On January 17th we invited senior executives from America’s leading mobile apps for a virtual roundtable to discuss the key fraud challenges facing businesses today and the evolution of the responsibilities of the fraud team. Guests included executives from GrubHub, Stitch Fix, Upgrade, and more.
To begin with, participants discussed the various challenges they were struggling with in regards to mobile fraud. Executives from fintech apps spoke about the problems surrounding validating new accounts, and how preventing fraud on both checking and loan accounts differed. One important use case that was also discussed was transaction laundering and how it affected financial institutions.
An executive from a food delivery app also brought up a new type of fraud they’ve been facing - return fraud. They explained that they had seen several of their delivery drivers commit fraud using a customer account. Before they were exposed as the company’s drivers, the executive explained that this had damaged trust in their existing user base, as they assumed it was their users that were committing fraud, not their drivers.
The discussion progressed with several participants agreeing that they faced issues detecting when the same user came back using a different account, and when the same device was used to access multiple accounts. The discussion also steered towards the topic of ‘good’ fraud, which is when fraud conducted has little to no impact on a business, and the balance between promoting a product and stopping fraudsters.
A major theme in the discussion was how the role of the fraud team has evolved over the years. Executives discussed how fraud no longer included just payment and credit card fraud, but had instead shifted to include new types of fraud such as refund and promo abuse. One participant pointed out how AI and machine learning technologies had become essential to stopping fraud. They argued that instead of being reactive and managing rules, companies need to start harnessing AI and ML to detect and stop fraud before it happens.
Participants also exchanged views on whether they should allow small amounts of fraud to pass through since the repercussions on good customers could be much bigger with a strict, overbearing fraud prevention system.
In the final stages of the roundtable, participants shared their predictions on the future of mobile app fraud prevention in the US. An executive from a retail app felt that companies would not be able to keep up. Fraudsters are getting smarter and more innovative in their quest to defraud mobile apps. Realistically, businesses will not be able to catch everyone. They argued that whilst fraud may not damage most companies’ bottom line, stopping fraud is the ethical and right thing for companies to do.
