10 Best Fraud Management Systems & How to Pick the Right One for You

Your fraud management system needs several key features to be truly efficient. Let’s see what they are.

Businesses of all sizes now have access to a plethora of fraud management solutions, which is why the market growth is so impressive. But it doesn’t mean they’re all equal. Some are legacy solutions that are costly and use antiquated tech. Others are more modern and agile but might try to sell you tools you don’t really need.

So in an effort to help you find the right tool to protect your business, here is what we believe are key features for a great fraud management solution.

List of Top Fraud Management Systems

• SEON: Unique Digital Footprinting and Custom Rules
• Ekata: IDV and Fraud Prevention for Enterprises
• Kount: Focus on Ecommerce and Chargeback Prevention
• Signifyd: 100% Chargeback Protection for Merchants
• TruValidate: Part of the Large TransUnion Anti-Fraud Ecosystem
• Sift: Popular US Vendor with Payment Protection
• Feedzai: Modular Solutions for Fintech and Finance
• FraudHunt – Cloud-Based ID Fingerprinting
• SumSub – KYC and KYB
• SAS – The Banking Risk Management Favorite

What Is a Fraud Management System?

A fraud management system is an end-to-end software solution created to help companies and organizations to monitor, evaluate, prevent and mitigate fraud of all types.

A fraud management system can have a major impact on the overall performance of an organization, from automating decisions to detecting sophisticated fraud schemes.

Through the use of technologies like machine learning, you can reduce risk by quickly identifying patterns in data with minimal human input needed, all in real time.

Although manual reviews will remain necessary for certain orders, automated fraud management software can drastically cut the time spent and boost the efficiency of your team. Furthermore, it gives you a clear one-stop shop for your team to analyze orders.

Key Features of a Fraud Management System 

It must be fluid across departments so you’ll need to be able to create multiple logins for your team, with various permission levels. Having a centralized GUI (graphical user interface) where you can control, manage and communicate ideas about how to fight fraud utilizing each department.

Depending on your business requirements, your fraud department might need a full end-to-end system or could work better with a multi-layered approach built up of differing products.

• Team management: Chances are that you’re not trying to mitigate risk all by yourself. If you are part of a fraud detection team, you’ll need to be able to all access the platform, without stepping on each other’s toes. So you’ll need to be able to create multiple logins for your team, with various permission levels.
• Convenient GUI: Another area to mention is the GUI. If your fraud prevention tool comes with its own dashboard, you’ll want to be able to customize it and add notes for other team members. It should be a centralized place where you can control, manage, and communicate ideas about how to fight fraud for every department.
• Integration flexibility: Ensure that the system you choose will integrate easily with your existing stack and will allow for the addition of more tools down the line, if you plan to add some. Consider which solutions allow for API integrations and individual API calls, so you can craft a system that suits your needs.
• Data enrichment: Modern online businesses don’t have the luxury of long onboarding processes and lengthy credit checks as it increases churn. Quite simply, data enrichment is a process that will take user-submitted data points, link them to external databases, and give you a better idea of who you’re letting join your platform.

