LAS VEGAS, Nev. – Matt Anthony often has a unique experience when promoting Pindrop Security to prospective clients.
They agree on its merits, but because it benefits so many areas, the company actually has to have internal discussions about who should work directly with Pindrop.
“I have actually had to organize meetings to introduce different departments of the same company to each other,” Mr. Anthony admitted.
We spoke at this fall’s Money20/20 conference in Las Vegas. With more than 10,000 attendees from around the world, it is an important gathering place for the fin-tech industry.
In brief, Pindrop analyzes phone calls, Mr. Anthony said.
“It is our mission to figure out who is really on the phone.”
Pindrop works with enterprise call centers to identify both fraudsters and legitimate clients, with the goal of eliminating the former and improving the latter’s experience.
They begin by analyzing all background noise on a call. Pindrop’s technology can identify where the call originated and the type of device and system it came from. That creates a unique identifier so they can quickly identify that caller the next time they dial in to a client call center.
“Put all that together and you have a technology where we are flagging 80 to 90 percent of all fraudulent calls with less than a one percent false positive rate,” Mr. Anthony said.
Pindrop’s clients include major banks and retailers with large call centers. Such entities can receive as many as 80 million calls per year, Mr. Anthony said. With Pindrop research revealing that one in 2,600 calls is fraudulent, that means a large company can receive more than 30,000 phone fraud attempts each year, or 80 each day.
And each call receives a Pindrop score, Mr. Anthony said. Any call receiving a score of 60 or higher suggests that person may be using spoofing (mimicking another’s phone number) or voice distortion technology.
Many fraud attempts are simple, Mr. Anthony said. They find out your telephone number, spoof it, and call a bank to attempt a wire transfer. They then give common answers to security questions. If they are wrong they simply hang up and try again with the next operator.
“They essentially have unlimited attempts,” Mr. Anthony explained.
In one example a fraudster was asked his mother’s maiden name. He responded that his father was married three times and asked for three attempts, succeeding on the third try and taking $10,000 for his efforts.
Companies, of course, have every right to vigorously combat fraud, but if it is not properly done, it can alienate legitimate customers. That occurs when cumbersome verification processes add to call times and reduce efficiency for both parties. In an era where the customer inherently recognizes inefficiency, especially when better processes are available, alienation can quickly happen.
Pindrop estimates banks lose $10 billion each year to phone fraud, though Mr. Anthony said the actual total is hard to determine because some fraud is mislabeled or paid out through contingency funds.
“They’re losing 57 cents for every call they take,” Mr. Anthony said.
Some fraud operations are more complex, Mr. Anthony explained. They may begin with a seemingly innocuous request like changing an e-mail address or telephone number, but if they are successful they have rerouted all communication away from the actual customer.
Phone fraud is a profitable operation, Mr. Anthony added. Hotspots have developed around the globe, including in West Africa, Mexico, Colombia and Eastern Europe.
It is also important to accurately identify the good guys, Mr. Anthony said, because that allows the company to provide a more seamless experience.
“That is very attractive to the banks because they are doing that on every single call,” Mr. Anthony explained. “If we can reduce authentication costs and improve the customer experience, that is very compelling.”
Constant iteration is a must in the fraud prevention industry, Mr. Anthony said, because as soon as you stop one method, fraudsters try something else.
Given the popularity of biometrics at Money20/20 2015, I asked Mr. Anthony what role he sees biometrics, especially voice, playing in his industry.
In short, when they are employed in combination with other methods they can be quite effective.
“They add a level of confidence,” Mr. Anthony said.
“It’s a constant arms race,” he continued. “New technologies are being developed where I can speak into a microphone and it repeats it back in your voice. It is indistinguishable from yours.”