensitive infor

Security Standards Council and adopted worldwide. It was

mation (like usernames or passwords). It is a method of social

implemented in an effort to provide the definitive data standard

engineering. Very often, phishing is done by electronic mail. This mail

for software vendors that develop payment applications.

appears to come from a bank or other service provider. It usually

The standard aims to prevent developed payment applications

says that because of some change in the system, the users need

for third parties from storing prohibited secure data including

to re-enter their usernames/passwords to confirm them. The emails

magnetic stripe, CVV2, or PIN. In that process, the standard also

usually have a link to a page similar to the one of the real bank.

dictates that software vendors develop payment applications
that are compliant with the Payment Card Industry Data Security

Public Key Infrastructure (PKI)

Standards (PCI DSS).

The infrastructure needed to support the use of Digital Certificates.
It includes Registration Authorities, Certificate Authorities, relying

Payment Card Industry Data Security Standard

parties, servers, PKCS and OCSP protocols, validation services,

(PCI-DSS)

revocation lists. Uses include secure e-mail, file transfer, document

A proprietary information security standard for organisations

management services, remote access, web-based transactions,

that handle branded credit cards from the major card schemes.

services, non-repudiation, wireless networks and virtual private

The PCI Standard is mandated by the card brands and admi

networks, corporate networks, encryption, and ecommerce.

nistered by the Payment Card Industry Security Standards
Council. The standard was created to increase controls around

Point-to-point encryption (P2PE)

cardholder data to reduce credit card fraud. Validation of com

A point-to-point encryption (P2PE) solution is provided by a third

pliance is performed annually, either by an external Qualified

party solution provider and is a combination of secure devices,

Security Assessor (QSA) or by a firm-specific Internal Security

applications and processes that encrypt data from the point of

Assessor (ISA) that creates a Report on Compliance (ROC) for

interaction (for example, at the point of swipe or dip) until the data

organisations handling large volumes of transactions, or by Self-

reaches the solution provider’s secure decryption environment.

Assessment Questionnaire (SAQ) for companies handling smaller
volumes.

A PCI P2PE solution must include all of the following:
- Secure encryption of payment card data at the point-of-interaction

Personally identifiable information (PII) validation

(POI)

Personally identifiable information (PII) is information that can be

- P2PE-validated application(s) at the point-of-interaction

used on its own or with other information to identify, contact, or

- Secure management of encryption and decryption devices

locate a single person, or to identify an individual in context (eg

- Management of the decryption environment and all decrypted

address, email, passport number, date of birth, etc).

account data

Pharming

Use of secure encryption methodologies and cryptographic key

A type of online fraud where people are redirected from a real web

operations, including key generation, distribution, loading/injec

site to a website impersonating a real one, with malicious intent.

tion, administration and usage.

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WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

Glossary
Privacy

Risk assessment

Privacy is the ability of a person to control the availability of perso

The process of studying the vulnerabilities, threats, and likelihood

nal information and exposure of himself or herself. It is related to

of attacks on a computer system or network.

being able to function in society anonymously (including pseudo
nymous or blind credential identification).

Risk-Based Authentication (RBA)
Risk-Based Authentication is where issuing banks apply varying

Proofing

levels of stringency to authentication processes, based on the

Identity proofing is a common term used to describe the act of

likelihood that access to a given system could result in it being

verifying a person’s identity, as in verifying the ‘proof of an ID’.

compromised.

Other terms that describe this process include identity verification
and identity vetting.

As the level of risk increases, the authentication process becomes
more intense.

R

Ransomware

Rule-based fraud detection

Ransomware is a type of malicious software from cryptovirology

Rule-based fraud detection systems use correlation, statistics,

that threatens to publish the victim’s data or perpetually block

and logical comparison of data to identify potential ‘acts of fraud’

access to it unless a ransom is paid. While some simple ransom

based on insights gained from previous (known) fraud incidents.

ware may lock the system in a way which is not difficult for a

They generally use traditional methods of data analysis and

knowledgeable person to reverse, more advanced malware uses

require complex and time-consuming investigations that deal

a technique called cryptoviral extortion in which it encrypts the

with different domains of knowledge like financial, economics,

victim’s files, making them inaccessible, and demands a ransom

business practices and behaviour. Fraud often consists of many

payment to decrypt them.

instances or incidents involving repeated transgressions using
the same method. Fraud instances can be similar in content and

Ransomware attacks are typically carried out using a Trojan that

appearance, but usually are not identical. Rule-based systems

is disguised as a legitimate file that the user is tricked into down

rely on identifying a known fraud pattern.

loading or opening when it arrives as an email attachment.

