understand what it is and how it works

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In an increasingly digitalized world, the anti-fraud system gains more and more relevance , especially considering that “9.8 million fraud attempts were carried out in Brazil in 2023, which meant a loss of R$2.5 billion in losses due to fraud”.

Latin America is not the exception to this trend, as the region loses around 20% of its income due to fraud , and 3.7% of online orders result in fraud, according to Mastercard data.

With these figures in mind, it is clear that companies must have robust solutions to protect themselves. In this context, anti-fraud systems are now indispensable, guaranteeing secure transactions and minimizing losses.

In this article, we will explore what an anti-fraud system is, how it works and why it is crucial for any online business.

What is an anti-fraud system?
An anti-fraud system is a technological solution designed to detect and prevent fraudulent activities, especially in electronic transactions and digital commerce platforms.

What is an anti-fraud system?

These systems use a combination of advanced phone leads algorithms, artificial intelligence and real-time data analysis to identify suspicious patrons who could indicate fraud .

By continuously monitoring and analyzing large volumes of data, an anti-fraud system can identify intentions of manipulation, misuse of credit cards , identity theft or any other fraudulent activity before the operation is completed.

Types of fraud
The fraud system, thanks to its versatility, is capable of protecting companies from various types of fraud such as:

Fraud with stolen credit cards : detecting unusual patrons, such as purchases in different locations or lots of usual ones.

Identity fraud : identifying inconsistencies in user information, such as differences between the IP address and card data, or multiple accounts created from the same address.

Friendly fraud or "friendly fraud" : occurs when the legitimate buyer refuses to purchase, and this system helps to recognize this type of behavior, warning about possible attempts of abuse.

Fraud by triangulation : where the embezzler creates a fake store, receives payment from the customer and then purchases the product in a real store using a stolen card, sending it to the customer.

Reimbursement fraud : fraudsters manipulate the reimbursement system to obtain money illegally. Here the anti-fraud system detects repetitive patrons in anomalous refund requests or returns.

In general, these systems allow you to identify irregular behavior and block suspicious transactions before fraud is completed.

How does an anti-fraud system work?
Anti-fraud systems use several security layers to analyze and verify data in real time, ensuring that both companies and consumers are protected against illicit activities.

Anti-fraud system

Information verification
One of the first steps in the operation of an anti-fraud system is the verification of basic user data.

This process includes reviewing information such as electronic mail, cell phone and address , crossing data with reliable databases and verifying its authenticity, looking for inconsistencies or risk signals.

Documentoscopy
Documentoscopy is a technique that analyzes the authenticity of the identity documents presented.

The system reviews document characteristics such as holograms, security seals, codes and other elements to determine whether they are genuine. This is especially useful in electronic commerce and on platforms that require identity verification to protect against attempts to supplant.

Facial recognition
This technology compares the user's image, captured in real time or uploaded as part of a KYC registration process , with the photograph of their identity document.

In this way, it is verified that the user is who he or she is, avoiding fraud related to identity supplantation.

Data validation
The software also performs data validation by crossing the information provided by the user with reliable sources.

For example, compare identification numbers, birth dates and other personal details with government or private databases to ensure that there are no errors or inconsistencies in the information provided.

Geolocation
The anti-fraud system detects if the user's geographic location coincides with their usual address or if there are inconsistencies, such as purchases from unusual locations or which do not coincide with previous records.

If a discrepancy is detected, an alert is sent or the transaction is blocked for greater security.

Behavior monitoring
Finally, anti-fraud systems implement behavior monitoring to detect anomalous patrons in user transactions and activities. This monitoring analyzes purchase history, device usage, frequency and number of transactions , among other factors, to identify suspicious behavior.

Why is an anti-fraud system important for your institution?
Fraud is a growing threat both globally and in Latin America , with a devastating impact on institutions, including financial, reputational and security.

As we mentioned, in 2022, global losses due to fraud in e-commerce will reach $41 thousand million, with a projection of more than $48 thousand million for 2023, according to Mastercard .

This alarming trend shows that institutions are facing an increasingly vulnerable environment, where fraudsters find new ways to exploit weaknesses in security systems.

Context of fraud in Latin America and Brazil
Latin America, in particular, has experienced a considerable increase in fraud. For example, Forrester Consulting , stated that companies in the region bear a fraud cost that is 3.9 times greater than the nominal value lost in fraudulent transactions.

