Sadly, there seems to be a very long list of things to worry about these days; from climate change, to conflict to inflation. These problems will affect us all and are undoubtedly in need of attention. However, without being a harbinger of doom, there are other day-to-day threats that individuals must ensure they’re not overlooking. So, without further ado, let me drop another item into that sea of concern and explain an issue, which must also be on your radar, the growing risks of online fraud and the need for effective fraud prevention systems.
There are so many ways to go about explaining the problems associated with online fraud, but in the interest of simplicity, I’ll make my case primarily in monetary terms. For one, more than USD $6.9 billion was lost to online fraud scams in the US alone throughout 2021, which represented a 69% year-on-year increase from 2020. In the same year, American consumers lost more than USD $5.8 billion to online fraud scams, with more than 2.8 million individuals claiming to have been targeted.
The only area of the US economy that seems to be growing at a similar rate to online fraud attempts is that of new startup businesses. As estimated by WeWork, over 5.4 million new businesses were registered in the United States during 2021. Unfortunately, there may be a link between these two areas of seismic growth. To this end, for the most part, new startups lack the cybersecurity infrastructure needed to effectively protect against the threat of online fraud and are therefore more likely to be targeted.
This issue has not happened in a vacuum. For many years, the cybersecurity market has been dominated by ‘locked in’ product stacks, which necessitated long-term, expensive leasing agreements. Such proposals were largely unviable for startups, especially those at pre-seed stages of investment. In turn, many startup businesses looked at cybersecurity as an ‘add-on’, or worse still, chose to ignore the issue altogether.
Understanding the threat
The sheer number of online fraud attacks occurring has proliferated dramatically in recent years. That’s probably why the online fraud prevention market is currently estimated at USD $29.2bn globally, with the US market accounting for USD $9.8bn of that. By 2029, some commentators believe this global figure could be as high as USD $129.1bn, thus underlying the unfortunate staying power of online fraud within our interconnected, online world.
It might sound a bit cliched, but education really is the first step to overcoming cybersecurity problems, especially within scaling businesses, such as startups. With the right knowledge, individuals can recognize the warning signs of online fraud ahead of time and may have the opportunity to stop an attack dead in its tracks before it causes too much damage. What’s more, education on the subject can lead startups to find modern fraud prevention solutions that truly work.
New era for fraud prevention
In recent years, the market has seen the rise of new, tech-first providers who focus on offering accessible and affordable solutions, which can be easily integrated into existing product stacks and, which aren’t inevitably tied to long-term, inflexible leasing arrangements. These providers are not limited to a singular industry either, with many banking, insurance, iGaming, travel, and eCommerce businesses adopting new fraud prevention solutions. Chief among these businesses is SEON, the go-to fraud prevention company for some of the world’s coolest and fastest-growing businesses, including Revolut, Sorare and mollie.
SEON’s system uses accessible data to determine an individual’s digital footprint based on their email address, phone number, IP address, or location in real-time. By analyzing this digital footprint across over 50 different digital lending platforms, companies are better able to determine fraudulent transactions. As such, the solution makes life easier for anyone looking to safeguard transactions, giving them round-the-clock access to a platform which contains all the information needed to fight fraud.
The choice for startups
By focusing on adaptable, plug-and-play API integrations, which can be operated via a single interface, SEON is helping businesses, including startups, to enact stringent and effective online fraud prevention protocols. In fact, SEON’s accessible and flexible solution can be onboarded by startups in a matter of minutes, and is capable of delivering instant results, thus delivering an instant return on investment.
Better still, startups are able to take advantage of a free, multi-day trial of the system before they make a financial commitment. With no setup fees, or upfront costs, the totally modular solution is enabling companies to engage with online fraud prevention in a meaningful way. Not only this, SEON offers startups a support network which can assist them on their journey to becoming online fraud fighters quickly and efficiently. In making the process as smooth as possible, startups are afforded the same level of online fraud prevention protection as larger counterparts, which was previously considered unimaginable.
Moving beyond protection
SEON’s powerful, data-first system isn’t only capable of helping to democratize the battle against online fraud, but can provide startup companies with valuable insights into their user bases. Through its data enrichment solution, SEON’s platform can help startup businesses to engage in more accurate customer segmentation. This simple step has been proven to help companies boost revenue, improve customer satisfaction, and maximize value.
Rather than just providing basic information about a customer’s gender, age, or place of residence, SEON’s system can deliver insights on things like social media presence, technographic preferences and user behaviors. This granular data can then be used by startups to refine additional aspects of their business offering. As such, the company’s unique solution has much more value than a standard online fraud prevention system, which makes it the perfect choice for startups.
Jimmy Fong is a contributor to Grit Daily News and CCO at SEON. He is a young veteran in the fraud detection space. Three startups focused on fraud and payments which he has been involved with have been acquired by Visa, Ingenico and American Express. He’s a regular speaker on disruptive technology in the fintech space and a massive advocate of flattening the tech barrier for merchants and financial institutions to fight fraud effectively.