FinTech Connects… with Adam Rogas, CEO of NS8
Ecommerce is changing. Purchasing products can be done at the touch of a button (or two, hello SCA) from the comfort of your own home. Ease of access is king.
But as convenience becomes the key to a successful online payment transaction, companies are left weighing frictionless purchasing and simple checkout conversion against the risk of ever more sophisticated fraud and nefarious threats.
We asked NS8 CEO Adam Rogas how the eCommerce space was shaping up, and in what ways NS8 was solving problems in that sphere.
Read on as Adam talks conversion rates, online fraud and biometrics.
What problems does your product solve?
We defend merchants against online fraud, identify digital threats, and offer insight into legitimate customers by utilising behavioral analytics and real-time user scoring. Within our software, businesses have access to metrics for transactions and ad campaigns, insights on suspicious sessions and fraud indicators, and information about conversion rates and revenues, which businesses can then use to create unique rules. It allows merchants to minimise risk and automate fraud management more effectively by building processes and workflows best suited to their unique needs.
We score actions earlier than most competitors—not only by reviewing payment information and user behavior, but also by reviewing pre-session data and noting how users came to the site. This allows for deeper fraud analysis profiles.
What inspired this product?
Our founding team has a range of experience in online advertising, fraud mitigation, and analytics engines. Online fraud was—and still is—a serious threat that is becoming more sophisticated. We had the right combination of expertise necessary to create a solution to the problem, so our team came together to develop technology that would empower businesses to mitigate the effects of high-risk internet traffic and proactively fight the growing epidemic of online fraud.
It was important to us that we build a solution that would be accessible, regardless of the size or type of business. Many fraud solutions need a long ramp-up to gather data or require loads of development before they can get going, but we built our software to be implemented fast so it can identify and help to solve fraud and performance issues immediately. And by offering one-click installation options for merchants who use eCommerce platforms, our solutions are available to SMBs, not just enterprise companies and marketplaces.
What do you see as the top 3 biggest threats to eCommerce?
Data security, fraud, and chargebacks. It’s from these three angles that eCommerce is hit the hardest, and they can each play into each other. Data breaches are an especially notable threat due to the amount of sensitive data and cardholder information that eCommerce companies store, and large-scale breaches regularly make headlines. Criminals are constantly looking for ways to circumvent protection systems and steal what they’re able to get their hands on.
Data breaches can be extremely damaging, but it doesn’t mean that fraud and chargebacks are of any less of importance. These can both take large amounts of time and resources to combat and correct, and repeated incidents can affect a company’s ability to do business by damaging its relationship with payment processors and other service providers. But with proper fraud prevention and risk management strategies in place, combined with effective security and monitoring systems, companies can prevent most of the issues in these categories from affecting them.
How will SCA affect eCommerce?
Friction is a hot topic right now, and understandably businesses are concerned that the added step that SCA requires will be a conversion killer. But increasing trust and establishing a baseline expectation about security is a good thing. It will help standardise how merchants and payment processors validate transactions, and it will communicate to customers that we, both as businesses and as an industry, care about their trust and security.
Customers can be resistant when faced with hurdles in their user experience, but they’re okay with them if they know that the extra steps are there for their safety. The busy holiday season is coming up and I think the data we glean from transactions during this time will show that SCA isn’t going to have as significant of a negative impact that businesses are fearing it will.
Sure, some customers won't like it, but any push-back will be far outweighed by the amount of prevented fraud, chargebacks, and theft thanks to this required authentication. As with anything new, it just takes some getting used to.
What are the most exciting anti-fraud technologies on the scene?
AI, machine learning, and predictive analytics. With fraudsters continuously evolving and planning smarter attacks, the best way to stay ahead of them is by training machine learning models to preemptively mitigate fraudulent activity and detect it at the earliest stage possible. These models can then automatically adjust for scenarios and update rules in real time based on the emerging threat and its context.
Previously, a human would have to periodically review data after the fact, then manually make any needed adjustments themselves. This approach not only leaves room for mistakes, but it’s also slow. Reactive-based fraud strategies are on their way out and soon will no longer be effective.
Biometrics in fraud prevention is another technology that’s expected to become more prevalent in the next few years, and SCA is likely going to give it a big push. With some form of biometrics already available on most modern smartphones, it makes sense that it will become a more common part of fraud prevention technology as yet another way for users to verify payments and confirm their identities.
But there’s a flip side. While biometrics can be used to fight fraud, it can also be used to commit fraud. As fraudsters inevitably learn how to imitate the biometric identities of users, companies will have to incorporate ways to detect and prevent these attempts as part of their fraud prevention strategy as well.