Real-time risk management

S

Smart card

A process which allows risk associated with payments between

An access card that contains encoded information used to identify

payment system participants to be managed immediately and

the user.

continuously.

Secure element
Relying Party (RP)

A tamper-proof Smart Card chip capable to embed smart card-

A website or application that wants to verify the end-user’s identi

grade applications with the required level of security and features.

fier. Other terms for this entity include ‘service provider’ or the

In the NFC architecture, the secure element will embed contactless

now obsolete ‘consumer’.

and NFC-related applications, and is connected to the NFC chip
acting as the contactless front end. The secure element could be

Retail loss prevention

integrated into various form factors: SIM cards, embedded in the

A set of practices employed by retail companies to reduce and

handset or SD Card.

deter losses from theft and fraud, colloquially known as ‘shrink
reduction’.

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WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

Glossary
Security protocol

Signing (confirmation by customer)

A sequence of operations that ensure the protection of data. Used

Confirming a financial or non-financial transaction by verifying an

with a communications protocol, it provides secure delivery of

entity’s identity in a manner that is non-repudiable (i.e. using one

data between two parties.

or more authenticators).

Security threat and risk assessment

Skimming

A method that identifies general business and security risks

Card skimming is the illegal copying of information from the

aiming to determine the adequacy of security controls with the

magnetic strip of a credit or ATM card. It is a more direct version

service and mitigating those risks.

of a phishing scam. In biometrics and ID, it could be the act of
obtaining data from an unknowing end user who is not willing to

Security token (authentication token)

submit the sample at that time.

It is a small hardware device that the owner carries to authorise
access to a network service. The device may be in the form of a

Social media analytics

smart card or may be embedded in a commonly used object such

Social media analytics combine public and private data sources

as a key fob.

with an analysis of the consumer’s social media presence. For
example, an applicant who is in her mid-thirties but has no public

Sensitive data

record data nor any trace of social media presence is one who

Information that relates to contact information, identification cards

bears further scrutiny.

and numbers, birth date, social insurance number and other data
that can be used for malicious purposes by cybercriminals.

This type of analysis is also helpful for thin-file consumers who
can’t be readily verified by traditional data sources.

SIM Cloning
A victim’s SIM card data, containing all of their phone’s data, is

Spoofs

copied to a fraudster’s SIM so that the fraudster can impersonate

Various scams in which fraudsters attempt to gather personal

them and access all incoming communication, as well as mobile

information directly from unaware individuals. The methods could

banking. To keep personal information secure, users are advised

include letters, telephone calls, canvassing, websites, e-mails or

to make sure they download the latest banking apps directly from

street surveys.

the official websites, and be wary of using financial institution
contact details from SMSes or emails, as well as confirming

Strong Customer Authentication (SCA)

account details via email, SMS, or telephone. Also, if a user

In accordance with EBA Consultation Paper, the authentication

realises (s)he is not receiving calls or text notifications, (s)he may

procedure shall result in the generation of an authentication code

have fallen victim to a SIM card cloning scam.

that is accepted only once by the payment services provider
each time that the payer, making use of the authentication code,

Single point of purchase

accesses its payment account online, initiates an electronic

The ability to detect whether a consumer’s card may have been

transaction or carries out any action through a remote channel

compromised when an institution is experiencing a high volume of

which may imply a risk of payment fraud or other abuses.

fraudulent transactions.

Suspicious transaction reports (STR)
Smishing (SMS phishing)

A report compiled by the regulated private sector (most commonly

A variant of phishing email scams that utilises SMS systems

banks and financial institutions) about financial flows they have

instead of sending fake text messages.

detected that could be related to money laundering or terrorist
financing.

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WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

Glossary
Synthetic ID fraud

Triangulation fraud

This type of fraud occurs when a fictitious identity is created,

Considered as one of the most complex ecommerce attack

usually with a combination of real and fake information, and is

methods, triangulation fraud involves three points.

used to obtain credit, make purchases and open accounts.

• An unsuspecting customer who places an order on an auction or
marketplace using some form of credit, debit, or PayPal tender.

