The two guiding principles of Arkose Labs are to keep digital transactions safe while enhancing the online experience for good consumers. When Kevin and I founded Arkose Labs, I had a background of 20+ years working in video game development. This brings a unique perspective within the fraud-fighting community - one very much grounded in UX.
Gartner, in its latest report, Cool Vendors in Identity and Access Management and Fraud Detection 2020, notes that balancing fraud detection and mitigation with reduced friction and seamless user experience is more important now than ever before. The consulting firm recommends that fraud prevention teams must “adopt fraud detection mechanisms that work in the background, without interrupting the user flow to balance the need to detect and mitigate fraud with the requirement to minimize friction.”
Globally, consumers are taking the digital route to access services and products. The coronavirus-induced lockdown has introduced a large number of first-timers to the digital realm. In fact, the pace of digital adoption during the lockdown has surpassed the digital adoption projected for five years, says a McKinsey report. Of these first-timers, 75% say they will continue using digital channels even when the situation normalizes. This is because the digital world provides them with the convenience of any time, anywhere, and device-agnostic access.
Digital businesses, therefore, have an opportunity in hand on which they can capitalize. They must engage with this growing customer base and build strong customer relationships. However, high friction levels during the course of the online journey can be a spoil-sport and cause consumers to look for alternatives. Therefore, apart from offering personalized services, digital businesses must focus on reducing friction across touchpoints. This should also include a fraud prevention mechanism that keeps the user experience front and center at all times.
Fraud-prevention is a double-edged sword
Digital businesses are trying to cope with evolving customer needs and providing them with seamless user experience. They are harnessing data to identify the problem areas and are taking remedial action. They are also putting in a lot of effort trying to upgrade user experience across digital touchpoints—from sign-up to onboarding to checkout.
However, all of this activity can translate into lowering the barriers, which can open up the gateway to fraud. Aware of these holes, fraudsters are exploiting them to their own advantage. They use stolen customer information to impersonate true users and merge with genuine traffic.
A deluge of malicious traffic and fraudulent activity is making fraud prevention all the more challenging for digital businesses. In fact, it is proving to be a double-edged sword. Should businesses loosen their verification mechanisms, they run the risk of fraudsters exploiting their business ecosystems. And, if they enhance authentication, they run the risk of alienating and, in the worst cases, losing customers.
Balancing fraud prevention with user experience
Digital businesses today are walking a tightrope trying to enhance the user experience, while keeping fraudsters at bay. Their dependence on legacy or point solutions fail them in fighting the ever-evolving fraud types. Data-driven fraud solutions, too, are not so trustworthy because fraudsters have manipulated digital identities at scale and can mimic true user behavior to fool fraud-prevention teams. Besides, these solutions increase friction across touchpoints, which can frustrate the good users.
To effectively fight fraud while enhancing user experience, businesses need a fraud prevention mechanism that provides robust challenging of risky traffic, without damaging user experience for good users. Arkose Labs' solution helps global businesses use friction prudently to ensure only good users access their business ecosystems.
Gartner recognizes Arkose Labs as a ‘Cool Vendor’
The Arkose Labs platform uses context-based 3D challenges to efficiently root out automated as well as human-driven attacks. Since the puzzles use brand elements of the business, there is no disruption to the user experience when users proceed to prove their authenticity. While good users find the challenges fun and clear them easily, bots fail instantly. This is because automatic solvers cannot solve these 3D challenges, and every time the solvers are adapted to make progress, the challenge changes and resets that effort.
Malicious humans, click farms, and sweatshops face incrementally more time-consuming challenges. When these humans spend more time and resources trying to clear the challenges at scale, the returns from the attack deplete quickly. The attack becomes financially unattractive and forces fraudsters to give up.
This ability to strike a fine balance between efficient fraud prevention and enhanced user experience is the reason Gartner has recognized Arkose Labs as a Cool Vendor in its latest report. To request your copy of the report, click ‘Download’ below.