Taking a Multipronged Approach to Account Takeover
Account takeover fraud (ATO) continues to grow and that not only puts a business’s financials at risk but also its reputation. Fraudsters are able to obtain PII and credentials through email phishing, stolen identities, and data breaches — all occurring outside a business’s firewall. With this information, fraudsters are able to access existing customer accounts, modify account info, and make new transactions. This is why Amanda Knor, Senior Team Lead of Fraud Operations at Enova, focused on tackling ATO head on.
Enova (NYSE: ENVA) is a leading provider of online financial services to non-prime consumers and small businesses, providing access to credit powered by its advanced analytics, innovative technology, and world-class online platform and services. Enova also delivers real-time analytics and decision management services to clients through its Enova Decisions brand.
As a digital native operating for over 15 years, Enova already had a robust strategy for fraud detection and prevention. While ATO makes up a small percentage of all fraud attempts at Enova, Knor understood why developing an effective yet nimble ATO strategy was critical: Since existing customers typically have access to higher levels of credit, the potential fraud loss was much greater. More importantly, ATO negatively impacts customer confidence, loyalty and trust in the brand.
Knor took a closer look at the ATO cases and identified two opportunities. First, to detect patterns of behavior indicative of ATO. Second, to better utilize the Contact Center to not only verify identity but also prevent ATO.
Knowing that any solution which was implemented must minimize undue friction to the customer experience, Knor worked with her team, fraud analytics, compliance, strategy & operations, and software engineering to develop and roll out the following ATO strategy:
● Integrate and analyze 1st AND 3rd-party data to identify patterns of abnormal behavior and suspicious activity. 1st-party data would enable Enova to determine the difference between normal and abnormal behavior. 3rd-party data would enable Enova to associate characteristics with fraudulent activity outside of Enova (ex. device risk and reputation from TransUnion, formerly iovation).
● Create an alert system to flag suspicious activity. This would trigger an investigation by fraud operations behind the scenes.
● Modify security questions to ask for information that isn’t easily compromised. Rather than asking for generic PII (ex. last 4 digits of SSN), questions would be modified to ask for specific information that the Contact Center could easily verify. Compliance played an important role in guiding what questions could be asked.
● Train Contact Center on how to identify suspicious activity. Even if a caller passes verification, the caller may be exhibiting other behaviors indicative of ATO.
● Add step-up authentication. In cases of suspicious activity or specific behaviors where ATO is likely (ex. requesting to change bank account), additional verification would be needed.
In the past year, Enova’s existing fraud strategy had already successfully prevented millions in potential losses. With the new ATO strategy, an additional $1 million in potential losses were prevented. What’s astonishing is that even though ATO only made up a small percentage of all fraud attempts, ATO made up a significant percentage of total potential losses.
“Fraudsters operate like businesses and think in terms of ROI,” said Knor. “Logging into an existing account is much easier than going through a new customer onboarding process which is why ATO is becoming more common. ATO will only continue to grow and become a major threat which is why establishing a behavior-based ATO strategy is more crucial than ever.”
Enova Decisions has taken Enova’s best practices and technology around ATO and packaged them into a fraud solution for the mid-market. Contact us today to learn how we can help your business.