User Activity Monitoring Explained: Examples and Best Practices

User activity monitoring sounds straightforward – until you begin digging into its many uses.

Let’s do just that, making things as easy to follow as we can, with a specific focus on how to improve it in the context of risk management.

What Is User Activity Monitoring?

User activity monitoring (UAM), also known as user access monitoring, refers to frameworks set in place to log and track user actions on devices, networks, or websites. Note that the term user may refer to customers, visitors, or even company employees. 

The goal of UAM is to analyze data about how users are interacting with a website, app, or other digital product and develop useful insights about that data. It can be used to segment customer bases, improve the efficiency of all kinds of internal business practices, and, especially, reduce risk in the context of cybersecurity, fraud detection, and IT security.

This kind of data is crucial internally to optimize workflows and improve ROI for various sales and marketing functions, as well as to improve overall customer experiences. Even more importantly, that same ROI can be preserved from financial and reputational damage when it is turned onto fraudsters, detecting them before they can be an issue by identifying patterns of malicious behavior, regardless of whether the fraud threat is internal or external.

How Does User Activity Monitoring Work?

User activity monitoring works by gathering user activity data on a website, server, device, or app. The data is labeled and sorted in order to be interpreted by organizations, either for marketing, security, or productivity purposes.

For user activity monitoring to work, a company must deploy specific tools that are either built-in, developed in-house, or purchased and integrated, usually via a SaaS model. 

Some user activity monitoring solutions focus on recording key actions (such as clicking on buttons or opening web links), while other tools offer more sophisticated session recordings, capturing every action in video form.

What Data Is Collected from it?

The B2B market is abundant with tools and features designed to capture as much valuable user data as possible. A non-exhaustive list of these include:

However, collecting every data point isn’t always efficient. Depending on your user activity monitoring strategy, it’s much more effective to focus on specific data points rather than taking a one-size-fits-all approach or getting lost in endless data. 

These days, most software comes with user logging, so you have full visibility of which user has done what and can both monitor suspicious activity and dig into what happened if something went wrong. That is a start – but for many use cases, you would want to capture even more.

5 Reasons to Implement User Activity Monitoring

Wherever there are people, there is both profit and risk. Though UAM can be used to guardrail ROI and create user experiences that may result in a growing user base, its uses for fraud prevention are better for the solvency of any company in the long-term. Without good data and monitoring practices, fraud will inevitably become a problem that could snowball into more than just lost money or product, but also legal woes and massive fines.

More specifically, here are 5 reasons that UAM should be a priority for any company operating in any digital sphere:

1. Data Security

One of the key reasons to monitor users is to secure a company’s data, both physically (IT security) and digitally (cybersecurity). In 2022, the average cost of a data breach reached a record $3.86 million, according to IBM.

Regardless of whether the warning signs exist inside internal SQL databases, OS, or other administrative commands, malicious patterns associated with potential data breaches can be detected when a comprehensive UAM platform is implemented. This is true no matter if the patterns originate from customers, employees, or executives. Any kind of unwanted change will be logged – and potentially blocked depending on its severity. 

2. Legal and Compliance

Ensuring compliance is a growing reason to deploy user activity monitoring software.

Compliance monitoring, for instance, is a regulatory requirement for companies in the context of KYC and AML. It also involves looking at user data and behavior. In this example, the relevant data must also be logged when submitting a suspicious activity report, aka SAR. 

Here, again, the goal is to reduce risk. Namely, the risk of having to pay a heavy compliance fine by allowing identity thieves and money launderers to interact with your business. 

3. Affiliate Security

Web analytics are a major part of user activity monitoring. Marketing teams will certainly use user activity monitoring services and web analytics to improve website experiences and, ultimately, the road to checkout. However, any marketing team employing affiliate programs like pay-per-click should also be using that data to catch fraudulent affiliates.

