The shift from desktop to mobile-first is well underway and, as the US market develops, it will follow suit here too.
TransUnion’s fraud prevention company iovation recently released its findings on mobile adoption and risky transactions, which showed that North America was the most targeted continent in 2019.
Angie White, product marketing manager at iovation, says the results, based on 30 billion transactions that iovation evaluated from its customers over the last few years, reinforces the company’s belief that US operators must consider their protective measures diligently.
Mobile: a risky business?
White says that iovation wanted to challenge the perception that mobile applications are inherently more secure than either mobile web or web based transactions. “What we found is that fraudsters are absolutely leveraging mobile devices to commit fraud.
“Looking at transactions we process across all industries, we saw 61% of transactions come from mobile in 2019, a steady increase over 2018 at 56% and 2017 at 51%. Likewise, we’ve also seen a growth in fraudulent transactions originating from a mobile device, hitting 49% in the first half of 2019. This is a big jump from 2018 when we saw only 30% of risky transactions originating from mobile, an increase of 63%.”
For the record, iovation defines risky transactions as those that its customers either deny or review further due to fraudulent indicators.
When looking specifically at gambling, iovation saw that mobile transactions account for 72% of all transactions, outpacing most other segments, including online banking and e-commerce.
Interestingly, however, White points out that risky transactions from mobile devices decreased for gambling from 60% in 2018 to 44% in the first half of 2019, while it increased for most other industries iovation tracks.
She comments: “This could indicate that operators are ahead of the game in protecting their mobile channels and fraudsters are shifting to easier targets.”
The top continents for mobile fraud so far in 2019 are North America with 59% of all risky transactions, followed by Asia with 55%. In 2018, Asia was first with 53%, while in 2017 and 2016 North America led the rankings, with 55% and 36% respectively.
When examining the data, White says the perception that mobile applications are more secure isn’t true—fraudsters are moving to where the business is and where the vulnerabilities are.
Key risk points
White feels that fraudsters may target the US market more than others because the market is so embryonic. A similar situation was seen in Europe when igaming was in its infancy there.
“In those days, they were in such a rush to get players in and get games launched that they really weren’t thinking through fraud prevention controls. Fraudsters will be testing the theory that the tools will be less mature and targeting those newer operations to see if they can find those vulnerabilities.”
There are a number of risk indicators that iovation monitors to prevent mobile fraud, such as mobile emulators, device orientation, SIM card country and carrier name, currency, language, and mobile OS versions, according to White.
The biggest takeaway, she says, is to know that fraudsters are constantly adapting and evolving their tactics. To this end, it’s important to take a holistic approach to fraud prevention.
“Since 2004, iovation has evaluated over six billion devices for risky behavior and protected more than 45 billion transactions for 35,000 brands globally. We’re constantly analyzing fraud trends and adapting our technology to better defend against attacks.
“A great example of this is our enhanced mobile fraud prevention offerings, which include new capabilities that are used for tracking anomalous behaviors and risky attributes specific to mobile devices.”
For US operators concerned about fraud, she recommends striking a balance between regulatory compliance and customer experience by thinking through how they can automate, and reduce friction and latency.
She concludes by commenting on some of the predominant trends she forecasts iovation will see for the US in their next report as we move into 2020: “I expect we’ll see adoption level even out a little bit. Our suspicion is that because operators are ahead with mobile adoption for players, they’ve put in controls after seeing the early fraud attacks. It’ll be interesting to see if it comes back around in igaming.”