• Low friction and dynamic friction: Data enrichment makes fraud prevention faster, frictionless, and adaptive, as do other checks that do not introduce friction to the customer experience. For dynamic friction, you can rely on your risk scoring to know which users to let through without interruption and who to ask for further verification, to avoid both fraud and false positives. Sometimes, this is called heavy vs light KYC.
• Predictive risk scoring: A key component of your prevention tool will be risk scores. These are calculated using a set of rules – for instance, identifying users with too many logins in a row, visitors using Tor and virtual machines, etc…
• Rule presets: It’s also possible to start with preset rulesets. Just be careful that your fraud management software has rules that were built for businesses similar to yours. If they are too niche, or not tailored for your vertical, you could be wasting a lot of time trying to recalibrate them.
• Custom rules, fields and parameters: You’ll also want the ability to create custom rules. These are essential for improving fraud prevention efforts, as they let you adapt to new attack vectors, uncover fraudsters who have learned the latest ways to imitate legitimate customers, and detect attacks that are very specific and don’t follow a larger pattern.
• Granularity and flexibility: Adapting your line of defense is only really possible if you can work with data that’s relevant to your business. Which is why, once again, flexibility from your fraud management software is key: You’ll want to be able to work with any kind of data, from cryptocurrencies to shoe size.
• Machine learning engine: To scale your efforts when attacks increase in frequency and sophistication, you can make use of machine learning. A ML engine uses an algorithm that trains itself to update the rules or suggests new rules. At SEON, we have worked hard to create a powerful ML engine that suggests rules in a human-readable form via decision trees. This gives you complete power over the algorithms while enjoying the benefits of a powerful system that can process huge amounts of data in real time.
• Real-time results: Time is of the essence. If a fraudster can slip through the net and process a transaction with a stolen credit card number, it’s already too late. You risk losing goods, paying hefty chargeback rates, failing to meet anti-fraud regulations and even paying fines for it. You also want your legitimate users to go through the net without delays. In short, you don’t want your fraud prevention system to be too stringent with good users.

The 10 Best Fraud Management Systems for 2023

There are a range of solutions available with varying expertise and focuses to factor in when making a decision, along with other important variables such as integration, costs, and time. See below some other products on the market today.

SEON – Unique Digital Footprinting and Custom Rules

SEON’s fraud management solution offers full user profiling with real-time data enrichment, phone and email analysis, device fingerprinting, and powerful machine learning rules that deliver accurate predictive risk scores. Deploy our prevention modules individually, or as a complete end-to-end risk management software.

Best of all, SEON is the only fraud management system that you can purchase via a true SaaS model. That includes a completely free version or monthly paid contracts that you can cancel anytime, with a sliding scale depending on your volume of API calls.

SEON Pros

• Unique digital footprinting: SEON uniquely searches for data on any user in real time from 50+ online sources to gauge whether they seem to have the online behavior of a legitimate customer.
• Granular reporting: Easy to navigate and adjust, SEON’s Admin Panel provides granular reporting per customer action.
• Strong velocity checks: SEON is excellent at catching multi-accounting and fraud rings thanks to the device, cookie and browser hashes it generates.
• AML compliance: SEON lets you meet most AML requirements by checking PEP and sanction lists and enabling transaction monitoring.

SEON Cons

• On-premise installation: while you benefit from a wide range of integration options, SEON does not offer on-premise installation. 

SEON Pricing

• Flexible pricing offered based on API calls. There’s a minimum charge of $299 a month, but also a free version with limited API calls.

Choose SEON If:

• You want a modern solution that makes use of customers’ real-time online footprints to catch fraudsters and reward provably good users with a better experience.

Ekata – IDV and Fraud Prevention for Enterprises

Ekata provides fraud prevention and identity verification products with graph and network visualization capabilities to help companies with handling masses amounts. Recently acquired by Mastercard, the company works with AliPay, Microsoft, Stripe, and Airbnb.

While Ekata is a good product to assist with manual reviews (especially thanks to its graph visualization tool), you will be relying on proprietary databases, which can lag behind the latest fraud trends and techniques.

Ekata Pros

• Account opening focus: The vendor homes in on the onboarding and account opening stage, allowing companies to catch fraudsters before they even attempt their schemes – including firms onboarding other merchants, with a separate solution.
• Supports investigations: There is strong emphasis on manual reviews, providing fraud analysts with in-depth information to inform their decisions.
• Graph visualizations: Powerful visualizations courtesy of the Ekata Identity Graph solutions.

Ekata Cons

• Mostly US-focused: although Ekata’s emerging markets data is increasing, the company still has a very US-centric approach.

Ekata Pricing

• Pricing not provided online. Speak to the Ekata team for more.

Choose Ekata If:

• Your fraud management team would appreciate extensive visualizations and link analysis.

