Identity fraud threats continue to rise in today’s transforming digital landscape. Identity fraud jeopardizes a company’s financial health, regulatory compliance, and trustworthy reputation. Increasingly prevalent and complex identity fraud threats require identity fraud detection and prevention software to continuously adapt and improve strategy.
However, certain types of prevention strategies within software solutions can add unnecessary friction to the user experience, negatively impacting acceptance and retention rates and ultimately revenue. When analyzing identity fraud detection and prevention software, keep in mind the ability of the solution to drive revenue, stop fraud, and ensure compliance, all while maintaining a positive customer experience with minimal friction.
Consider this your guide to learning the basics of identity fraud and prevention software, why it’s important, and key factors for maximizing revenue while minimizing risk.
What is Identity Fraud Detection and Prevention Software?
Identity fraud detection and prevention software monitors, evaluates, and prevents fraudulent new applications for credit or services and transactions. The best identity fraud detection and prevention software maximizes revenue, stops fraud, improves reputations, and streamlines the user experience. However, not all identity fraud software solutions deliver the same results.
Traditional computer application software requires users to download the application into their own systems, enabling users to access their own streams of data to identify and stop fraud. However, these applications tend to struggle with the lack of a cross-industry data network required to prevent identity fraud effectively and the ability to orchestrate analysis and insights for different types of identity fraud, leading to additional expenses for maintaining and optimizing the application.
Software as a service (SaaS) identity fraud solutions offer companies access to sophisticated machine learning models that provide immediate, actionable results. Additionally, customers of SaaS identify fraud solutions gain access to other participants’ data so that they can make even better decisions, especially for consumers that are new to them. By taking on the price of maintenance, optimization, and entity resolution, and by accessing a network of cross-industry data, companies benefit from the wide breadth of features without internalizing the costs.
And, this includes access to a wealth of identity fraud data and years of established expertise. For example, while an attack may be new to your company, an identity fraud detection and prevention SaaS solution has likely already seen and learned from the attack elsewhere in their network.
Why is Identity Fraud Detection and Prevention Software Important?
In 2022, identity fraud resulted in the loss of $43 billion in revenue. Companies proactively save themselves from contributing to the next statistic by using identity fraud detection and prevention software.
Aside from maximizing revenue, leveraging external identity fraud software reduces the need for companies to comply with several national and state identity verification compliance regulations, including but not limited to:
- General Data Protection Regulation (GDPR)
- Payment Card Industry Data Security Standard (PCI DSS)
- Consumer Privacy Acts
- Electronic Signature in Global and National Commerce Act (ESIGN) procedures
- UN’s Security Council Resolutions
Certifying that outside third-party vendors meet their required regulations and standards presents several benefits for both businesses and customers, including:
- Early detection and prevention of identity fraud incidents
- Reduction of financial losses and operational costs
- Enhanced customer trust and brand reputation
- Compliance with industry regulations and data protection laws
- Streamlined and efficient identity fraud detection processes
- Improved overall security posture and risk management
- Customer Acquisition Growth
Considering the changing landscape of national and global compliance regulations and the hefty fines for breaking compliance, these benefits will continue to grow.
Lastly, identity fraud detection and prevention software empowers companies to build and maintain a trustworthy reputation.
What is Real-Time Identity Fraud Detection?
In today’s fast-paced and digital environment, identity fraud can happen in the blink of an eye. In order to detect and prevent these harmful transactions from causing damage, SaaS solutions leverage risk scores, validation processes, and accurate false positive rates all in real-time. Unlike other identity fraud detection protocols, real-time identity fraud detection software uses advanced machine learning models to actively flag suspicious activity as it’s happening. This action blocks the completion of fraudulent transactions, which eliminates the need to recover stolen funds and allows investigators to dedicate more focus to locating and prosecuting the individuals behind fraudulent attacks.
Take, for example, the process of determining whether a credit card purchase occurred within or outside of the typical behaviors that the user follows. With fraud detection algorithms in place, potentially fraudulent incidents get flagged immediately, preventing the activity from completing.
In one situation, a user might make 99% of his or her credit card purchases from a given zip code, and when that same account makes a purchase thousands of miles away, this behavior is outside the realm of the user’s usual behavior, which may flag the purchase for potential fraud.
