Only a real-time solution can stop shapeshifting fraudsters

Ah, Christmas. The most fraudulent time of the year.

Unlike bad actors, the uptick in online shopping and transactions (and fraud) — compounded by supply chain shortages — doesn’t imbue cybersecurity teams with much holiday cheer. But one simple, yet monumental change can make all the difference: joining the real-time data revolution.

Data is ubiquitous. Fraudsters are smarter and faster than ever. Real-time data analysis is the only plausible way for businesses to protect their finances and reputations. Out with static, or historic, data (email, phone number, SSN); in with dynamic, up-to-the-minute data (user activity, IP address, device). This is the way.

Companies employing a static, traditional fraud prevention approach are prime targets for account takeover (ATO) and new account creation fraud, among other cyber attacks expected to cost $10 trillion globally by 2025. Not switching to a real-time solution will inevitably lead to a breach sooner than later — and it only gets worse from there.

There’s no time like real time

The irrelevance of historic data in preventing fraud is easy to explain: much of that information is already available on the dark web.

In the seediest corners of the internet, large-scale cybercrime syndicates operate like a fraudulent bodega, peddling users’ personal info for discounted prices. Static data such as names, dates of birth, addresses, mother’s maiden names, and the like is low-hanging fruit for the modern fraudster: plug and play, ammunition for credential stuffing or creating a synthetic identity. Some of these groups are sophisticated enough to enlist AI and machine learning experts to orchestrate breaches, and cunning enough to cook up new schemes, like loyalty point fraud.

Hackers are also benefiting from gargantuan data sets. The data is coming in droves, from all directions, and companies unable to analyze, much less access, dynamic data won’t detect fraudulent activity until it’s too late. Time is of the essence, especially with fraudsters closing the gap between account creation and fraudulent purchases. Delayed fraud detection means delayed remediation, and more dollars down the drain. But dollar signs aren’t the only consideration for pivoting to a real-time fraud prevention platform.

Leave historic data in the past

If a company doesn’t leverage real-time identity data, and is consequently infiltrated by bad actors, most higher-ups will naturally obsess over the immediate financial consequences. However, dealing with chargebacks is peanuts compared to what awaits further downstream.

Think about customer churn, and the army of angry ex-customers who will air their grievances across social media. The combined lifetime value of those lost customers plus the negative hit to brand reputation is not an endearing combination — and even the most seasoned crisis comms team may not fully right the ship.

Then, of course, are the fine-happy regulators who won’t be too thrilled to see another Equifax or Robinhood fiasco. Neither will investors, who are increasingly prioritizing businesses with air-tight threat intelligence. If a company, and its customers, are at risk, so is its valuation.

Adopting a solution that can harness real-time, dynamic data is the key to effectively preventing ATO and new account creation fraud. It provides the necessary adaptability to keep up with shapeshifting fraudsters and stop attacks before they happen — the only acceptable speed in today’s world.

Deduce’s real-time Identity Network, comprising more than 450 million anonymized user profiles collected from 150,000 websites and apps, preemptively alerts companies of fraud well in advance. Want to see how Deduce’s real-time solution can shore up your fraud protection? Contact us today.

Competing security companies can unite to fight fraudsters and still remain competitive

More data = more accuracy. This is generally a well-understood truth in any data-applicable field, from economics to medicine to machine learning. Fortunately, we live in an era awash in data; the abundance of data underpins the success of businesses across various industries — except in cybersecurity, where there is actually a dearth of actionable data.

Data poverty in cybersecurity is a profound problem for businesses and consumers. It means cybersecurity systems lack access to the grade-A data needed to effectively prevent the next enormous data breach. It means security systems lack the data insights to effectively identify insidious hacker patterns.

What’s the solution to the data poverty in cybersecurity? Data coopetition.

Data Coopetition: a Proven Model in Many Industries

Data coopetition is data sharing between businesses, even rival ones, to achieve a common goal. It’s an existing practice in several industries, for example:

• Casinos exchange intelligence on card counters.
• Rival software companies exchange data to make more money and improve the customer experience.
• Adtech businesses collaborate to deliver more effective brand campaigns.
• Healthcare providers exchange patient data, enabling doctors to accurately diagnose diseases and save lives.
• The FS-ISAC (Financial Services — Information Sharing and Analysis Center) is a consortium of 15,000 businesses in the financial sector collaborating to safeguard their respective institutions and customers from cybercrime.