Kount – Focus on Ecommerce and Chargeback Prevention

Kount holds data of over 32 billion annual interactions across 250 countries, 75+ industries, 50+ payment processors, and card networks. The company focuses on supporting retail companies with both offline and online presence.

Kount is a fraud manager favorite when it comes to chargeback reduction. This is apparent in the company’s focus on ecommerce, with a partner list including New Balance and Staples, among others. Note that Kount doesn’t offer data enrichment based on phone numbers or social media presence. You do get email data enrichment via the Kount Identity Trust Global Network.

Kount Pros

• Extensive experience: Kount was founded in 2007, and has been capturing data as well as improving its product since. It’s a very reliable name in the industry.
• Focus on ecommerce: With a partner list that includes brands including New Balance, US Polo ASSN and Staples, you can trust Kount to know and understand online retailers’ fraud challenges.
• Hands-free automation: The software is known to learn as it goes, so that eventually a merchant can rely on it to action potential fraud without much supervision.

Kount Cons

• Limited due diligence features: while you can use Kount to confirm identities, there are no options to check PEP or sanction lists for AML, for instance.

Kount Pricing

• This vendor has not made its pricing available online.

Choose Kount If:

• You are an online merchant suffering from numerous chargeback requests.

Signifyd – 100% Chargeback Protection for Merchants

Signifyd provides an end-to-end fraud prevention platform with a 100% chargeback protection model in place to increase automation and remove fraud liability for the merchant. They also offer integrations available across Salesforce, Shopify, and Magento.  

The chargeback guarantee model can be a double-edged sword. On one hand, you can be sure you’ll never have to pay for more chargeback admin fees, which can be costly and time-consuming to manage. However, certain fraud managers prefer having more control over false positives to manage chargebacks based on their risk appetite.

Signifyd Pros

• Ecommerce focus: Merchants can rest assured that Signifyd have in-depth knowledge of their sector, as the company’s focus is on online commerce, as well as, separately, payment companies.
• SCA support: Signifyd works with customers around the world and can help you implement PSD2 compliance, including GDPR for European customers.
• Easy deployment: Customers report ease of deployment – which is much appreciated all around.

Signifyd Cons

• Chargeback guarantee: As we touched upon above, this model can be tricky to get right, as it can lead to false positives and lost revenue as it tends to block good customers.

Signifyd Pricing

• No pricing information available at the time.

Choose Signifyd If:

• You prioritize the money you would get back from a chargeback guarantee over the potential for false positives.

TruValidate (ex Iovation) – Part of the Large TransUnion Anti-Fraud Ecorsystem

Initially making a name for itself as Iovation, TruValidate is a device-based fraud prevention and multi-factor consumer authentication solution acquired by TransUnion in 2018. The company has a database with over 10 billion unique devices and 117 million recorded instances of fraud and abuse. 

The company also has a huge database of malicious IPs, which is useful if you want to automatically block repeat offenders. In terms of real-time data analysis, you will have to purchase an additional solution. It is worth noting that TruValidate first became known as fraud prevention created for the iGaming sector, and remains a great option for companies in that vertical.

TruValidate Pros

• Wide range of anti-fraud products: you can start with TruValidate for ID verification, but also buy TruVision for risk management or TruLookup for OSINT.
• MFA tool: Many customers choose to utilize the provided MFA tool, to further protect their users’ accounts.
• Large databases: while shared relying on databases for ID verification and fraud management has its pros and cons, at least Truvalidate has a large pool of data to choose from.

TruValidate Cons

• Potentially stale data: The fraud prevention provided by TruValidate may run in real-time but some of the data comes from a historical database built across the company’s two decades of experience. Unfortunately, this means some of the information may be outdated, which can lead to false negatives.

TruValidate Pricing

• There is no clear information on TruValidate pricing online, though it is estimated by industry insiders to be affordable.

Choose TruValidate If:

• You are an enterprise customer who needs a full suite of fraud and risk management products from the TransUnion ecosystem. 

