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When Is It Best to Use a Fraud Prevention API?

When Is It Best to Use a Fraud Prevention API?

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by Bence Jendruszak

Fraud prevention APIs give you a lot of flexibility and control – but are they the right solution for you?

APIs, which stand for Application Programming Interfaces, are designed to let two systems work together. That means enabling an integration to communicate and share data seamlessly, usually for web-apps.

But when it comes to prevention, they’re just one of the many ways you can protect your business, even as fraud shows no signs of slowing down. So let’s see if it’s really the best solution for you, right after we explain how general anti fraud systems work these days.

Understanding Basic Fraud Prevention

To prevent your business against fraudsters, you need to know more about each customer. This is done by gathering the data they submit, either manually (with subscription fields, for instance), or behind the scenes, with digital footprint analysis and data enrichment.

Here is a breakdown of the three concepts:

  • User-submitted data: you allow them to enter a name, login, email address, or credit card number. This can work at onboarding, signup, login, payment, or deposit and withdrawal.
  • Digital footprint analysis: every visitor on your website has a footprint that includes data like IP address, operating system, browser used, and much more. You need special tools to gather that data.
  • Data enrichment: you can use data from the two categories above, and enrich it to end up with even more data about the user. More importantly, you can check for discrepancies, such as an IP address in one country, and a credit card billing address in another.

Then, all that data is used to create risk rules. These can be offered by the anti fraud tool, created manually, or suggested by Machine-Learning. These rules will deliver a score, ideally in human-readable form, so that you can trigger actions automatically, such as:

  • Approving a transaction
  • Declining login for a suspicious user
  • Sending the user action to manual review to the team
  • Trigger additional authentication for a new user signup
  • And much more…

Processing large amounts of data

As you can see from the examples above, there is a lot of data to send to your fraud prevention system. But more importantly,  not all businesses will need to look at the same kind of data. For instance, a cryptocurrency exchange might perform a kind of digital risk assessment or customer profiling analysis, whereas an online store will focus on what kinds of items are being purchased.

The key point to take away, however, is that all that data needs to reach your system. If yours is built directly into your platform, no problem. But for third-party providers, this is where it helps to use fraud prevention APIs.

Benefit #1 of using Fraud Prevention APIs: Good for Scaling

Regardless of how talented or efficient your team is, there’s simply no way to review all the user data manually. This is where APIs really shine: by offering fast queries and responses for hundreds of thousands of user logins, transactions, or signups. The speed is particularly important for businesses and their users, which is why SEON’s solution delivers results under 1 second only.

Benefit #2 APIs Help Automate Everything

Because APIs connect to web apps, there’s no need to constantly tweak them or wait for IT updates. All the fixes and improvements are made from the server-side, so you can concentrate on your own business instead. It’s not only cheaper in terms of IT resources, but also much more efficient and fast.

Benefit #3 They make Life Easier for Developers

APIs come with their own documentation, which helps developers code between two systems with a common language. So they don’t have to learn the ins and outs of a full fraud prevention engine’s code, they only need to look at the documentation to understand exactly how quickly they can access certain functions. Once again, this saves time and effort for the whole IT team, and helps make your fraud system more cost-effective.

Benefit #4 Flexibility and Customization Options

As previously mentioned, the kind of data you work with will be very different if you are, say, an online casino or a loan provider. Luckily, APIs are one of the most flexible solutions when it comes to custom data fields. What’s more, you can use them to create a modular fraud detection layer that only looks at the functions you need the most, giving you complete control over tailoring it to your business goals.

Benefit #5 Pay Per API Request

This isn’t always standard practice, and especially not in the world of fraud tech. But at SEON, we are proud to offer a pricing model that adapts to your business needs and auto scales depending on how many API requests you make per month.

What Exactly Can you Do With Fraud Prevention APIs?

Everything that a built-in tool can, such as:

  • Enriching data to learn more about a user based on very few data points. This means you can create a smooth onboarding process without friction, and get the full picture by running your fraud engine behind the scenes.
  • Find social data of your users: an incredibly popular feature of our tool, which has been shown to flag 76% of defaulting customers for loan providers. You can see if the user has social media accounts registered through the same phone number or email address, and gather that data to learn more about them.
  • Device fingerprinting: learn everything there is to know about how your users connect to your site. Are they using a virtual machine? Or an emulator? What about the actual device, operating system and browser? You’d be surprised at how much device fingerprinting can reveal to spot fraudsters as soon as they land on your site.

How SEON Does Fraud APIs

At SEON, we have put a lot of thought and care into crafting our REST APIs to enable complete flexibility. And we know APIs are only as good as their documentation, which is why you will find it thorough and well written so integration is as fast and seamless as possible.

Last but not least, we take great care of delivering the best uptime possible, which is why, for the sake of transparency, you can check our 100% online status directly on our website.

Ready to start integrating fraud prevention APIs into your platform today? Don’t hesitate to contact us for a call or to try our solution for free.

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Author avatar
Bence Jendruszak

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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