The global cost of online fraud is on the way to $60billion a year.
So, what can be done to protect consumers? Can technology have an impact against technology savvy fraudsters?
Online fraud can consist of many things, whether email, account takeovers on online banking sites, fraudulent social media accounts, to card-not-present transactions on eCommerce and retail sites.
Geolocation technology is becoming extremely effective in the fight against online fraud.
What is geolocation technology?
Put very simply, geolocation technology uses data acquired from a user’s computer or mobile device to identify or detail that user’s specific location.
It underpins plenty of the technology that brands and advertisers use daily, from location based services that tailor apps, to digital display campaigns based around a specific geographic area for example. The latter can be done through both Geotargeting and Geofencing.
How is it used to combat fraud?
Geolocation technology and intellectual property intelligence provide information about online users which can be used to verify certain things about them, from location, connection type and proxy data for example. This can then be used to provide strong authentication of user identity without impacting privacy.
In turn this provides accurate and reliable information about each online user which can underpin a necessary part of online security and fraud prevention.
Geolocation as a consumer service
Identifying someone’s location and information about their identity using geolocation is clearly a savvy way to combat online fraud, but it’s also being turned into a consumer service by many online banks.
Many mobile banking apps now enable the location of a card transaction to be matched with the user’s mobile device using GPS and by reconciling the location of the transaction with their mobile device.
By matching the phone with the location of the card being used a clear correlation can be found as to whether it is in fact the same person or someone different. This helps to sanction transactions quickly, minimise customer disruptions and combat fraud.
Furthermore if a card is reported as stolen, the geolocation services will trigger that there’s an inconsistency in the data, meaning the bank will have to make a quick authorisation decision.
This offers a different response from banks to the usual immediate card shutdown that customers experience when there is a suspicion of fraud – often a common problem for consumers when travelling and using their card abroad.
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