The Comprehensive Guide to Web Fraud Prevention, Identity Verification & Authentication

According to the The Paypers, identifying fraudulent behavior without alienating customers is crucially important for companies conducting business online. The Web Fraud Prevention, Identity Verification & Authentication Guide 2018-2019, released in December, looks at the security challenges involved in financial and eCommerce operations in the online, borderless economy, and how fraud and risk management professionals can meet such challenges.

As noted, online customer acquisition programs must strike a balance between meeting the needs of providing legitimate customers with a seamless onboarding experience, on the one hand, and preventing bad actors from exploiting security vulnerabilities, on the other. Systems that are too onerous will drive customers away to more user-friendly services while systems that lack appropriate fraud prevention and risk mitigation measures will expose the organization to regulatory fines, monetary losses, and, inevitably, reputational damage.

Opportunities and vulnerabilities go hand in hand

The opportunities from online business are, of course, immense. Globally, over 4.8 billion people have mobile phones; whether she is in New York, Nairobi, or New Delhi, the customer is now transacting online; indeed, easy and ubiquitous access to the internet is leading to a remaking of the world economy.

However, the sheer scale of transactions taking place online every second, presents unprecedented opportunities for bad actors. As technologies develop at an exponential rate, criminals, too, are cottoning on to sophisticated methods to commit fraud and launder illegally obtained money. The same factors that make online business a huge draw for customers and merchants, also invite the attention of bad actors. Personally Identifiable Information (PII) obtained from data breaches, malware, phishing, and other techniques, enable fraudsters to pose as real customers, or create synthetic identities that seem real.

The Paypers’ guide looks at these problems and considers some best practices from industry leading players. For obliged entities, such as banks, financial services and online marketplaces, among others, these solutions are not only critical to reducing fraud, they are a compliance requirement. The guide considers the key solutions that enable organizations to minimize risks relating to fraud and oversights in regulatory compliance. It examines fraud detection, identity verification and online authentication solutions that obliged entities can deploy to keep bad actors at bay, meet compliance requirements whilst still supporting user-friendly onboarding experiences for their customers.

As Zac Cohen, General Manager, Trulioo, who is one of the contributing authors of the guide, writes, “the success of both customer due diligence (CDD) and fraud prevention programs hinge on a critical factor: Identity Verification.”

International expansion: Fraud, compliance and regulatory considerations

The problems outlined above only seem to magnify when organizations explore new markets. In his piece, Cohen writes about the barriers that obliged entities face in rolling their services out to new markets, particularly emerging markets which lack robust identity infrastructures.

When it comes to highly competitive and fast-growing companies, it becomes imperative to move quickly and capture as much market share as possible. For these companies, it becomes essential to have an identity verification process that can scale quickly, efficiently, and cost­effectively. In order to do that, these companies need access to a variety of trusted and reliable data sources; but, as it happens, the data that is being sought to verify the identity of merchants in these markets is often available exclusively with local data vendors.

Given these limitations, how can organizations verify identities, and, in effect, meet compliance requirements, prevent fraud, and onboard customers in new markets? What have organizations done historically, to scale into new markets while adhering to complex regulatory requirements? What has changed since, and what are leading organizations doing now?

Featuring expert pieces from thought leaders, compliance experts, and some of the most authoritative voices in fintech and RegTech, The Web Fraud Prevention, Identity Verification & Authentication Guide 2018-2019 explores the aforementioned challenges in vivid detail and offers instructive insights on how to overcome them.

Download the full report here.