Bayesian inference – the future of online fraud protection

Abstract

Fraud is an ever-growing problem for e-commerce businesses, not only because the level of online fraud being committed is rising, but because it is becoming increasingly more complex and sophisticated. As such, if the e-commerce industry is to combat fraud effectively, methods of online fraud detection and prevention also need to grow in sophistication and in erudition. As fraudsters become ever more sophisticated in their methods, so too must the companies that hope to detect and prevent such activities. A major problem for e-commerce businesses today is that fraudulent transactions appear more and more like legitimate ones. The damage to business is not just financial. Other effects can include damaged reputation, loss of trust, lower sales and so on. David Excell, CEO of Featurespace, looks at new technologies based on Bayesian inference that can better protect companies from such increased risks and discusses how they can adapt to new fraud trends.