In the past, you could get by with one-size-fits-all fraud modeling. Not so much anymore.
Today’s fraudsters operate with a high level of sophistication. Using underground networks, they can defraud companies across the globe, 24/7, from the comfort of their home.
Plus, they are taking cues from the mainstream, especially the trend toward automation. This new reality has ushered in the importance of using customizable fraud models.
Of course, any fraud solution you choose should be adaptable for your business case. Examples include: your transaction types, customer profiles, and which regions you operate in.
Here are some other elements to consider in your fraud modeling.
Combine: Network intelligence
This one is huge. Fraudsters have no regard for industry or region, so why should you? Network intelligence offers a holistic view of the space you operate within.
But not all networks are equal. It’s important to differentiate siloed networks against those which rely on crowdsourced data.
Operating in a siloed network will only get you halfway there. Fraudsters rarely only focus on one merchant, industry or vertical.
There are a lot of benefits in knowing what your peers are facing. Intelligence around fraud events allows you to identify risky behaviors faster. Then, you can react before they become a problem. There’s a flip side, too: the same process works with legitimate customers. When you can identify positive behaviors, you can approve them quicker.
Construct: Custom fraud modeling
Crowdsourced data gives you a much wider operational view of things. It also provides more elements for mapping custom fraud models. These models help you analyze industry and peer trends against your own transactions.
So, when choosing a provider, make sure you assess the ability to offer customized models. The next step is adding machine learning capabilities to update those models in a real time.
This provides more robust fraud prevention controls on both ends. You can identify (and stop) relevant trends, patterns and behaviors. As with network intelligence, this process applies to good customers.
Customize: Specialized fraud modeling
We’ve covered the power of network intelligence and custom modeling. To face today’s threats, you have to take it to the next level: specialized fraud modeling.
Specialized fraud modeling is exactly what it sounds like. It’s the process of creating unique models to score your unique transactions.
Here’s how it works: Network and industry events are inputs for customized fraud modeling. Then, with this intelligence, you can develop specialized models for your business.
The benefits of this approach are twofold. You’re getting the best outside data and utilizing it in a way that’s specific to your business.
At Emailage, tying these elements together is a core focus of ours. We’ve made very deep investments in decision science. Why? Because we view it as the only way to provide direct, customized support to our customers.
Every day, our decision scientists engage in customer calls. We don’t keep them locked in a side office. You can find them seeking frontline feedback, advising around modeling or suggesting rules. Together with our fraud specialists, they refine our predictive risk scoring to be the best it can be.
This layered approach allows us to build individual models that fight back at the growing threat today’s fraudsters pose.
Click here to discover how custom modeling can supercharge your risk engine