With the exponential rise in internet usage online transactions are also increasing; and so is the number of online frauds increasing. Thus the companies not only have to prevent online frauds, but also they have to protect the customer privacy.
According to ThreatMetrix, California based provider of cloud-based fraud prevention solutions, there has been a shift in fraud detection. The shift has been from cookie based identification to utilizing device identification, i.e., detecting returning visitors based on attributes of the device. Also the rules have been improved to use the information to detect spoofed devices and IP addresses as well as sniff out botnets.
Some other trends and predictions in fraud prevention as shared by ThreatMetrix are given as below:
1. Less Reliance on Cookies and Personally Identifiable Information (PII).
As the consumers are becoming more aware of the online frauds these days, they concerned with online privacy. Many of them block or delete cookies themselves or using security software. Hence many fraud prevention solutions are becoming ineffective. Thus there is this shift towards cookieless device identification and device fingerprinting in preventing fraudulent transactions today.
2. New Classes of Devices Become Commodities for Fraudsters.
The users use new devices like Smartphone and tablets in which they can hide their IP address and thus eliminate the possibility of detecting the source of transactions.
3. Use of Fraud Prevention Solutions Across the Entire Value Chain.
Today’s fraudsters are very smart and hence the threat across the entire value chain in e-commerce continues to persist. Thus the use of fraud prevention software has become very important for the online brands.
4. Rise of Online Services and Digital Goods Encouraging Fraud Automation.
The real time online transactions have increased considerably which is now the hot target of online fraud automation and the fraudster can easily automate fraudulent transactions.
“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.”