This pioneer peer-to-peer (P2P) online lender serves a full range of investors, from large institutions to 12,000 individual retail investors. It’s P2P business model relies on ultra-efficient, streamlined automation in order to maximize ROI. The lender must have absolute faith in the efficacy of its fraud prevention systems in order to minimize instances of fraudulent loan applications.

With ThreatMetrix, this online lender can accurately determine the level of risk for each online loan application. This has allowed the company to offer variable interest rates according to the customer profile. It can therefore:

  • Offer loans to the unbanked and underbanked population
  • Offer more competitive interest rates to the lowest risk customers
Business Problem

Niche and alternative finance providers are key targets for fraudsters looking for ways to capitalize on new money lending models. The online environment provides the perfect level of anonymity for cybercriminals looking to test stolen or spoofed credentials. Likewise, the fast loan approval times put the onus on this online lender to really know who it is transacting with in order to safeguard the integrity of the platform.

“ThreatMetrix is really the top of the funnel for us in terms of fraud prevention. It has provided another layer of protection in automating the discovery of fraudulent accounts. This removes the burden and risk of manual intervention.”

The lender needed a way of combining the static identity assessment data it sourced from credit bureaus and other agencies, with dynamic, real-time data about the connecting user’s device, location and behavioral profile.

One of the key challenges it faced was the wide diversity of its investors, from large institutions to individuals looking to make a good return on their investment. Tolerance for fraud varied widely across this investor base, with larger companies more accepting of some degree of fraud in comparison to individual investors. The lender had to ensure it could preserve the rate of return for all customers, however large or small.

“The ThreatMetrix solution is an organic platform that actually protects us as we grow and change. This is reflected in the way that it continues to learn and improve over time.”

Leveraging Digital Identity Assessments to Enhance Fraud Detection

This online lender’s business model relied on robust automation that could speed the loan approval process while accurately detecting fraudulent or high risk applications. The ThreatMetrix solution passively authenticates application in real time using intelligence from the ThreatMetrix Digital Identity Network, eliminating unnecessary friction and maintaining a streamlined online experience.

The Power of Shared Intelligence

The ThreatMetrix solution is underpinned by the ThreatMetrix Digital Identity Network which harnesses global shared intelligence from millions of daily consumer interactions including logins, payments and new account applications. Using this information, ThreatMetrix creates a unique digital identity for each user by analyzing the myriad connections between devices, locations and anonymized personal information. The lender could understand the complete context of every loan application so that suspicious behavior was detected in real time.

Digital Identities are created by combining the following key intelligence:

  • Device profiling – Device identification, device health and application integrity, as well as detection of location cloaking or spoofing, (proxies, VPNs and the TOR browser).
  • Threat intelligence – Harnessing point-in-time detection of malware, Remote Access Trojans (RATs), automated bot attacks, session hijacking and phished accounts, then combining with global threat information such as known fraudsters and botnet participation.
  • Identity data – Incorporating anonymized, non-regulated personal information such as user name, email address and more.
  • Behavior analytics – Defining a pattern of trusted user behavior by combining identity and transactional metadata with device identifiers, connection and location characteristics. Every event can be analyzed in the context of this behavior pattern and historic context globally.
Long-Term Success

The lender’s pioneering approach to online, peer-to-peer lending has been supported by the following key ThreatMetrix capabilities:

  • ThreatMetrix Smart ID helps recognize a returning device even when cookies are deleted/disabled. Derived from the analysis of many browser, plug-in, and TCP/IP connection attributes, Smart ID generates a confidence score that helps the lender to identify when fraudsters are using the same device to apply for multiple fraudulent loans.
  • ThreatMetrix Trust Tags enable to differentiate between fraudsters and legitimate users. Trust can be associated dynamically with any combination of online attributes such as devices, email addresses, card numbers or any other attributes involved in accepting, rejecting or reviewing a loan application.
  • ThreatMetrix deep connection analysis technologies give a clearer view of suspicious events. Fraudsters often attempt to hide behind location and identity cloaking services such as hidden proxies, VPNs and the TOR browser. ThreatMetrix accurately detects the use of these technologies and, in the case of proxies and VPNs, allows the lender to see the true IP address, geolocation and other attributes of each event.

“ThreatMetrix has been a great partner for us. Using their Digital Identities, we can confidently verify a new customer and give a loan approval in minutes, as part of a fully automated process.”

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