When it comes to online shops which accept online payments or digital banks offering online loans, user profiling is something different than identifying personal information or personalisation. The effectiveness of profiling determines whether a company falls victim to fraud or manages to recognise the threat before the transaction is completed. There are also some other benefits of precise user profiling that can help your business grow, and we’ll try to highlight them in this article.
User profiling in online businesses that accept online payments is nothing else but gathering all possible information from users' visits to help us deeply understand users' motives and recognize recurring visitors to tell apart legitimate clients over fraudsters. There are different technologies to do so, but we’ll talk about the ones based on raw data points gathered during users’ visits about their device, behaviour, and system. The more unique and in-depth data they can collect, the better precision in authentication you can achieve. More on that topic here. But let’s cut to the chase.
The main benefits of in-depth user profiling are:
1. Reducing fraud, false positives, chargeback & manual review
As mentioned, this is the primary reason for user profiling. Once the user reaches the payment/login process, you want the process to end positively, bringing joy to customers, and you, the money. Therefore, it is essential at this stage to authenticate the transaction effectively and profile the user to make sure you’re not letting a fraudster steal from you.
What if your antifraud system (usually including a profiling solution) misjudges a genuine customer and blocks the transaction? False positives (declines) are frustrating for the customer and you, and you should want to avoid the bad experience. Of course, manual review is always a solution here. Still, you should leave as little traffic to such verification as possible and trust user authentication’s clever and effective automation.
Deep user profiling is all about understanding a user's true intentions and who’s really behind the screen so that the process of payment, account login, or loan applications cause as minor loss as possible for both parties.
2. Smooth UX
With in-depth profiling, you should want two things: high precision of accepting legitimate transactions and, at the same time, no friction to your users. The checkout experience is one of the last steps on the customer journey, so if the person got that far and their buying intention is to pay you, you shouldn't ruin it with the friction at that point. The process should go as smoothly as possible, with no repercussions (chargebacks, cancelled transactions, false positives, frustration).
The most advanced profiling systems provide real-time screening in the background, which happens in the blink of an eye, and the user is not even aware of the process. Visitors get complete security and great experience; you gain business.
3. Improved mobile applications fraud detection
The reality is that most of the biggest anti-fraud solutions on the market today were built in the late 1990’s and early 2000’s. The newest ones are from the 2010s. Back then, the share of transactional traffic going through web browsers was dominant. And then in 2012, mobile began to grow. In growing markets like Asia/Africa/LATAM, mobile is dominant. Fraudsters are perfectly aware of which platforms are using which security measures. They know which ones are leaky with regards to mobile data. Fighting fraud in native mobile is a whole different game. Merchants who use legacy systems now have a hole in their security. When Nethone was starting in 2016, we saw the future growth in e-commerce, and predicted that the bulk of the growth would come from the mobile channel. So we invested in research and development to find data that will help us profile mobile applications and fight mobile fraud, such as extracting data from gyroscopes and accelerometers in devices. The Profiler team helped us build a richer risk profile of a given mobile session. And now the investment is paying off - Profiler increases blocked fraud attempts in apps by over 20%.
4. Answering particular challenges that bother only your business
In the beginning, we wrote that profiling helps in chargeback/manual review/fraud level drop-down, but what if your business is fighting remote desktopping fraud or ATO fraud? Each company meets different problems, and a well-performing profiling solution should adjust its performance to particular challenges and focus on a different set of data to gather during users visits, to precisely prevent what’s harming your business.
There are solutions on the market (yes, Nethone’s Profiler is one of them) with a dedicated team of intelligence specialists that will proactively create new in-depth data attributes to gather during website sessions to increase the performance and accuracy of profiling solutions. In the Profiler team, our intelligence experts will thoroughly research the darknet in search of new tools and techniques that fraudsters use to commit this specific kind of crime. They implement the knowledge they have gained into the data collection process, which allows for more effective profiling and detection of suspicious behaviour.
5. Security of the data
All of what’s mentioned above can be achieved with the Profiler - one-of-a-kind technology, using darknet know-how, for in-depth screening of user's interaction with the website.
If you would like to test it in your business visit this page and schedule a non-binding call all with our team members.