Yet data coopetition is woefully absent in cybersecurity, the very mitigators of cybercrime. Why? The simple answer is competitive advantage: cybersecurity companies are reluctant to share data for fear of giving their competitors an advantage. However, as exemplified by other industries, data sharing isn’t a zero-sum game; actionable data can be exchanged in a secure and privacy-compliant way with the right solution.

Data Democratization on a Privacy-Compliant Basis

No cybersecurity vendor is data-rich. Sharing timely and functional behavioral data on cyberthreats benefits all vendors working to neutralize bad actors. For example, companies can exchange data on attack reports, which provide the code used to defend against an attack. Another example is sharing datasets of typical user behavior, such as how often they mistype their passwords, in order to identify anomalies in user patterns that indicate unauthorized access.

How can cybersecurity companies share data in a secure way that doesn’t compromise competitive advantage? Deduce was founded to address this data democratization opportunity. We created a data collective through which companies can share information about users’ security-related behavior and logins. In exchange for sharing data with the platform, companies get access to Deduce’s repository of identity data from over 150,000 websites, which is used to better detect suspicious activity and alert their users.

It’s Time to Shift the Cybersecurity Mindset

To protect businesses and their customers from fast-evolving fraudsters, the industry must shift its mindset — we have no other choice. Companies gain no competitive advantage by hoarding cybersecurity data. Even worse, it leaves everyone vulnerable. We need to think more along the lines of other industries that already realize the value of shared data. By adopting a collective intelligence model, cybersecurity companies have a fighting chance against hackers.

See Deduce in action! Click here to request a demo.

What you need to know about protecting your business and your customers from account compromises

Chances are, you’ve been a victim of account takeover fraud (ATO) in which one or more of your online accounts have been compromised.

It’s a sobering reality that online fraudsters are profiting hugely through hacking campaigns that target businesses and consumers alike. According to a recent report, the average cost of cloud account compromises has gone up to $6.2 million in the last 12 months. Javelin Research estimates that consumers pay an average of $290 for every successful ATO attack, and spend 15 to 16 hours working to resolve problems stemming from each attack.

The bottom line: account takeovers are now a critical threat to everyone. It’s time to fight back. Read on to learn the essential facts about ATO, and what you can do to protect yourself, your business, and your customers.

What is Account Takeover Fraud?

ATO, also known as account compromise, is a form of identity theft in which hackers take control of someone’s online account for financial gain.

There are many different kinds of ATO fraud, but the end goal is always the same: to hijack an account and use it for financial gain. Once fraudsters have gained control of an account, they can steal information, withdraw funds, make purchases, or use the account for other criminal purposes.

Types of Account Takeover Fraud

Online fraudsters employ various methods of ATO fraud, and they’re always innovating and testing new approaches. These are the most common types of ATO fraud:

• Credential cracking: hackers force entry by simply guessing users’ login details.
• Credential stuffing: using stolen credentials from one site to gain access to other accounts.
• Account creation attacks: new accounts are set up and used later for fraudulent purposes.
• Malware: malicious code such as keystroke loggers are used to silently capture a user’s login details.
• Mobile banking trojans: a fake screen is layered over a legitimate app to trick users into providing their login information.
• Phishing: bogus emails or texts lure users into either installing malware or providing their login details directly.
• Sim card swapping: phone number is ported to a new device to gain access to mobile accounts, especially mobile banking apps or other fintech services.

💡For more detailed insights on ATO methods, check out our comprehensive overview on account takeover fraud.

The Challenges of Detecting ATO Fraud

To detect ATO fraud, it’s important to detect both attempted ATO fraud (before an account is taken over) and ongoing ATO fraud (after an account is hijacked). This is no easy task, as it requires the ability to detect subtle nuances in human behavior, as well as the minute variances that creep in when an automated system or human bad actor attempts to pass themselves off as a legitimate user.

Individual businesses don’t have visibility into those processes at the scale that’s needed, as they rarely see enough traffic to successfully identify an attack or warn users.

ATO Prevention Strategies

The chief way to prevent account takeovers is to deploy both pre- and post-authentication security measures. This requires requires a deep understanding of the varied and rapidly evolving ways in which fraudsters try to gain access to online accounts, and an equally deep understanding of how such efforts differ from the ordinary behaviors of regular human account users.

What does it take to acquire such insights? Data sharing.

At Deduce, we’ve built a data coalition of over 150,000 member websites to help businesses stop ATO fraud before an account is compromised. Using AI tools trained on billions of historical interactions, we rapidly detect anomalous behavior — such as a login from an unusual geographic location — and automatically deploy appropriate security measures to prevent attacks before they begin.

Learn how Deduce can protect your business from the next massive data breach. Book a demo today.