For its part, Serasa Experian revealed that in Brazil in 2023 there will be 10 million identity theft attempts.

Furthermore, 59% of companies reported an increase in fraud during the 12 months prior to the survey . This means that more than half of the country's companies are facing this problem on an increasing basis, which undercuts the urgency of implementing effective measures.

In other words, for every real lost due to fraud, Brazilian companies must spend on average R$3.59 in associated costs. This value includes direct financial losses on the ground, as well as internal labor costs, legal fees, recovery costs, and redistribution costs for lost or stolen merchandise.

In specific sectors, such as the minority, these costs average R$3.01, while in financial institutions it costs R$4.49.

Impact on institutions
The impact of not having a robust anti-fraud system is greater than that of direct economic losses. Institutions also face reputational damage , which can erode the trust of customers, investors and partners.

A poorly handled fraud incident can lead to a loss of customers and hinder business growth. Furthermore, the legal and regulatory costs associated with fraud are high, which increases the financial pressure on companies.

Now, we have a little bit of regulation in this regard.

Bacen Resolution No. 6/2023
Bacen Resolution N° 6/2023 , issued by the Central Bank of Brazil, establishes new guidelines so that financial institutions face the growing challenge of fraud .

This regulation reinforces the need to share information in an agile and effective way between organizations in relation to fraud attempts or irregularities detected in the system.

One of the main resolution provisions is that, following the identification of an attempted fraud, financial institutions are obliged to share signs of irregularities through digital media within a maximum period of 24 hours.

This approach to rapid and collaborative information exchange has the objective of improving the response to fraud and reducing the opportunities for criminals to exploit the financial system.

What are the benefits of having an anti-fraud system?
Saying all of the above, let's see in concrete terms how an anti-fraud system is vital for your organization:

Reduction of financial losses
By detecting fraudulent activities proactively, this type of systems reduces costs related to unauthorized transactions, identity theft and fraud, avoiding negative impacts on income.

Security
Increases the security of both the company and its users, protecting sensitive information and preventing unauthorized access. This generates an environment of greater customer trust and loyalty.

Compliance with regulations
In addition to protecting finances, an anti-fraud system ensures that institutions comply with local and international regulations , such as Bacen Resolution N° 6/2023, which requires sharing information on fraud attempts in less than 24 hours.

This avoids sanctions and strengthens the company's reputation.

What do you have to consider when implementing an anti-fraud system?
When implementing an anti-fraud system, it is essential to take into account several key factors that will guarantee its effectiveness and adaptability:

Flexibility
Given that frauds are constantly evolving, the system must be flexible to adjust to new attack methods and the specific needs of each company.

The stages and internal processes to prevent fraud vary between companies, which is why a flexible tool is crucial to staying up to date.

Process automation
An anti-fraud system must automate tasks such as approval or rejection of transactions , according to predefined rules based on risk levels.

This means reducing manual workload and human errors, while also accelerating response times and optimizing safety.

Integration
It is important that the system can be integrated with other technologies and external information sources, such as credit bureaus , restrictive lists and public consultations , to enrich the analysis and validation of specific transactions.

Ensuring a broader and more accurate view of fraud detection.

Team training
The success of the system also depends on the continuous training of the teams, allowing them to understand how to use the solution, identify new patrons of fraud and apply improvements in the processes.

Data management and analysis.
A good anti-fraud system collects and analyzes data to detect patterns of anomalous behavior and prevent possible future risks.

Predictive analysis allows you to act before fraud occurs, improving the company's overall protection.

Discover SYDLE ONE
SYDLE ONE is an integral platform that incorporates all the key features to protect your company from fraud.

With a robust and adaptable approach, SYDLE ONE allows you to manage security efficiently thanks to its advanced functions:

Flexibility : its architecture allows adjustments in real time to adapt to changes in types of fraud and the specific needs of each business.

Process automation : implements automatic rules that reduce human errors, speed up decisions and increase precision in fraud detection.

Total integration : SYDLE ONE easily connects with credit bureaus, restrictive lists and external sources, guaranteeing a more complete and accurate verification.

Continuous training : offers tools for the constant learning of your team, ensuring that you are always up to date with the latest trends and best anti-fraud practices.

Advanced data management : with predictive and preventive analysis capabilities, SYDLE ONE transforms data into useful information to anticipate possible threats.

With SYDLE ONE, you will be one step ahead in fraud protection, improving the security, efficiency and regulatory compliance of your company.