Is Protecting Your Customers Against Fraud Your Most Important Competitive Advantage?

A new day has dawned for businesses committed to addressing the challenges of modern digital fraud. While once there was a time when speaking of fighting fraud was considered an admission of having a fraud problem, that time is now behind us. Today, proactively choosing a best-in-class fraud management solution is a key competitive differentiator for any business that acquires consumer data and depends on consumer trust. 

As consumers, we have already embraced this as our new normal. We give our loyalty to those organizations that demonstrate their commitment to the safety of our financial information and data security. Conversely, we will leave a business if we don’t trust it. Recent research from Oxford Economics makes this startlingly clear:

“79% of consumers say they would stop doing business with a company that misuses their data.”

Pinterest creates great user experiences

While in his role as Head of Protect and Integrity at Pinterest, Sriguru Chakravarthi spoke about his company’s decision to partner with DataVisor. He made clear that, for Pinterest, the choice to integrate our advanced fraud management solution was driven by the company’s commitment to its users:

“It’s important for Pinterest to quickly detect and shut down the bad elements in the ecosystem so that our good users have a great user experience … DataVisor’s unsupervised machine learning technology detects not only ongoing attacks but also attacks that have been incubating over a long period of time, pretending to be good accounts. DataVisor has provided a boost to both our spam coverage, as well as our spam detection speed.”

Chakravarthi does a wonderful job of enunciating the relationship between the prevention of fraud and the enhancement of customer experience. When we understand this connection, we understand why embracing advanced fraud prevention strategies are a competitive differentiator—because it represents a commitment to customers. 

Yelp protects content integrity

During his tenure as Director Of Engineering at Yelp, Jim Blomo spoke about his company’s reasons for choosing DataVisor:

“Yelp is committed to protecting the integrity of our content. DataVisor’s security analytics are an important part of our spam detection system, and help prevent malicious accounts from interacting with real users and businesses.”

Notice the focus on customers again. Yelp understands that protecting its users from fraud is one of the most proactively customer-centric things they can do for their global community.

These sentiments are virtually universal across all of DataVisor’s clients. We’re proud to be the fraud management solution of choice for organizations that care deeply about the safety, security, and experience of their customers. 

letgo prevents adverse effects on users

Steve Knopf is the VP of Trust & Safety for mobile marketplace letgo, a company recognized as having had “the second-fastest-growing app in the U.S., in 2017.” By the end of 2018, their app had been downloaded more than 100 million times, and their platform boasted more than 400 million listings. Their rapid growth has earned the company unicorn status, but with that success came increased exposure to fraud. As with our other clients, Knopf is clear about this company’s motivations for choosing DataVisor:

“With DataVisor and unsupervised machine learning, we were able to identify and stop mass-scale fraud attacks before they had any effect on our users.”

Once again, it’s all about the users, and this is as it should be. 

Providers of fraud management solutions have been making the point for a while now that choosing to address fraud proactively is a critical step forward for any online business that collects personal and financial data. But whereas it was previously only fraud providers that were preaching this gospel, the mantle is now being taken up by a wide array of organizations who are becoming more forthright about their fraud prevention efforts.  

How not to suffer a data breach

A recent study from the Ponemon Institute took the somewhat unusual step of including data about companies that have not suffered a data breach in the past two years. What they discovered reinforces the fact that proactivity is a business asset when it comes to addressing modern fraud. Three items from the report are especially instructive:

• Companies that did not have a breach are more likely to rate their data breach plan as highly effective. Sixty-two percent of respondents in companies that did not have a breach say these plans are very effective. In contrast, only 45 percent of respondents in companies that had a data breach rate their plans as highly effective.

• Investments in technologies that improve detection of and response to a data breach seem to pay off. Seventy-three percent of respondents say their organizations increased their investment in technologies specifically to better detect and respond quickly to a data breach. Sixty-one percent of respondents in companies that had a data breach increased their investments.

• Companies that did not have a data breach are more likely to take steps to prepare for a data breach. More companies that managed to prevent a data breach regularly review physical security and access to confidential information, conduct third-party cybersecurity assessments, integrate data breach response into business continuity plans and create a “standby website” for content that can be made live when an incident occurs.

In reviewing these takeaways, it’s important to remember that data breaches in and of themselves are not the real issue or threat—it’s the downstream damage that results. Data is stolen because it’s valuable to attackers, and whether attackers obtain the data themselves, or buy it from other malicious actors on the dark web, the end result is the same—stolen data gets used to perpetrate future attacks. Stopping these attacks, and these attackers, is what proactive fraud management is all about.

Protecting your customers from fraud, differentiating your business

With numbers like the above becoming more widely available and acknowledged, it is inevitable that more organizations will realize the value of proactively embracing advanced fraud prevention strategies, and take the right steps to integrate advanced solutions. 

In the end, the decision for businesses is a simple one: choose to protect your customers before the damage happens, or after. If you’re having trouble deciding, think about which story you’d rather tell—that you chose the right solution early, and your customers are safe, or you didn’t, and they’re not.