ThreatMetrix Announces Fraud Prevention Trends for 2011
Posted January 3, 2011
Device Fingerprinting and Mobile Transactions Were on the Rise in 2010; ThreatMetrix Identifies the 2011 Outlook for These and Other Hot Topics in Fraud Prevention
LOS ALTOS, CA. – January 4, 2011 – ThreatMetrix™, the fastest growing provider of fraud prevention solutions that do not require personally identifiable information (PII), has outlined major industry trends and predictions moving into 2011.
According to Alisdair Faulkner, chief products officer, ThreatMetrix, the online fraud market today is where the spam and anti-spam market were 10 years ago.
“In the fraud prevention industry we saw a lot of changes in 2010, notably in the rapid growth of e-commerce greatly outpacing the use of fraud prevention technology to protect online transactions,” said Faulkner. “This opens new doors for fraudsters, exposing different gaps in fraud prevention measures that can only be rectified through new and more relevant solutions.”
To this end, 2010 was the first year that device fingerprinting became mainstream. Mobile transactions also became material in volume; while transaction activity is still only around 1%, for large retailers that see millions of transactions that could amount to hundreds of thousands of dollars.
ThreatMetrix outlines other key trends in fraud prevention moving into 2011:
1. Less Reliance on Cookies and Personally Identifiable Information (PII). Many fraud prevention solutions are being rendered ineffective as more consumers become concerned with online privacy. It’s harder to detect repeat visitors – and repeat fraudsters – as they are either deleting or blocking cookies themselves, or having cookies deleted via their computer security software. As such, a move toward cookieless device identification and device fingerprinting is becoming critical in preventing fraudulent transactions today.
2. New Classes of Devices Become Commodities for Fraudsters. New devices, like smartphones and tablets, showcase different operating systems and browsers unlike the standard PC. These potentially compromised devices are ultimately becoming commodities. The user can hide their IP address and thus eliminate the possibility for an online retailer to detect the source of a transaction.
3. Use of Fraud Prevention Solutions Across the Entire Value Chain. Today’s fraudsters are smarter and the necessity for fraud prevention will continue to persist in the e-commerce space as well as the entire value chain. Online brands will use fraud prevention software in detecting everything from automated bad reviews on their site, to account creation and account verification issues, in addition to monitoring transactions.
4. Rise of Online Services and Digital Goods Encouraging Fraud Automation. Online digital goods, like those obtained through Netflix, Groupon, Ticketmaster, and Facebook, have consequently propelled the need for real-time transactions – which are often a hotbed for online fraud automation. The first generation of e-commerce, popularized by Amazon.com, was all about shipping physical goods. With the instant gratification associated with digital goods and services, however, fraudsters have the capability to automate fraudulent transactions. “Now online services and virtual goods are the equivalent to the Wild Wild West in terms of fraud,” added Faulkner. “There are bandits out there, and retailers need to know how to defend themselves.”
Moving into 2011, new fraud prevention solutions will reflect these changing consumer behaviors and more advanced fraudsters, according to ThreatMetrix.
With the introduction of the Fall 2010 release of the ThreatMetrix Fraud Network, ThreatMetrix has enhanced businesses ability to detect returning visitors based on the attributes of the device – be it a smartphone, personal or tablet computer – without using any cookie information and has improved rules to use this information to detect spoofed devices and IP addresses as well as sniff out botnets.
To read more on the Fall 2010 release of the ThreatMetrix Fraud Network incorporating ThreatMetrix SmartID visit: https://www.threatmetrix.com/the-threatmetrix-fraud-network-fall-2010-release
“Every business that transacts on the Internet needs better automated fraud prevention that doesn’t rely on cookies or personal identifiable information,” said Faulkner. “2011 is the year that technologies like device fingerprinting and collective fraud intelligence in the cloud become mainstream tools for web security and fraud professionals. When fighting a collective problem you need a collective solution. Trying to fight fraud prevention on your own is like trying to fight tanks with sticks.”
ThreatMetrix®, The Digital Identity Company®, is the market-leading cloud solution for authenticating digital personas and transactions on the Internet. Verifying more than 20 billion annual transactions supporting 30,000 websites and 4,000 customers globally through the ThreatMetrix Digital Identity Network®, ThreatMetrix secures businesses and end users against account takeover, payment fraud and fraudulent account registrations resulting from malware and data breaches. Key benefits include an improved customer experience, reduced friction, revenue gain and lower fraud and operational costs. The ThreatMetrix solution is deployed across a variety of industries, including financial services, e-commerce, payments and lending, media, government and insurance.
Tel: 650-625-1451, ext. 122