Sift – Popular US Vendor with Payment Protection

A former Y Combinator accelerator beneficiary, Sift offers a complete Digital Trust & Safety suite utilizing blackbox machine learning to streamline operations to remove the pressure on human resources. The firm’s main industries are fintech, retail, food, and beverage.

Purchasing Sift is usually done via long-term contracts, and you can add extra products to complete your fraud management tech stack. The real-time data enrichment options are fairly robust – with the only notable exception being reverse social media lookups.

Sift Pros

• Resolve chargebacks: A dedicated module helps merchants to not just avoid but resolve chargebacks when they do happen, to minimize losses.
• AI-powered automation: The machine learning module enables automation, with high accuracy in results.
• Cybersecurity addressed: Sift also addresses cybersecurity concerns, rather than just fraud. In fact, there are several related solutions to help Sift customers.

Sift Cons

• No transparency: Sift employs a blackbox ML model and chooses not to provide explanations for some of the automated actions either. This means that in the case of identified false positives, a merchant can’t easily adjust the system to prevent them in the future.

Sift Pricing

• No pricing information is available online for Sift.

Choose Sift If:

• You’d prefer to set and forget your fraud mitigation tools than be able to customize them on a granular level.

Feedzai – Modular Solutions for Fintech and Finance

Feedzai offers both a complete platform as well as individual solutions to retail banks and other industries. Its main service scans transactions as fast as 3 milliseconds in real-time to spot potential fraudulent activities.

The company tends to focus heavily on the financial institution vertical, but its machine learning and AI-driven system have won praise from fraud managers at big enterprise companies.

Feedzai Pros

• AML compliance: One of Feedzai’s strong suits is being able to support companies in satisfying their AML mandates, mainly due to the focus on fintech and finance.
• Modular API: Feedzai’s modular APIs and custom API fields allow for easier integration into diverse workflows and risk stacks.
• Visualizations: The company aims to make vast, complex data easier to understand (and thus action) through various visualizations, which ultimately speed up decisioning.

Feedzai Cons

• Steep learning curve: Some existing customers opine that it is difficult to learn Feedzai’s solutions compared to its peers, and it is less easy to customize too.

Feedzai Pricing

• There is no pricing information available online for Feedzai.

Choose Feedzai If:

• You’re a company in finance or fintech looking for fraud prevention and AML compliance in one.

FraudHunt – Cloud-Based ID Fingerprinting

Founded in 2013, FraudHunt’s mission is to create a safe environment for online businesses, namely by detecting bots, triggering high-risk alerts, and fingerprinting devices for authentication. 

Its main technology is centred around its Fingerprint ID, which is essentially device and browser fingerprinting. You can call its technology via API, and there is also an affordable $25/month option to access the dashboard and reporting features only.

It’s worth noting that the company has a specific focus on helping marketing companies, as reflected in its Google Analytics integration.

FraudHunt Pros

• Affordable pricing: it starts at $25/month for the dashboard and reporting.
• Google Analytics integration: export FraudHunt data directly into GA to optimize your conversion funnel.

FraudHunt Cons

• More suited for ad networks and ecommerce: FraudHunt isn’t flexible or powerful enough to help companies in verticals such as online retail, fintech, or crypto, for instance.

FraudHunt Pricing

• Pricing starts at $25 for 25,000 registered users and up to $2500 for 10m users.

Choose FraudHunt If:

• You need fraud prevention based mostly on device and browser fingerprinting – especially if you need an integration with Google Analytics.

SumSub – KYC and KYB

Launched as an identity verification solution in 2015, SumSub has grown into a KYC and IDV juggernaut. It also helps that the company offers compliance tools for KYC, AML – and even KYB, or Know Your Business. 

The company, whose name stands for sum and substance, is also known for delivering great fraud management content online, so make sure to keep an eye on their latest industry insights whether you purchase their tools or not.

SumSub Pros

• Everything for KYC and compliance: you get ID verification that includes liveness video checks.
• Case Management option: a powerful tool to help you send reports to regulators from one dashboard.