T

• A fraudulent seller who receives the order and then places the

Threat

order for the actual product with a legitimate ecommerce website

A threat consists of an adverse action performed by a threat agent

using a stolen credit card.

on an asset. Examples of threats are:
• a hacker (with substantial expertise, standard equipment, and

• A legitimate ecommerce website that processes the criminal’s
order.

being paid to do so) remotely copying confidential files from a
company network or from card;
• a computer malware seriously degrading the performance of a
wide-area network;

Trust
The firm belief in the competence of an entity to act dependably,
securely, and reliably within a specified context.

• a system administrator violating user privacy;
• someone on the internet listening confidential electronic communi

Trusted framework
A certification program that enables a party who accepts a digital

cation.

identity credential (called the relying party) to trust the identity,

Third-party fraud

security and privacy policies of the party who issues the credential

Fraud committed against an individual by an unrelated or unknown

(called the identity service provider) and vice versa.

third-party.

Trusted third-party
Token

An entity trusted by multiple other entities within a specific context

Any hardware or software that contains credentials related to a

and which is alien to their internal relationship.

user’s attributes. Tokens may take any form, ranging from a digital
data set to smart cards or mobile phones. Tokens can be used

Two-Factor Authentication (2FA)

for both data/entity authentication (authentication tokens) and

Two-Factor Authentication is a security process in which the user

authorisation purposes (authorisation tokens).

provides two means of identification, one of which is typically a
physical token, such as a card, and the other of which is typically

Tokenization
The process of substituting sensitive data with an easily reversible
benign substitute. In the payment card industry, tokenization

something memorised, such as a security code.

U

is one means of protecting sensitive cardholder PII in order to

Unique identity

comply with industry standards and government regulations.

A set of identifiers/attributes forms a unique identity. Furthermore,

The technology is meant to prevent the theft of the credit card

an identifier, such as a unique number or any set of attributes, is

information in storage.

capable of determining precisely who or what the entity is.

Transaction Authentication Number (TAN)

URL spoofing

A type of single-use password used for an online banking

This is an attempt to closely mimic the URL of another website.

transaction in conjunction with a standard ID and password.

This makes the fraudulent website appear legitimate.

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WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

Glossary
User data verification

W

One of the first actions FIs take when onboarding a prospective

Wire fraud

new customer is verifying the individual’s identifying information

A financial fraud involving the use of telecommunications or infor

by comparing the data provided by the prospective customer to

mation technology.

third-party sources. While many countries’ anti-money laundering
requirements mandate the verification of specific PII elements,

3-D Secure 2.0

such as name, address, and taxpayer identification number, many

3-D Secure (3DS) is the program jointly developed by Visa and

issuers verify more than just the bare minimum dictated by com

Mastercard to combat online credit card fraud. To reflect current

pliance. While ecommerce merchants verify PII less frequently due

and future market requirements, the payments industry recognised

to cost constraints, many incorporate elements of digital identity

the need to create a new 3-D Secure (3DS) specification that would

verification into their risk protocols.

support app-based authentication and integration with digital
wallets, as well as traditional browser-based ecommerce trans

V

actions. This led to the development of EMV 3-D Secure – Protocol

Verified by Visa

and Core Functions Specification v2.0.0 (EMV 3DS 2.0 Specific

Verified by Visa provides merchants, acquirers and issuers with

ation). The specification takes into account these new payment

cardholder authentication on ecommerce transactions, by levera

channels and supports the delivery of industry leading security,

ging the 3-D Secure protocols. It helps to reduce ecommerce fraud

performance and user experience.

by ensuring that the transaction is being initiated by the rightful
owner of the Visa account. This gives merchants, acquirers, issuers
and consumers greater protection on ecommerce transactions.

Vishing
The act of using the telephone in an attempt to scam the user into
providing private information that will be used for identity theft.
The scammer usually pretends to be a legitimate business, and
fools the victim into thinking (s)he will profit.

Voice authorisation
An approval response that is obtained through interactive commu
nication between an issuer and an acquirer, their authorising pro
cessors or stand-in processing or through telephone, facsimile or
telex communications.

Voice over IP (VoIP, or voice over Internet Protocol)
Refers to the communication protocols, technologies, metho
dologies and transmission techniques involved in the delivery
of voice communications and multimedia sessions over Internet
Protocol (IP) networks, such as the internet. Other terms commonly
associated with VoIP are IP telephony, internet telephony, voice
over broadband (VoBB), broadband telephony, IP communications
and broadband phone.

250

WEB FRAUD PREVENTION, IDENTITY VERIFICATION & AUTHENTICATION GUIDE 2018-2019

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For the latest edition, please check the Reports section

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