During our fourth session of Fraud Office Hours, an attendee asked, "How can you stop identity fraud rings from taking advantage of your Fintech platform?" Watch this video clip and read below to see how Unit21's Head of Fraud Risk, Alex Faivusovich, responded.
How to Stop Identity Fraud Rings From Taking Advantage of Fintech Platforms
"Graph-based rules are an excellent way for you to create alerts and try to identify fraud rings.
With fraud rings, before you jump into examining the fraud ring, you first want to try to understand what type of fraud you’re dealing with. Analyzing - and dealing with - the fraud ring itself will not be as helpful without first understanding the type of fraud you’re facing.
If your investigation finds that you’re dealing with Synthetic ID fraud, you’ll want to figure out the best solution for dealing with synthetic identities. If you’re dealing with a third-party identity problem, you need to understand what tools and features you have available to deal with a third-party identity problem.
Graph-based rules are a great way to create alerts and try to identify fraud rings. Unit21’s network analysis features give you a great visualization of how users interact with each other. Based on those interactions, you can learn about their behavior. For example, if you have too many users interacting with each other, you can analyze whether that makes sense from a business perspective.
Always take a step back and ask yourself: is suspicious activity you see something you’d expect to see on your platform? Is it a realistic business use case for your services?
Remember, at the end of the day, fraudsters don’t really care about your features or offerings; they only use your platform as a tool to move money from one place to another. So using features like graph-based rules and network analysis help you visualize and understand those interactions and see if you have something much larger going on.
Unit21 does even more to help detect fraud rings; our Fintech Fraud DAO is a consortium-based offering that offers Fintech and crypto companies the ability to join a consortium of like-minded businesses. Users share information, and can then also query shared information from other companies, allowing them to analyze how entities interact on different platforms, drawing insights from that behavior.
This consortium is extremely valuable when onboarding new accounts. Companies can look at entities they’ve onboarded to try to understand who they really are and what they really represent.
If a company suspects they have a case of third-party identity fraud or synthetic ID fraud, they can query the DAO to see how this entity has interacted with other Fintech and crypto companies in the past. This lets you paint a clearer picture of their behavior, and make a more educated decision about whether they’re a real threat.
Looking for more insights? Check out our fourth session of Fraud Office Hours on-demand for a deeper dive into how Unit21 can be used to identify fraud rings on your Fintech platform.