Customer demands for tougher privacy legislation have the unintended consequence of making it much easier for fraudsters to hide their identities online. However, device fingerprinting remains an effective and difficult-to-evade means of identification at this point.
Over time, digital authentication has progressed significantly. It is now possible to trace someone’s internet behavior and identify them. This is referred to as cognitive fingerprinting. But what impact will this have on the fraud detection world? Read further to know more.
A Background
Juan Vucetich Kovacevich, a Croatian-Argentine anthropologist and police chief, had an idea in 1891: he wanted to capture people’s fingerprints and create a database that might be utilized for future criminal investigations. The first fingerprint identification was used to positively identify the genuine culprit of a heinous crime in the same year.
With the arrest of the genuine criminal, a new detection method began to spread over the globe. The same techniques are being used to set a new standard in cybercrime and online fraud detection over a century later: Cognitive Fingerprinting.
What Are the Benefits of Device Fingerprinting?
People are increasingly likely to use numerous devices to complete tasks as they grow more connected and perform an increasing number of actions online. This makes it more difficult for businesses to engage with their target clients on a human level.
This issue is exacerbated by the fact that traditional web tracking methods have become increasingly difficult in recent years. Cookies, which have long been the backbone of digital advertising, are becoming increasingly unworkable in today’s privacy-conscious society.
To begin with, cookies do not provide a reliable method of tracking mobile usage. Second, the consumer can erase cookies at any time.
Finally, cookies make ads and ad campaigns more easily identifiable to ad blockers, ultimately eliminating any chance of a potential customer communicating with an advertiser. This is a serious problem for ROI-conscious advertisers, as adblocker usage is expected to increase by double digits this year.
When cookies fail, device fingerprinting can be used as a backup means of tracking.
Consider the following scenario:
A traveler wishes to schedule a trip to Australia. They click on a banner ad for an all-inclusive package from a travel agency while perusing the internet. However, the individual does not instantly arrange a vacation. Instead, they go to bed and exit their web browser (possibly deleting the cookies associated with the paid advertising they engaged with).
The following day, the person chooses to revisit the travel agency’s website, typing in the agency’s address directly into the online browser. After browsing the site for a while, they end up booking the all-inclusive package they saw in the banner ad.
The travel agency is now unable to precisely assess the ROI of that ad because the conversion was completed a second time and could not be connected to the banner ad via a cookie.
However, device fingerprinting allows us to confirm that the consumer who ordered the vacation package used the same web browser (with the same “fingerprint”) as the ad was previously served.
How Does It Work?
Identity authorization grew increasingly more complicated as technology advanced. It wasn’t so much about what a person knew as it was about who they were. Is it possible to use an unchangeable human trait or characteristic as a unique identifier? Biometrics was founded on this foundation.
The ultimate objective of cognitive fingerprinting is to look beyond physical identifiers and examine behavioral patterns as well. This can aid in the formation of a more accurate online portrait of a person.
There are now some ethical concerns about the levels of surveillance used to monitor people’s online activity.
Users use two tools to access your platform: a device with a web or mobile application and an Internet connection fetches an IP address. This results in the creation of two data sources. They can be found during signup, login, checkout, and even browsing a page. We can extract meaningful information from these data points with the correct solutions.
Encompassed, device fingerprinting is the process of combining information about a browser and a device. It depicts the user’s interaction with your service in detail. It allows us to understand user activity better as well as identify prospective fraudsters.
Is Device Fingerprinting Legal?
Yes. Although privacy advocates argue that the US lacks particular data protection regulations, the EU’s General Data Protection Regulations (GDPR) simply compels corporations to obtain users’ approval before tracking them with cookies.
The GDPR legislative document’s Recital 47 explains:
‘The data controller’s legitimate interest in personal processing data strictly necessary for avoiding fraud also constitutes a legitimate interest. Personal data processing for direct marketing purposes may be considered to be carried out for a legitimate interest.’
As a result, firms must ensure that the information they will be processing is visible or face different consequences.
An Instrument for Full-Proof Protection
One can prevent card testing fraud using device fingerprinting. Many stolen credit card numbers are obtained in bulk by fraudsters, and many have been reported lost or stolen by the time they change hands.
They try to make minor purchases with each card to see which ones are still valid. They know that if a modest transaction goes through, the card is safe to use for a larger fraudulent transaction.
When a merchant uses device fingerprinting, they can identify when the same device has attempted numerous declined transactions and confidently assume they are card testing and prohibit them from making further purchases.
Finishing Up
All in all, using fingerprints to ensure authenticity and security is taking a front seat in online fraud detection. It is becoming increasingly important to protect our privacy while still keeping up with technology’s rapid growth and evolution. We are hence questioning, “How far can we go with innovation before it becomes intrusive?”