A particular problem for companies large enough to have automated affiliate onboarding systems in place, there are plenty of shady online outfits that exist purely to take advantage of various PPC marketing campaigns. PPC affiliates can collect a premium for directing traffic to a website offering such a campaign. UAM can help detect fraudulent affiliates directing either bot traffic to partner sites and then collecting the payout for the apparently legit traffic. In other cases, fraudsters mislead real people to the site through pop-ups, layered links, or other malicious online practices – naturally, these rarely lead to a sale.

4. Fraud Prevention

User monitoring is a core feature of fraud prevention. You want to be able to separate legitimate customers from fraudsters. This involves collecting data relating to the following:

• The user’s identity, either through document verification steps or digital footprint analysis, which looks at alternative data such as their device setup and social media activity.
• The user’s behavior: By monitoring and comparing user actions (for instance, a signup or money deposit), we can identify suspicious behavior that may point to fraud or high-risk customers.
• The user’s connections: The user may be part of a fraud ring or multi-accounting. To stop them, we will be looking at similarities in data points to catch as many members and related accounts as possible. 

The kind of user activity monitoring features you need for fraud prevention varies depending on your business model – which is why we strongly recommend going through our risk assessment checklist to get started.

5. Bot Detection

Another important aspect of fraud prevention is the ability to detect when a user is exhibiting behavior that is less like a real person and more like an automated bot – a sadly common tool of many fraudsters.UAM is overwhelmingly important when it comes to bot detection. Of course, bots interact with apps and websites very differently from humans, and since many fraudsters use bots at scale, with dozens or even thousands of bots, these interactions are repeated and thus easier to flag as bad traffic. Users that repeat the exact same usage pattern, move at inhuman speeds, or attempt to shove themselves through a single gateway at once for attacks like credential stuffing are easily detected with UAM – indeed, this is one of the primary functions of a strong user activity monitoring system.

Best Practices for User Activity Monitoring

While every company can benefit from user activity monitoring, it can also be seen as a controversial practice, especially for users who value their privacy. This is why it is important to respect the best practices.

• Be transparent about user activity monitoring: the users, whether they are employees or online customers, should be aware of the ongoing monitoring, whether it’s stated in an online policy, terms, and conditions, or a contractual agreement.
  
• Anonymize data when possible: while you can monitor user actions and link them to a specific account, it is often beneficial to hide these connections if possible, for instance via tokenization or using data hashes.
  
• Allow privileged access to the data: in another effort to minimize the potential for falling foul of data privacy regulations, you should only allow certain positions to access the data (for instance, data analysts, marketers, or cybersecurity experts).
  
• Draft better data protection policies: these should include your monitoring actions outlining acceptable use, your handling of sensitive data, authorized services and applications, etc.
  
• Be vigilant with third-party providers: it’s crucial to understand your obligations as a company, but also to double-check whether the company that provides your user activity monitoring solution is also fully compliant with data protection regulations.

Finally, it’s also worth considering how you choose your user activity monitoring solution, as multiple user activity monitoring tools can be combined into one. For instance, marketing analytics and fraud prevention software for user activity monitoring may have overlapping features.

How Can SEON Help With User Activity Monitoring?

SEON is a complete full user activity monitoring software designed to work in the context of risk management and fraud prevention. It works in three steps: capturing user data, enriching it to complete the picture, and feeding the data through risk rules. This process helps you measure how risky user actions are in order to:

• automatically flag suspicious user behavior
• block suspicious logins and signups with stolen or made-up data
• run more effective KYC and AML checks
• segment users into low, medium, or high-risk categories
• segment users into high-value or low-value customers
• and, of course, reduce all kinds of fraud, from payment fraud to bonus abuse and chargebacks

A key benefit of the SEON platform is the ability to use velocity rules, which look at user data actions within a specific timeframe. For instance, multiple login attempts, or a suspiciously high number of password resets can be flagged for review by your risk team.

Whether you need the risk in the context of compliance, fraud attacks, or even stolen user accounts, SEON has got you covered.

Frequently Asked Questions

Sources

• IBM: How much does a data breach cost in 2022?
• Zoom: Attendee attention tracking
• BJA: Electronic Communications Privacy Act of 1986 (ECPA)