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.
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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.
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.
Is User Activity Monitoring Illegal?
No, user activity monitoring is not illegal – broadly speaking, at least. In fact, the GDPR specifically states that user monitoring is legal when necessary for the purpose of preventing fraud and for targeted marketing:
“The processing of personal data strictly necessary for the purposes of preventing fraud also constitutes a legitimate interest of the data controller concerned. The processing of personal data for direct marketing purposes may be regarded as carried out for a legitimate interest.”
However, the fact that user activity monitoring essentially amounts to a form of surveillance makes things a little more complicated. It means that restrictions come into play around how data is collected, stored and used (courtesy of the GDPR in Europe and the Electronic Communications Privacy Act and Stored Wire Electronic Communications Act in the US).
The crux of this, so far as GDPR is concerned, is that UAM data may include personal data. This brings requirements around data obfuscation, encryption, and retention into the spotlight. Over in the US, state-level legislation comes into play as well, meaning that every business must pay close attention to the requirements of multiple pieces of legislation if it is to remain on the right side of the law when monitoring user activity.
User Activity Monitoring Tools
UAM tools pack in plenty of features to help businesses meet a range of monitoring requirements. These include the ability to monitor multiple users and to dive into a single user’s activity where necessary. The tools cover all manner of monitoring, including actions taken at application, system, and network level, as well as data monitoring.
Many tools include handy alerting features. This means that when a user takes a certain action – such as attempting to access an unauthorized file – the UAM tool automatically sends an alert to the designated recipient. This can be a powerful real-time defense against attempted fraud and other crimes.
Other UAM tool features relate to the way that data and activities are stored. Some tools, for example, will take a screenshot or video, providing an easy way to see precisely which actions a user has taken.
UAM tools with a specific focus provide additional features. Productivity-focused tools, for example, include time and attendance monitoring functionality and often the ability to differentiate between productive and unproductive time. Compliance- and security-focused UAM tools, meanwhile, provide the ability to block any user actions deemed non-compliant or suspicious.
5 Reasons to Implement User Activity Monitoring
Implementing user activity monitoring delivers deep insights into how users are behaving, whether internal staff members or external customers. This means that businesses can make better-informed, data-driven decisions on a range of matters. They can use anything from organization-wide data to individual use cases to inform their thinking and actions.
This puts businesses in a strong position to fight fraud, safeguard their data, assess risks, identify short- and long-term trends, meet legal and compliance obligations, and more, as well as to take a more strategic, informed approach to their future plans.
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.
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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 for UAM
Most companies rely on user activity monitoring software, which logs and records user data. The features may include keylogging, video recordings, or data logs.
User activity includes any kind of interaction on your server, system, app, or website. This may be a transaction, a signup, a login, or even browsing and filling out a form.
User activity monitoring looks at all kinds of user actions, while user access monitoring tends to only focus on access permissions. However, both terms are increasingly used interchangeably, and both are often shortened to UAM.
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Bence Jendruszák is the Chief Operating Officer and co-founder of SEON. Thanks to his leadership, the company received the biggest Series A in Hungarian history in 2021. Bence is passionate about cybersecurity and its overlap with business success. You can find him leading webinars with industry leaders on topics such as iGaming fraud, identity proofing or machine learning (when he’s not brewing questionable coffee for his colleagues).
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