Socure Identity Fraud Detection and Prevention Features and Benefits
Socure’s identity fraud detection and prevention software leverages an advanced ML model with the largest identity graph and set of performance feedback data in the industry. With a high capture rate and low false positive rate, Socure improves the customer experience for non-fraudulent users while ensuring fraudulent activity gets stopped. For example, Socure reduces manual review and customer friction by 80%, combined with a 13x reduction in false positives.
By analyzing every dimension of consumer identity rather than a single pathway for determining user authentication, Socure captures 90% of fraud in the riskiest 3% of users across the entire digital customer life cycle. Let’s explore the features that make Socure the best identity fraud detection and prevention software on the market.
Multi-layered Identity Verification
Socure delivers the most accurate ID fraud classification model in the industry, verifying the largest number of good customers and substantially reducing manual review rates. By passively assessing large volumes of users, multi-layered identity verification focuses friction only on the riskiest users, driving down false positives and increasing auto-approvals. Potentially fraudulent users get flagged for additional verification techniques to confirm user identities more rigorously, reducing fraud losses. Because Socure checks several identifying components and compares them against established valid data, fraud attempts have fewer opportunities for success when user data doesn’t match up in every measurable way.
Risk Scoring and Decisioning
Socure leverages comprehensive risk scores to predict the risk of the most common fraudulent dimensions: email, phone, and address. While utilizing different features, each risk score returns a value between 0 to 1 that indicates the strength of the relationship between the presented name and the dimension.
- Email RiskScore: 60+ email-specific features including email validity considering unusual string patterns, email domain mismatches, email-to-name mismatches, and more.
- Phone RiskScore: 87+ phone-specific features including numbers with dummy values, invalid area codes, IP phone numbers, phone service types, porting, age, and more.
- Address RiskScore: 40+ address-specific features, including suspended mail activity, zip code for P.O. box, commercial address, military address, and more
Socure’s RiskScores help companies prevent several types of identity fraud including account takeovers (ATO), peer-to-peer (P2P), and fraudulent one-time password (OTP) efforts.
In addition to providing highly accurate RiskScores, Socure provides a Correlation Value with each. Correlation Values identify if an identity element, such as a phone, address, or email has been used previously by the consumer who is applying for credit, making a non-monetary change to their account, receiving an OTP to validate an account change or transaction or making a P2P transaction.
Socure also specifies the type of identity fraud being used in each scenario, such as synthetic, third-party, or first-party fraud. Without this information, companies struggle to determine the next steps to address the fraud, because different types of identity fraud require different solutions. By going a step further than risk scores and detailing the exact type of fraud, Socure empowers companies to effectively address identity fraud in the best way possible.
Along with risk-scoring techniques, Socure’s no-code platform makes changing policies and reevaluating scores quick and straightforward. Socure hosts and manages the entire decision process, which not only streamlines risk management but saves time and eliminates IT overhead.
Socure integrates with many existing systems that businesses already use. By making integration as simple as possible, Socure aims to put powerful fraud prevention capabilities into the hands of users. Socure’s platform provides a centralized location for every aspect of identity fraud prevention and detection, including risk scores, compliance, identity verification, document validation, and custom decision workflows. Instead of orchestrating each aspect individually, Socure makes it easy to manage identity fraud holistically and in a user-friendly platform. Socure also takes on the cost and responsibility of maintaining security audits and certifications, obviating the need for companies to undergo annual security audits and manage several vendors at a time.
Scalability and Flexibility
With a single API for all products, Socure’s platform offers a flexible and centralized location for different types of identity fraud detection and prevention. The individual products available through Socure can be easily added or subtracted from user plans, enabling companies to scale security protection as needed.
For companies looking to take advantage of customization, Socure offers custom building and orchestration through the innovative, no-code Decision Module. This option empowers companies to simulate, optimize, and automate customer decisions to align policy with the process, provide demonstrable controls, and scale growth without compromising compliance.
Trusted by 1,900+ Top Companies
Socure’s revolutionary identity fraud platform is trusted by more than 1,900 companies to drive revenue, stop fraud, and improve the customer experience. Utilizing every element of identity and natively orchestrated by advanced ML, Socure maximizes accuracy, reduces false positives, and eliminates the need for disparate products.
Discover how Socure helped Dwellsy increase fraud capture by 464% combined with a 90% increase in auto-approvals for ‘good’ applicants.