How Alternative Data is Powering Cybersecurity Platforms
Businesses worldwide spend over $4 million daily to combat mischievous infiltrations and cybersecurity threats. Non-payment and non-delivery scams, identity theft, and phishing by threat actors are among the top five cybersecurity crimes that put customer data at risk.
Cybersecurity threats are so sophisticated and rampant now that cybercrime is set to cost the world a whopping $10.5 trillion annually by 2025. But you lose far more than money when you suffer a data breach or cybersecurity threat
You lose the trust of your customers. Threats come at the risk of your reputation. Recent upgrades to regulations worldwide indicate that contemporary consumers are more privacy-conscious than ever before. Recovering from a breach will probably bring back some of the lost revenue. But once you lose a customer's trust, you will likely never get it back.
And yet, in just eight months into 2022, brands like Marriott, Microsoft, Okta, Panasonic, T-Mobile, Audi, LinkedIn, and Facebook have already suffered a data breach. What are brands doing wrong? And how can they address cybersecurity threats effectively?
Why manual verification checkpoints are not the answer
Perhaps you already have some techniques to protect your data and customers. For example, you make your customer verify their identity before every interaction or financial transaction. Sometimes, even before they reach your customer service executive. Easy enough.
But how many "security questions" does that involve? Do you ask your customers for a combination of these to prevent fraudulent transactions?
- Email verification?
- One-time password (OTP)?
- Call verification?
- Security verification pin?
- Mother's maiden name, maybe?
- First pet's name (although we'd think most customers wouldn't mind this one!)
These verification checkpoints are effective, but they come at a cost. A customer's most vital expectation from brand interactions is convenience and flexibility. When a brand asks them to authenticate every purchase and every single interaction, it affects the customer experience they are able to offer, a critical competitive differentiator in our times.
You need to find a refined way to track fraudulent transactions and impersonations. A customer may be okay with some security questions, but threat actors are getting more sophisticated. Limited safety through customer authentication is no longer enough. You will need more questions and checkpoints. And these questions and checkpoints will further impact the customer experience. How do you balance the increasing cybercrime threat with the fact that your data security cannot come at the cost of your customer experience?
Alternative datasets: Using data as a security layer
How can cybersecurity be far behind with data impacting every aspect of your business? Lifesight customers are increasingly making effective use of location and other alternative data sets to strengthen their cybersecurity practices and protect their customers' interests. Let's see how location data and other alternative data sets are coming into play in brands' cybersecurity workflows.
Confirm customer authenticity during remote digital transactions
Your primary goal is to sort each customer transaction into low-risk or high-risk categories. Why not use the answers they provided to achieve this? You know, all the data you use for your marketing to create hyper-personalized ads and deliver an empathetic consumer experience? This could include:
- Location history
- Online search behavior
- In-shop interactions
- Device-based data such as IP address and other phone activity
These elements constitute your customer's identity. Therefore, they can assist you with identifying every genuine customer during remote interactions and transactions.
An automated tool built to cross-reference this information can flag transactions as low-risk or high-risk. You can use these alternative datasets to corroborate identities and reduce identity fraud.
Identify genuine callers and block fraudsters
A customer calling to ask for a refund, make a complaint, or enquire about their late order will not appreciate your interrogation checkpoints before they get the time to express their grievance to your customer support teams. It will simply result in subpar customer service and will also cause a loss of trust. Not just that, you are also raising your per-call cost. Every time your customer representative is on a call, the longer this call stretches, the more you pay. More importantly, we live in times of some serious sophistication in cybercrime. So, all the security questions you plan to ask are probably available on the dark web. Hackers already have the answers, so these checkpoints are not as effective as they used to be.
Authentication tools for your inbound calls based on the foundation of data can help identify and authenticate callers even before the conversation begins. Whether the customer uses the registered mobile number to contact you doesn't matter in this context. Instead, suppose the attributes match the customer information stored in your CRM database, the customers' recorded location, and other details. In that case, you can automate the identity confirmation process or, conversely, flag the call as a potential danger.
This process doesn't require anything from the customer's end. Inbound authentication will help your customer support team independently sort calls into high-risk and low-risk. The low-risk ones can jump straight to their queries, and you can reserve the extra security checkpoints for the high-risk callers. As a result, your agents can focus on serving your customers rather than interrogating them.
Prevent fraudsters from taking over your customer's phones for fraudulent transactions with your brand
Anyone with a smartphone and a little advanced research skills can learn how to trigger call forwarding or number reassignment. As a result, taking over a smartphone for fraudulent transactions and other forms of cybercrime has become easy. Let's say you are a bank. A fraudster takes over your customer's phone and performs fraudulent transactions. Can you imagine the loss of trust in your brand?
What you can do to prevent this is to have data attributes that confirm that the transaction request is coming from a genuine customer on his phone. You can apply alternative data sets like location intelligence to verify phone ownership. Identifying high-risk numbers will further reduce fraud takeovers. You build trust in app transactions and other forms of digital transactions by never allowing a phone takeover to make any significant impact.
Alternative data in action: How location data and other data sets identify and prevent fraud
Arnas Vasiliauskas, a cybersecurity leader at CarVertical, is a firm believer in location data's power in identifying and preventing fraud. He says, "Location data is one of the most effective data parameters for identifying fraud. Businesses can use location intelligence to detect and prevent payment frauds and account takeovers. They do this by aggregating geolocation signals such as GPS, WiFi, GSM, browser/HTML5, and more. Conventional security measures would include verifying only IP addresses. This is not sufficient anymore. Cyber threat actors often use location spoofing to counteract the adequacy of this method."
The systems alert the business when a user's payment activity occurs in areas not similar to the locations they usually operate from. As a result, brands can check users' locations to verify identities in real-time and prevent financial crimes. This becomes especially crucial for card-not-present (CNP) transactions.
Consider Becca, a student in Ohio who buys products from you, a global skincare brand, every month. You have identified that she's from Ohio and her transactions often occur in that city. Sometimes, you also see transactions coming from Cleveland when she is traveling to her parents' home.
But when "Becca" tried to make the purchase last week, your technology revealed that the transaction request was from London. Sure, this could mean she's on vacation or an internship. But location is the first flag. Then, you also see that her browsing behavior is quite different, and more red flags emerge.
Earlier, her searches would be dominated by skincare questions or queries related to her degree. Now, it's different. Of course, this doesn't necessarily mean someone has taken over Becca's account, but it is worth confirming her identity before you allow the transaction to go through.
At this point, your data-backed authentication tool has done its job. It had flagged Becca's purchase without involving her or spamming her with checkpoints before the risk was flagged. You can build trust with a quick call to Becca to confirm her location before you allow the transaction to go through. If it's Becca, great. If it wasn't, you have done your job of informing her and preventing the fraudulent transaction.
Score high on convenience customer satisfaction, and trust
As primary security screeners, location data and other alternative datasets can help with your brand's and customers' cybersecurity concerns.
At the same time, you can -
- Increase the speed of customer transactions
- Reduce your customer representatives time spent on verifications
- Improve customer experience - not just because they know their data is safe with you but also because they don't get flooded with security checkpoints
Maximize customer experience and cybersecurity with a single tool - data.
Talk to us to know how to get started.