Why We Fight Fraud at the Edge of the Internet
BY NATE KHARRL
We do things differently at SpecTrust, and there’s a good reason why. My co-founder Patrick Chen and I spent the better part of our careers working with fraud defense teams at some of the largest brands in the world, this gave us great perspective on what isn’t working. While there are breakthroughs in fraud detection technologies every year, we know that the difference between good fraud defense and great fraud defense is driven primarily by where fraud is fought, not how.
The best place to fight fraud is at the edge of the internet.
Legacy Fraud Defense Infrastructure
To protect any given customer experience, fraud defense teams typically run this playbook:
- Collect data for key checkpoints in the customer journey
- Get additional information from third-party fraud data vendors
- Deploy defenses against a well-defined fraud pattern
This is painting with broad strokes, but captures the gist of what is done to protect a given customer experience.
Why Do Fraud Defenses Fall Behind?
Fraud is a highly dynamic problem that requires you to adjust your defenses to keep pace with changes. Most commonly, these changes come from:
- Updates to the customer experience
- Evolving attacker tactics
- Fraud detection solutions that need to be updated or replaced
Fraud teams can stay on top of this continual evolution with legacy fraud defenses, but it requires support and prioritization from technical teams to keep everything running smoothly.
Modern Fraudsters Attack the Entire Customer Experience
Fraud has changed over the last decade. Today’s fraudsters have mountains of breach data, sophisticated no-code tools, and huge support communities that make it easy to launch sophisticated attacks.
Traditional fraud defense infrastructure gets more and more difficult to maintain as defenses are fragmented across the customer journey. Each customer experience checkpoint generates a specific kind of data and requires support from different types of fraud detection vendors. Adding more siloed checkpoints adds unsustainable complexity, so many parts of the customer journey go entirely unprotected.
Increasingly, the best fraud risk signals to protect a customer experience are sourced from a different checkpoint in the customer journey.
As an example, at a modern payment fraud checkpoint, that checkpoint doesn’t know that the account was one of thirty that the user logged into in the last week and that they recently changed their shipping address and contact details. This data is locked up in siloed fraud checkpoints elsewhere in the customer journey, or not persisted at all.
Getting data from the entire customer experience to accurately detect high-risk orders at the time of payment is incredibly difficult, but modern fraud dictates that it’s exactly the kind of data a successful fraud defense needs.
Fraud Defense at the Edge of the Internet
We needed to take the technical complexity out of defending against modern fraud attacks and make it easy for any business to protect their entire customer experience. This triggered a big re-think of where fraud gets fought. Instead of building defenses that have to be manually integrated across checkpoints, we built a solution to detect and defend against fraud at the edge of the Internet, close to the users themselves.
This approach is a big change from what the fraud industry has done for the last two decades. We’re assessing fraud and identity risk from outside the firewall and giving fraud fighters the ability to take action directly from our platform. From this platform, fraud defense teams have end-to-end visibility of the customer journey and access to internal and external risk data at any given checkpoint – all without having to write a single line of code.
Our approach is a big change from how the world has fought fraud over the last two decades and it has our users completely rethinking what fraud defense should look like. We think it’s about time.
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