Berbix at the Marketplace Risk Conference 2022

At this year’s Marketplace Risk Conference, Eric Levine, the CEO and co-founder of Berbix, gave a talk about how you need to be thinking about fraud to protect your business and customers.

In case you missed it, here are three key takeaways from his talk:

Fraud affects everyone

Fraud comes in all shapes and sizes, so whether you’re a new business owner or you’ve been in the industry for decades, you will, unfortunately, encounter fraud. Fraud can happen due to a customer mistakenly incorrectly entering their information or an employee sharing confidential information with a competitor to do harm against your brand.

No matter how stringent your policies are, you’ll get hit with fraud at least once in the course of your business or career, with varying consequences. In cases of accidental fraud– like a customer accidentally spelling their name wrong– the financial fallout could be low. For more targeted attacks, however, fraud could potentially cripple your business. 46% of companies have experienced fraud within the last 24 months, costing them $42 billion dollars worldwide.

Money is the primary motivation for fraudsters

Fraudsters attack businesses for a variety of reasons: fame, getting revenge, the desire to damage the brand, gaining competitive intelligence, and so on. By and large, however, most fraudsters are driven by a desire for money above all else. This, of course, means that the larger and more profitable your business becomes, the more susceptible to attack you are.

This doesn’t mean that businesses shouldn’t try to become as profitable as possible or fear success. It also doesn’t mean that businesses shouldn’t fear global expansion. Instead, understanding that most fraudsters are after money can be extremely helpful when thinking of fraud deterrence measures– such as making it as expensive as possible for a potential bad actor to target your business.

And the best way to do this is…

Thinking like a fraudster is the only way to fight fraud

Understanding why someone would try and commit fraud against you is one of the only ways to successfully deter fraud without sacrificing the customer experience. Fraudsters by and large want to take your money, and they want to do so without facing any legal, social, or financial repercussions.

As Eric mentioned in his talk, this means that most fraudsters will go to great lengths to hide their real, offline identities behind a fake, online identity. Whether their fake identity is another real person or someone that’s completely fabricated doesn’t really matter– to prevent them from successfully targeting your business, you’ll need to focus on creating processes that work to unmask fraudsters and tie their fake, online identity to their real, offline one.

The best way to do this is through one-to-one mapping: creating a link between someone’s online identity to their offline one. Many businesses use one-to-one mapping through having a customer sign up for their services with their phone number or email. The best way to deter fraud, however, is to have potential customers leverage their government-issued ID and real-time selfie to access your services.

While it can be fairly easy to purchase a fake ID online, what’s more difficult is not getting caught. With one-to-one mapping and an ID verification solution, the same exact ID will need to be used each time– if it isn’t, their information will be flagged as a duplicate ID, enabling you to block them from using your services.

Fraudsters by and large typically won’t want to go through a process such as an ID check. This can direct them away from your business, potentially protecting you from fraud before it even starts.

Interested in learning more about how to protect your business and customers from fraud? Check out the Berbix experience here: