Fraud scoring real time monitoring

Fraud Scoring – Real Time Risk Monitoring

Gabija Stankevičiūtė

A prevention and detection tool is designed around fraud scores to indicate how high or low fraud risks are. These risk detection solutions allow financial institutions and other businesses to ascertain if the parties they are dealing with are genuine or not. Since financial transactions between such parties are a complex process, there is a high probability of fraud. Hence, it is highly critical to understand and control how this process works to impact unexpected financial losses and security positively. One way to do so is through fraud scoring.

What is a Fraud score?

Fraud probability scoring will allot scores to a user based on their activity. The tools calculate the fraud scores depending on the underlying rules that define the user activity as low, medium, high, or very high risk. These user activities can be a transaction, or login and the rules check for the following parameters:

  1. Full name (this name used recently in the fraudulent transaction?)
  2. Address (e.g., customer’s address recently used for criminal activity)
  3. Phone number risk scoring (Is this phone number virtual, toll-free or real? Was it used recently in criminal activity?)
  4. IP Address (Was this IP address used in criminal activity?)
  5. Device fingerprint (e.g., this device has been recently used in criminal activity!)
  6. Payment details (if the payment card details were recently sold in black market? Or used within criminal activity?)

The vendors are assessed over:

  • Email (e.g.: when this email was created? What type of this email address, free or business? How many security features does this email address provider have?)
  • Security features
  • Timestamp
  • Type

The Scoring Model

The Fraud score model revolves around the risk scale from 0 through 99. The algorithm assigns a score to every transaction or event that shows its relative risk of fraud. A bank, financial institution, or business can use this scale to prioritize their reviews of different transactions depending on their risk. It allows them to execute real action depending upon the risk group to eliminate queue size and control the investigator’s review time.

The following are the three risk levels depending on the score:

  • High Risk: The “Code Red” of fraud score meters. It means the company must take immediate action against the party in question.
  • Medium Risk: The meter shows no strong indication of positive or negative outcome. The institute has to verify the customer’s identity with a quick identity verification.
  • Low Risk: The transaction has the lowest possibility of fraud and lets the proceed with an order.
Reinforce your business with “iDenfy shield” – fraud prevention package. Book a demo here.

What are the Benefits of Fraud Scores?

The American Express Digital Payments Survey in 2019 found that 27% of the sales always ended up as fraud transactions. Fraud scores offer sample benefits to the way any business or financial institution can implement risk detection tools in their service. They are:

Complete automation: once implemented, fraud scoring can check each transaction and assign them values. Based on the value, it can approve, review or deny the transaction. In addition, the admin has the right to review each transaction and check actions on indecisive results.

Dynamic authentication: Fraud scores allow the user to add an extra safety layer with a trigger. If the system finds a new user risky, it can trigger an additional authentication process like a selfie ID or two-factor verification to confirm their identity.

Flexibility in risk mitigation: Once the company has a fraud score of a particular customer, the company has the power about how they want to manage the risk that the client poses. The company can devise a system according to various scores and implement it at once for current and future clients.

iDenfy Introduces Its Fraud Scoring

iDenfy understands the need for fraud detection and scoring to reduce fraudulent transactions. The company’s new fraud scoring tool can scan databases that include the black market data to produce risk scores for a potential customer. Once the system measures different details about the customers, it can detect fraud patterns to help businesses prevent unwelcome transactions.

Assess the risk score of your customer. Discover more here.

Here are a few examples of how iDenfy’s fraud scoring will help different sectors:

Banking and Insurance Frauds

The banking sector has always struggled with fraud on a daily basis. It was the same story before computers arrived and grew after the world digitized. With fraud scoring, the banks can perform total digital footprint analysis so they can block customers who use stolen or fake identity. They can even cut down false account creation and prevent money laundering rings without incurring any cost on authorized users.

Apart from fighting against fraud, secure login authentication stops account takeover without hampering the user experience. Once the bank combines fraud check measures with Know Your Customers tools, it can steer clear of regulatory fines.

Online Gaming

Using fraud scoring, online gaming platforms can offer a secure playing arena to gamers without spoiling their gaming and overall experience. The platforms can remove bad players, threats, and other attacks that will ensure more legit players keep coming in. The fraud scoring methodology allows a business to automatically detect and remove fake accounts using digital footprint analysis. It allows removing players who use fake IDs and stopping multi-account conspiratorial play.

eCommerce Fraud

Businesses can use fraud scoring to reduce chargeback overheads and increase turnover. Fraud scoring is a great doorkeeper for online stores that allows business owners to mitigate fraudulent attacks and safeguard legitimate customers.

Business owners can now prevent payments through stolen cards or other details and stop unauthorized transactions beforehand. On top of it, fraud scoring can also help businesses detect fake accounts and prevent misuse of promos and gift coupons. 

iDenfy offers an effective fraud scoring system that enables businesses and financial institutions to check their customers for fraudulent activities. Once companies acquire this power, they can minimize the monetary and reputation damage that fraudulent transactions cause every day. Book a demo here today!