Harmonizing Defense: The Power of Data Orchestration in Fraud Prevention

When fraudsters are sizing up financial institutions’ defenses, they look for many points of attack. To keep them out, fraud fighters need to look at the entire customer lifecycle to separate good customers from fraudsters. Of course, gathering insights on each potential attack point takes time, resources, and most importantly, data. When any of these components aren’t organized, data especially, fraud can easily slip through the cracks.

Enter data orchestration—a strategic integration and management of data that acts as the linchpin in the fight against fraud. Understanding its benefits comes from first knowing the risks of fragmented data and the best ways to orchestrate data, which we’ll cover below.

The Fragmented Data Landscape

Many institutions’ current data landscapes put information into silos. This leaves their larger data picture looking like a fragmented puzzle, with pieces scattered across various sources and channels. Vital information is disconnected, hindering fraud teams’ ability to form a comprehensive understanding of potential threats. In this disjointed environment, fraudsters exploit the gaps, slipping through the cracks of traditional, isolated fraud prevention systems.

Linear data approaches analyze data in a sequential, one-dimensional manner. A key failure is that this leaves an institution unable to see the interactions between data points from different places in the customer journey. One common example is an inability to detect sophisticated fraud schemes using coordinated, multi-channel attacks.

Consider a scenario where a fraudster employs a combination of tactics across various channels to mimic legitimate behavior. The steps might look something like this:

1. Fraudster gains unauthorized access to a user’s account through phishing or credential stuffing.
2. Fraudster imitates that legitimate user with the stolen information to create a new account.
3. Fraudster makes small, seemingly innocuous transactions to avoid raising suspicion, gradually increasing the amounts over time.

In a linear data approach, each of these activities is analyzed separately, and anomalies or suspicious patterns may not be immediately apparent. Account takeover detection might spot the initial account takeover only if it triggers a sudden change in user behavior or login location. Traditional identity verification measures may not immediately flag the new account creation because the stolen information appears legitimate. Small, incremental changes in transaction amounts may not trigger alarms since they fall within the normal range of variability.

It quickly becomes clear that each of these activities, when examined in isolation, is designed not to raise sufficient suspicion to trigger a fraud alert. Because linear approaches often lack the ability to correlate these events across different channels, the fraudster slides through unnoticed.

Data Orchestration: A Symphony of Information

Think of data orchestration stepping in as the conductor of this chaotic orchestra of information. Through strategic integration and management of data from diverse sources, it creates a unified and actionable dataset.

This more sophisticated, non-linear approach facilitated by data orchestration can analyze the relationships and dependencies between fraud activities. By integrating data from various sources and channels in real-time, the fraud prevention system can recognize the patterns of a coordinated attack. It can detect the anomalies associated with the cumulative actions of the fraudster, painting a holistic picture that linear approaches might miss.

Looking again at our earlier account takeover/small transaction fraud example, a platform with advanced data orchestration can identify that the same device or IP address was used in the account takeover and subsequent fraudulent transactions. It can recognize that this new account shares similarities in behavior and characteristics with the compromised account. Data orchestration allows for the synthesis of information across multiple dimensions. This provides a more comprehensive and accurate view of potential fraud scenarios, thus enhancing the detection capabilities of financial institutions.

| Dive deeper into the capabilities of data orchestration through our on-demand webinar |Data Orchestration: 3 Key Components Every Fraud Leader Should Know

Real-Time Analysis, Real-World Impact

One of the key advantages of data orchestration is its ability to process data in real-time. This is crucial in the fast-paced world of fraud, where every second counts. With a good orchestration of data, institutions are able to respond to emerging threats immediately. Real-time analysis reveals patterns and anomalies consistent with fraudulent activities, providing a proactive defense rather than a reactive one.

Flexibility, Control, and Cost-Efficiency

Data orchestration doesn’t just bring order to the chaos. It also provides institutions with unprecedented flexibility and control over their data. This newfound control extends to managing costs effectively. Traditional methods often involve hefty investments in maintaining and updating isolated systems.

With data orchestration, institutions can streamline their processes, optimizing resources and minimizing unnecessary expenditures. Adding and removing new data sources is much easier as well when following an orchestrated approach. Market leading systems work seamlessly with third-party sources to give you a more complete data picture.

Technologies Driving Data Orchestration

Machine learning algorithms, big data analytics, and real-time data processing form the backbone of an effective fraud prevention system. These technologies empower organizations to identify evolving patterns of fraudulent behavior, adapting and learning from each encounter.

A sophisticated data orchestration engine becomes the cornerstone that unifies these technologies into a cohesive and powerful defense mechanism. Having comprehensive data inputs unleashes the full power of your machine learning algorithms, too. The more data you have, and comprehensive data you can feed to the model, the better that model will perform overall.

Navigating the Regulatory Landscape

As businesses leverage the capabilities of data orchestration, it’s imperative to navigate the complex regulatory landscape. Compliance with data protection regulations ensures that the benefits gained from orchestrating data do not come at the cost of violating privacy or ethical considerations. Ethical data handling practices not only protect businesses from legal repercussions but also bolster customer trust and confidence.

The Ripple Effect: Customer Benefits of Effective Data Orchestration

The impact of effective data orchestration goes beyond thwarting fraudulent activities. It permeates throughout the organization, leading to significant reductions in fraud instances, cost savings, and improved customer trust. By adopting a proactive stance against fraud, businesses can streamline operations, allocate resources efficiently, and provide a secure environment that fosters customer loyalty.

Orchestrating Success in Fraud Prevention

In the ever-evolving landscape of digital transactions, the role of data orchestration in fraud prevention cannot be overstated. It transforms the disjointed into the harmonious, allowing businesses to navigate the complexities of fraud with finesse and precision.

As technology advances and fraud methods become more sophisticated, data orchestration’s vital role in fighting fraud becomes even more apparent. Learn how you can bring a thorough data orchestration approach to your organization, including seamless integration, real-time analysis, and ethical data handling, by downloading our on-demand webinar Data Orchestration: 3 Key Components Every Fraud Leader Should Know where you’ll see real-world examples of data orchestration’s transformative fraud fighting power.