The Simility Blog
Fraud Detection and Orchestration Hubs: How They Can Help Your Business
Jayan TharayilApril 15, 2020
In the ongoing battle against rising fraud levels, organizations are increasingly turning to so-called “hubs.” These offerings consolidate multiple point solutions and internal customer data to optimize detection, improving the customer experience and streamline operational processes. According to a recent report from Aite Group, 36% of financial institutions surveyed said they had already implemented hubs, up 11% on the previous year. (1)
But not all platforms are created equal, and due diligence remains an important part of any purchasing decision.
A Multi-Billion-Dollar Problem
We all know that fraud is on the rise. The bad guys have access to huge volumes of breached identity data, advanced cloaking tools to keep their activity anonymous, and automated tools like credential stuffing scripts to industrialize the process of account takeover. These factors help explain why millions of consumers fall victim to various types of fraud each year. (2)
Account takeover and application fraud are some of the biggest problems facing retailers, banks, and other online organizations. And current fraud solutions are imperfect. According to Aite Group, the number one pain point is harnessing internal data effectively to feed analytics. Other pain points include excessive false positives, real-time payments fraud, and high customer friction.
Organizations are also challenged internally by IT constraints, particularly the time and resources needed to vet new fraud prevention vendors and issues around alert overload.
The Value of Hubs
Hubs enable organizations to benefit from the capabilities of multiple fraud vendors while connecting to a single hub provider via an API or on-premise integration. A hub risk engine then integrates their output with internal data to assess risk and orchestrate next steps.
There are numerous benefits of hubs, including:
- No need to vet multiple new vendors; can add new ones quickly
- Keeps operational costs down
- Agility in the face of evolving threats
- More effective risk-based fraud prevention
What Simility Offers
Simility’s Adaptive Decisioning Platform enables customers to leverage large volumes of in-house and third-party data, which is then enriched to optimize fraud prevention. The platform can combine this contextual data for maximum flexibility.
Our risk engine applies machine learning models in a highly transparent manner, enabling fraud teams to compare and select the right models and features, and observe the most accurate model via a ranking tool. The policy engine orchestrates stepped-up authentication where appropriate. Customers can write and apply their own rules in minutes and build and upload their own or third-party models.
As a PayPal service, we have access to a network of global intelligence across hundreds of millions of users, which helps improve accuracy. We also offer multi-tenancy support for organizations operating in different jurisdictions.
As regulatory rules such as PSD2 increase the onus on organizations to enhance authentication and risk management, firms need a way to tackle escalating fraud without impeding the customer experience. According to Aite Group, hubs are an increasingly popular method of doing this: 45% of the financial firms it surveyed said they are likely to invest in one in the next 1-2 years.
But the devil is in the details. Buyers must carefully consider their evolving business requirements before analyzing what the market has to offer.
To learn more about how Simility’s Adaptive Decisioning Platform seamlessly orchestrates complex decisions to help reduce fraud and improve the customer experience, schedule a demo now.
- Aite Group, December 2019, https://www.aitegroup.com/report/fraud-authentication-and-orchestration-hubs-path-greater-agility
- Javelin Strategy & Research, March 2019, https://www.globenewswire.com/news-release/2019/03/06/1748662/0/en/Consumers-Increasingly-Shoulder-Burden-of-Sophisticated-Fraud-Schemes-According-to-2019-Javelin-Strategy-Research-Study.html