Fraud Fighter – Robocash Vs Credit Check Fraudsters

Arvis Strods, Chief Risk Officer at Robocash Group, joined the SEON podcast to share his insights.

Robocash Group is the mother holding of Robo.cash, one of the fastest-growing P2P lending platforms. With a long and varied career in risk management, Arvis Strods has gathered fantastic insights into what makes fraud management challenging, and what it has in common across different verticals.

He started at a GE-owned company in the Baltics, and moved on from the operational level to look at risk in eWallets, finance, gaming, and finally: Robocash. Today, he specialises in helping the company give out loans to customers as safely as possible. Here are some insights we learned in our chat with Arvis.

#1 The Broad Strokes of Fraud Are the Same Everywhere

Not many risk managers get to experience fraud through such a wide scope as Arvis, which is why it’s great to know that you can absolutely move from one vertical to another.

“The approach on how to fight fraud is always very similar in one way: they are trying to trick you and you’re trying to find a way to beat them. And that’s the same approach everywhere.”

But of course, there are idiosyncrasies too. This is especially apparent when it comes to taking payments and giving them out.

“The biggest difference I think was from eWallets to lending, because in lending you are giving out the money, whereas in eWallets the money comes in. So you have to check if it comes from stolen cards and stolen bank accounts and so on. But other than that, the approach is the focus on verification, anomalies, that’s similar everywhere in fraud I would say.”

#2 However, His Day-to-Day Changed a Lot During his Career

The biggest change for Arvis was probably regarding his daily activities as his career progressed.

“Now we are working remotely, from home mainly, my children, when you ask them: what’s your daddy doing? They’re like: he’s just speaking on Skype! Basically just talking. That’s actually how my typical day looks – different meetings, different calls, trying to arrange for my plans to happen, and for other people’s plans to happen, this is a lot about cooperation and agreeing or arguing on how to move forward, so a lot of it is actually communication.”

#3 Sales and Risk Can Actually Work Hand in Hand

An interesting point from Arvis arises when we mentioned the dual nature of sales versus risk management. According to Robocash’s CRO, it’s not as incompatible as you may think:

“It’s about understanding the other party’s real motivation. When you work in fraud, you start to understand fraudster motivation, and you can protect the company and so on. This lesson from fraud also works with marketing. What’s their motivation, right? They want to sell more: how can they achieve it. And sometimes the things we do in risk, they actually increase sales. If you have better quality, the customers will return.”

#4 Credit Risk and Fraud Are Two Different Beasts

Interestingly, online lenders have to treat credit risk and fraud as two separate entities.

“It might sound logical, but you can always lower fraud control for people who are less risky based on your fraud models, but you cannot lower your fraud control for people based on credit risk. That’s one lesson that I learned the hard way.“

#5 Top Tip to Fraud Managers: Don’t Expect to Win

“One of the toughest things every manager will find out at some point in his career is that you can never beat fraud. Whatever you do, as long as you keep the company going, there will be some fraud getting through. They’re always finding new ways, new kinds of options for them to go through and you’ll be one step behind.”

But it doesn’t mean fraud and risk managers should give up. Quite the opposite:

You can settle for: at least I can prevent the “not-so-smart” fraud, or at least I can prevent the mass fraud attacks. And you focus on what you can prevent, you just have to deal with that. - Arvis Stords Click To Tweet

Key Takeaways – No Perfect System, But We Can Try

Working in one vertical where risk is so ingrained with the business model, online lenders are well aware that they’ll never be able to stop all fraudsters and bad borrowers.

But it doesn’t mean Arvis and his team aren’t trying their hardest, leveraging all the tools they can use, including SEON’s data intelligence.

You can click here for more information about how Robocash performs better digital credit checks in risky markets thanks to SEON.

You might also be interested in reading about: