AI Takes On ATO: OneSpan Risk Analytics

Featured article by Peter Kelley, the Kelley Group Two

Account Takeover (ATO) and New Account Fraud (NAF) are the top two types of fraud challenging financial institutions and the financial/merchant ecosystem. In the U.S. alone, ID fraud accounted for $16.8 billion dollars in fraud losses in 2017.

“Account takeover continues to grow rapidly and directly impact both financial institutions and their customers. The industry has to focus on neutralizing these bad actors quickly and effectively, and must have the ability to detect fraud in real-time,” said Julie Conroy, Research Director with the Aite Group.

It’s important to implement a fraud management solution that leverages machine learning-based risk analysis to identify suspicious activities and inconsistent customer behavior, she notes, both to strengthen customer relationships and reduce losses from ATO and NAF.

OneSpan has just launched its open AI-based Risk Analytics to help financial institutions thwart ATO and NAF.

During transactions, the cloud-based solution collects and analyzes data from devices, user behavior, transactions, digital channels and business applications, and creates a score that determines the risk associated with that transaction.

Risk Analytics is then able to take immediate action to either allow, review or block the transaction, based on intelligent workflows incorporating bank-defined security policies and rules.

According to the Javelin Strategy and Research 2018 Identity Fraud Study, ATO losses accounted for $5.1 billion dollars, a 120 percent increase from 2016, and 1.5 million consumers of existing account fraud had an intermediary account opened in their name first – a 200 percent increase as directly compared to the previous year.

“Wherever money and data flows, fraud will certainly follow,” said OneSpan CEO, Scott Clements. “While stopping fraud has become increasingly challenging because today’s threats keep evolving, it’s critical for financial institutions to take proactive measures and a layered approach to security to monitor, detect and block fraudulent transactions from happening before they occur.”

OneSpan was recently named 2018 Mobile Biometrics Platform Awards Leader by Javelin Strategy & Research. Its solutions are used by half of the top 100 global banks.