Businesses lose millions of dollars per year because of fraud. Fraudsters will attack repeatedly as long as they can make money. Stopping these attacks at the digital front door is important for preventing the leak downstream. Arkose Labs recorded twice as many attacks on its network in 2020 than in 2019. Fraud Detection & Prevention Market Report 2025 shows that the global fraud detection & prevention market size is estimated to reach USD 56.56 billion by 2025. Therefore, choosing an effective fraud prevention solution has vital importance.
If fraudsters know that defenses are easy to breach, they will return time and again. Fraud attacks have a vicious cycle. In addition to initial losses, there are many downstream costs as well. For instance, the average business spends between 1-5 hours remediating each ATO attack, according to Arkose Lab’s polling. As a free or cheaper solution cannot determine what is good or bad traffic, this affects fraud and security teams who will have to monitor traffic more closely, customer support personnel dealing with compromised accounts, and customer acquisition teams. This causes operational costs. Here are some tips for businesses to choose an effective fraud prevention solution.
Protect the digital front-end
The success or failure of an attack lies heavily on whether fraudsters can get into their targeted platform. In addition, fraudsters are continuously investing more in their infrastructure and resources to break through businesses’ safeguards. So, businesses should protect the digital front-end with smarter investments to detect fraud before it causes downstream damage.
Avoid using free ineffective solutions
There are many free or nearly free fraud solutions that do not provide long-term mitigation against attacks. You should consider long-term attacks and spent on an anti-fraud platform. The true cost of ineffective solutions is more than you think. Resetting passwords for compromised accounts, for example, can cost upwards of $70 per account. In terms of customer disruption, subpar fraud detection solutions have difficulty accurately detecting between good and suspicious traffic. This means too many customers will be blocked or see undue friction, while many bad actors slip through, disrupting online platforms.
Taking a long-term approach
Arkose Labs recommends businesses have a long-term approach to effectively manage fraud and abuse in this rapidly evolving ecosystem. The company takes a different approach rather than traditional “fraud mitigation”. The ideal fraud defense consists of detect, stop and continually evolve. The first step includes real-time risk assessment, triage traffic based on intent. The challenge and interact step covers eliminate bots. For the final step, fraud prevention should analyze and learn with embedded machine learning.