Time to rewrite the rules of fraud management

Andrew Naumann, Vice President, Product Management — Merchant Solutions, CyberSource

Fraud is not the problem

It used to be that when we asked merchants about their most significant eCommerce challenges, ‘fraud!’ would invariably be the answer. The focus was relentlessly on reducing chargebacks — it was the only metric that mattered.

It’s not that fraud doesn’t loom large – it’s that a more mature understanding has emerged. Some percentage of fraud is now increasingly accepted as an unavoidable cost of doing business. here , but in a nut-shell, it enables fraud managers to test new rules from their own transaction data from the past 6 months in minutes.

Since we’re replaying historical transactions that are typically at least 3 months old, we have a very good understanding whether they were fraud or legitimate,  we now have a view into the way that any new rules and algorithms would have performed at the time the transaction was submitted. To be clear, this is not about taking a past transaction and running it through a new fraud configuration. Based on the way we collect and store data, we can rewind history. Velocities, linkages, detectors, risk scores, rules, etc. can be calculated exactly as they would have been at the time the transaction was initiated, unbiased by time or any subsequent activity. We can then examine the impact of any new rule configurations (pass/accept/review) on these transactions against actual fraud rates.

Decision Manager Replay reduces the time to run \’what if\’ iterations, from months down to minutes. It doesn\’t remove the need for the right approach, experience, detection tools and insight, but it turbo-charges the application of all of these.

Read the ebook to learn more about tuning your fraud strategies to balance fraud prevention and order acceptance.