There’s no shortage of fraud and risk management tools designed to beat bad transactions. Let’s see which ones will work best for you.
Choosing the right fraud analysis tool can be one of the most important business decisions you make. It can save you hundreds of thousands of dollars. But the wrong one could also cost you a lot in lost time, efforts and headaches.
So to ensure you’ve got all the right tools to beat fraudsters, we compiled a list of all the major fraud and risk management providers currently operating on the tech landscape.
We’ll go over pros and cons of each, and will hopefully help you pick the best one for your needs.
But first, a quick word about transparency:
Wait – Aren’t You a Fraud and Risk Management Startup?
That’s right. And in fact, SEON was founded after we tried many competitors’ fraud management tools. We couldn’t find one that worked perfectly for us, so we built a platform with all the features we wanted to see.
But we also know that we’re new to the space, and our risk management tools are constantly evolving. So we’ll be the first to admit when you’re better off looking at another provider.
And now that’s out of the way, let’s get started on understanding the core differences between various risk management tools.
What to Consider For Your Risk Management Tool
Before we go over a list of the best solutions, let’s examine what categories of tools you’ll find, and some key features to consider.
There is really only one way to fight transaction fraud: acquiring more knowledge about your customers. But what you can do with it varies based on the kind of risk software you’re using:
- Data tools: these solutions let you aggregate more info based on a single point like an email address or phone number. Great for manual reviews, or for managers who just need extra insights. Some calculate a risk score, others simply deliver in raw form.
- End-to-end platform: you will get extra data and rules to calculate a risk score more efficiently. This gives you a lot more control and flexibility over how to mitigate risk. The most sophisticated platforms will use ML to help you discover new risk rules automatically.
It’s also worth mentioning that it’s entirely possible to combine multiple tools at once for a multi-layered risk strategy.
Understanding The Pricing Models
While all fraud companies operate under the SaaS model, you can also roughly group them based on how they charge:
- Chargeback guarantee: the provider will charge a percentage of the amount processed, and offer to cover the fees in case a chargeback request slips through the net.
- API or check based: you pay a micro fee every time the software checks an action.
The second option is straightforward and self-explanatory. You only pay for what you use.
The first, however, warrants a bit more investigation. On the one hand, chargeback guarantee models are great because your business won’t have to deal with disputes any longer.
But on the other hand, there is a strong incentive for the risk management tool to block more payments that would have been valid. They are more conservative when it comes to false positives, which could actually damage your bottom line in the long run.
For a complete comparison between the micro fees vs chargeback guarantee, you can see this dedicated post.
We should also acknowledge that payment gateways increasingly offer built-in risk management tools. Here’s why it’s probably the best idea to rely on them alone.
Legacy Vs Modern Solutions
Another important factor to consider. Do you want to go with a mature, reputable seller? Or a newcomer who’s trying to make their mark on the tech scene?
Both have their pros and cons:
- Legacy tools: a.k.a enterprise risk software. Better suited to enterprise clients. These are risk management tools from companies that have decades of experience, and a well-oiled workflow for checking bad data. The downside is that their risk management software rollouts are slower, and datasets can become stale – especially when they use shared blacklists (a merchant marks a credit card as fraudulent, and it’s blocked across the entire platform for every other client). They also tend to be much pricier.
- Startup model: the adapt-or-die model fosters innovative technology, usually run by younger teams. There may be growing pains, but also a more agile approach to risk, which can be helpful as fraudsters are always evolving their attacks based on your line of defense.
What are the tools used in risk management
You will find that the most common ones include data enrichment (to learn more about our customers) and risk scores. It can focus on IP and email addresses or phone numbers. Risk scores are calculated based on rules you create in our system.
Hidden Costs and Other Things to Consider
Let’s now look at all the extra parameters that may affect your ROI when it comes to risk management tools and fraud monitoring tools:
- Integration time: the longer it takes to deploy the solution, the more you are losing to fraudsters.
- Training / learning curve: similarly, if the product is too complicated, it could be weeks or months before you start seeing some real results. You might see a ton of false positives and negatives until the solution really “understands” the transactions processed by your business.
- Support as extra: some providers have a limit on how often you can contact their support team.
Okay, without further ado, we can now start looking at specific examples with the key fraud tech providers operating today. (You can click on the name to jump directly to their description.)
ArkOwl – Lightweight Email + Phone Analysis
ArkOwl provides live, accurate and rich analysis mainly for email and phone verification. This helps predict how risky a user will be before they process a payment on your site. Their analysis looks at domain, breaches, and social networks, amongst others.
Their tool counts 81+ points used for analysis and ensures data is delivered in raw form, with what they claim are no false positives or negatives. There are no limits on the number of users you can add to an account, as you only pay for the bandwidth you use. Payment is flexible either as a monthly subscription or pay-as-you-go, and they offer a free trial.
When it comes to social media, it’s worth noting that ArkOwl looks at some of the main networks (Google, Facebook, Twitter), but the number of databases they can check are limited. This is certainly due to the fact that ArkOwl is a small team – and scraping social info can be extremely complex and time-consuming as the sites change their settings all the time.
- ArkOwl risk analysis type: data enrichment
- ArkOwl Pricing: pay per API request. Must contact sales for a quote.
- ArkOwl pros: lightweight email and phone verification with basic social media checks. Good for companies with risk management software in place who need extra knowledge points.
- ArkOwl cons: a very small company, so not many online documentation, and a limited number of sites they can check for social media profiling, for instance missing out on phone messenger lookups. Can’t help with more advanced attacks.
Emailage – Mature, Reliable End-to-End Platform
Emailage, recently acquired by the tech corporation LexisNexis, delivers risk intelligence via email addresses analysis and predictive scores. The company has been operating for a long time, putting it in the category of mature, enterprise risk management software, but they nevertheless innovate with tools such as their Chrome extension.
When it comes to analysis, Emailage has a surprisingly low number of data points it analyzes in real time, relying instead on proprietary databases they have built over the years. This can make it challenging to use effectively in certain emerging markets.
On the flip side, the dashboard is well-designed and there is no shortage of online resources thanks to webinars, good documentation, and 24/7 customer support, which could make it one of the best risk management software for enterprise clients.
- Emailage prevention type: enrichment, end-to-end platform
- Emailage Pricing: pay per check. Must contact the sales team for a quote.
- Emailage pros: lightweight email and phone verification with basic social media checks for risk assessment. Good for enterprise clients with high budgets and local customers.
- Emailage cons: no device fingerprinting for extra analysis, preset rules or permissions for team management. Price per request is at the higher end of the spectrum, and support is a paid extra, so not recommended for SMEs.
Ekata – Ease of Use and Modular APIs
See a live demo of our product
Bence is the co-founder and COO of SEON whose vision is to create a safer online environment for merchants in high risk verticals.