SumSub Cons

• No data enrichment: SumSub offers more of a traditional ID verification tool, which may be frustrating for customers and risk managers alike.
• Not suited to all fraud risk types: for instance, promo abuse or chargeback issues will need to be managed by another service.

SumSub Pricing

• The Growing pricing is as follows: Basic ($1.35 per verification starting at $149/month); Compliance ($1.85 per verification starting at $299/month); and Flex ($1 per verification with a prepayment of $5000).

Choose SumSub If:

• You need video verification and ID document check, and you have to meet strict regulatory requirements.

SAS – The Banking Risk Management Favorite

SAS, which stands for Statistical Analysis System, is a legacy fraud prevention software that has been going since 1984. It offers a wide range of data analytics products, which have been adopted by a number of traditional financial institutions to manage risk and reduce fraud.

There is a handful of SAS products worth noting for fraud management, namely SAS Continous Monitoring for Procurement Integrity, SAS Detection and Investigation, and SAS Identity 360. 

It is worth noting that as an incumbent enterprise solution, SAS may appear dated in its UX and requires extensive human resources to manage. 

SAS Pros

• Trusted by traditional finance: if you are a Fortune 500 who needs fraud management, you’ll be in good company with SAS.
• Tailored modules: over its decades of existence, SAS has developed or acquired technologies to address almost every corporate pain point, no matter how granular the issue. 

SAS Cons

• Resource-heavy and high-friction integration: SAS offers powerful products that require a lot of manpower to deploy.
• No transparency with regards to pricing: while it’s fair to assume SAS is at the higher end of the pricing spectrum, you’ll have to jump on numerous sales calls to get a quote.
  

SAS Pricing

• Not public. 

Choose SAS If:

• You are an enterprise customer, ideally a traditional banking institution that also needs business intelligence and analytics. 

Choosing a Fraud Management System

Some businesses will need a full end-to-end fraud prevention solution. Others will only need certain modules to create multi-layered security that accomplishes the following:

• Enrich data: Some fraud managers only need to access extra databases to build a more complete profile of their users
• Meet scalability issues: If you have a previous fraud prevention system that hasn’t scaled as fast as your user base, you can add a third-party system to help
• Patch holes in the line of defense: No need to build a brand new fraud management software if your old one is 90% efficient. Sometimes all you need is a 3rd party module with specific goals, such as phone or email lookup, device fingerprinting or IP analysis to bring it up to 100%
• Accelerate manual reviews: Manual reviews are the most resource-heavy part of management, both in terms of time and effort. Adding an extra module could speed it up, if it is integrated properly.

The key point is that you needn’t reinvent the wheel. A good fraud management solution should give you plenty of flexibility on how it works with your business, which is why SEON offers:

• REST APIs for developers
• GUI
• JavaScript snippet or mobile SDKs for our Device Fingerprinting tool
• complete custom integration
• and even a one-click Chrome Extension for data enrichment

Even deploying a full end-to-end solution is surprisingly quick with SEON, allowing you to start flagging risky users in record time.

Before you choose the fraud management system to keep your company, revenue and customers safe, make sure you have not just delved into the various products on offer but also thought in detail about your specific business needs, circumstances and limitations.

In many cases, fraud management vendors will provide demo sessions in which they talk you through their product as it corresponds to your individual needs, and there are also some free trials available.

Take your time when making the final decision. Hopefully, this article has provided a good starting point.

FAQ

You might also be interested in reading about:

• SEON: Best Fraud Detection Software
• SEON: Guide to Ecommerce Fraud Detection & Prevention

Learn more about:

Data Enrichment | Browser Fingerprinting | Device Fingerprinting | Fraud Detection API | Fraud Detection with Machine Learning & AI

Sources

• Fortune Business Insight: Global fraud detection and prevention market value
• Neil Patel: Customer Onboarding: Your Secret Sauce to Reducing SaaS Churn
• The Verge: Forty percent of ‘AI startups’ in Europe don’t actually use AI, claims report