Fraud leaders are pulled between two tensions: preventing fraud and supporting the friction-less transaction experiences consumers demand today. To achieve this, fraud teams need dynamic, global tools that evolve as fast as fraud tactics. This page will provide background on why the dynamic tool you need to put at the center of your fraud prevention strategy is staring right @ you: the email address.
Email is a rather remarkable tool in the two pronged approach fraud leaders must take to meet organizational objectives around reducing fraud and growing the business.
There are more than 4.6 billion email accounts with 2.7 billion users. A staggering ninety-one (91) percent of users reported using the same email for more than three years and 51 percent using the same email for 10 years or more. The power email addresses leverage to identify and prevent fraud is astronomical because of the history of transaction data, engagement and behavior history each address has.
Costs & Opportunities
A commonly accepted number for fraud prevention spend is three dollars invested to prevent a single dollar of fraud. The manual effort associated with fraud prevention makes the process costly internally. And, on the other side of this coin, the high-friction fraud controls created for customers lead to cart abandonment, which can cost more in lost revenue than the fraud itself. To satisfy risk management objectives and support client experience demands, email offers a dynamic advantage that scales.
Brief Email History
From the time Ray Tomlinson first used the @ symbol to communicate between computers, to the advent of free, unrestricted email addresses in the mid-nineties, email has exploded as a communication medium now woven into the very fabric of society. Email’s humble beginnings as a tool used primarily by the Department of Defense exploded in the mid-nineties as web-based email applications like RocketMail, Hotmail and later Yahoo! launched. Quickly following came the first B2C ecommerce. The migration to the digital world continues to evolve to this day, and at a breakneck pace. No industry, segment or business is exempt from participating in the digital world without email. In 2019 alone, 293.6 billion emails were sent globally per day. Social media and company instant messaging may be on the rise, but email still reigns supreme. The dynamic information now linked to customers’ email addresses, spanning more than 30 years, is immense.
Tale as Old as Time
In the rapid evolution of the digital world, fraudsters evolved, too. As ecommerce took hold, fraudsters began taking advantage of fledgling companies’ unsecured transactions and data. Criminals emboldened by the anonymousness of the online world exploited consumers the instant the first transactions were completed online. Slaying fraud while staying out in front of emerging threats burthed the role of fraud prevention teams. However, fraudsters only become more sophisticated as the technology advances.
Fraud Types and Terms
Traditionally, fraud prevention teams have used static data to mitigate fraud risk. In today’s world where easy, one-click transactions are expected by consumers, fewer and fewer applications require the use of this data. A customer may use his or her social security number perhaps once a year for loan and credit applications, but email transactions are completed at a rate of multiples per day. The sheer volume of pings on a customer’s email provides a vast opportunity for fraud detection. Email is linked to IP addresses, phone numbers, domain names and more. It is paramount to identifying who and where your customer is, what their buying habits are, what sites they visit, what locations they frequent – think of this information as digital DNA. Knowing who is behind a transaction can pinpoint fraud in real time. Email can provide a dynamic, global, and virtually real-time data set in which fraud prevention teams can detect, confidently identify and mitigate fraud. The vastness of the data is both a blessing and a curse; harnessing the fraud detection power of this data without the right tools is virtually impossible.
The use of email data to detect and identify fraud is also paramount to scaling your business safely. As our economy becomes more global by the minute, businesses need data points that are physical location agnostic. Email is the global passport: it can be accessed anywhere your customer can connect to the internet providinga globally-expansive data set that exists irrespective of physical location. Email is agnostic of nationality, unlike static data such as phone number and physical address, it knows no borders. What’s more, email data when viewed in conjunction with transaction history, can provide financial services companies with information to make confident decisions about account openings and lending. In the United States, the consumer credit system is formalized through bureaus and credit scores. In many other countries around the world, credit systems aren’t as formal or don’t exist at all. For these regions, understanding email risk and getting a view to a database with shared transaction history can be effective as a highly-predictive data point to evaluate good customer transactions and applications.
As your business expands, you need global data to help keep your customers safe and protect your company from fraud risk. In 2019, the retail industry alone spent $3.13 for every $1 of fraud. This rate is not scalable for any business looking to expand into new markets or diversify its offerings. Targeting fraud risk before it occurs is the key to safely scaling your business. This is difficult to assess without a data model that puts email at its core. Fraud teams relying on static data to pinpoint fraud are only seeing a drop in the bucket. Email data creates connections that allow businesses to mitigate threats to their customers and the future growth of their companies.
Case Study: Traveloka
Southeast Asian travel company Traveloka had global expansion aspirations. They were a large player in the space with more than 40 million app downloads. The company relied on phone numbers to authenticate new accounts but found that unwieldy due to the popularity of pre-paid mobile phones in the region. In order to get a handle on customer verification, Traveloka needed a data point more dynamic than phone numbers: enter the email address. Traveloka leveraged the Email Risk Score tool to provide frictionless new account verification that fueled increased growth.
Leveraging the Tools
While the data available through email is vast, analyzing it in a meaningful way in order to achieve fraud detection success requires a sophisticated, ever-learning approach. Emailage developed the Email Risk Score on a global network powered by real-time fraud feedback, machine learning and a team of expert data and decision scientists to unlock email’s potential as a fraud detection super weapon. This tool allows companies to detect fraud with high-accuracy and at scale, while simultaneously identifying quality customers and providing the frictionless transaction experiences today’s consumers expect. The who and where behind the transaction is identified meaning Emailage customers can reduce manual verification and speed authentication.
Case Study: New Account Fraud
A financial services client began to see a wave of new account openings with enumerated emails. This type of fraud is time consuming for fraud prevention teams to identify and track because the emails can appear legitimate. The time-consuming process of validating each email is burdensome. Harnessing the power of Emailage’s Email Risk Score, the client was able to identify 100 percent of the fraudulent new accounts while saving fraud analysts more than seven hours a week in manual identification time.
Emailage is a leader in fraud management services with solutions tailored to myriad industries. Our Knowledge Hub is home to a wealth of content, case studies and research that supports the proficiency of our fraud management tools and services. Across industry and segment, Emailage data proves time and again, putting the email address at the core of your fraud risk management strategy saves time, protects your company, keeps your customers safe, and helps your business deliver on the transaction experience standards today’s customers demand.
The dynamics of business in a digital world are complex. Finding the balance between the needs of your customers, their security and deterring ever-evolving fraud tactics can be delicate. There is no going back to a cumbersome validation process that creates friction – that would be a sure fire strategy for losing customers to competitors who can offer seamless experiences. Yet as fraudsters become emboldened and equipped with new technology and tactics, fraud management leaders are more hard pressed than ever to stay ahead of detecting and preventing fraud events. Risk management strategies should focus on organizational outcomes and have cross-functional shared goals that mitigate risk and deliver on customer experience initiatives. To do this, businesses need to make smart investments in their fraud prevention tech stack. Using the power of today’s global passport, the email address, helps give you visibility and intelligence so your fraud management team can make confident risk decisions that save your business time and reduce the cost of fraud.