Dynamic Friction - Bringing Pre-KYC into the mix

Updated on 27.05.22
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Video Guide
Understanding Dynamic Friction – SEON Fraud Prevention Guide

A short video of how pre-KYC checks can reduce friction as you fight fraud with SEON.

Bringing Pre-KYC into the mix


Data enrichment is quickly becoming the battleground where the fight against fraud is won or lost. Put simply: the more data you have about a user, the more intelligent your decision can be. 

At present, our solution already helps businesses learn more about website visitors based on a single IP, email address, phone number or any device. 

This digital footprint analysis is delivered in real-time, and enriched without delays. It’s invisible security to the website visitors, who can onboard, login and interact with the site with the best possible user experience. Friction and churn are reduced to a minimum. 

Our ultimate goal is to help clients deploy what we call dynamic friction. The idea is to learn the most about users before official KYC checks (such as ID verification). The pre-KYC checks offered by SEON can help you separate good users from the suspicious ones. Good users can be left to use your site or app without any hassle. Suspicious users on the other hand are presented with hard KYC checks.
 

 

Light vs. Heavy KYC

If a fraud score is too high, fraud managers can trigger heavier KYC checks (such as ID or selfie verification, 2FA). Friction is reflected in the fraud score thresholds you set. As everyone’s risk appetite is different, you can choose when heavy KYC checks are needed.

Generally speaking, KYC procedures always cause friction for the customer. The only difference is how much: providing a valid government-issued ID via photograph causes more friction than just asking them to provide their personal information. It requires more resources to validate the photograph, and it’s also not bulletproof, as fraudsters can easily obtain photoshopped or stolen documents (e.g. from the dark web).

Now when it comes to extracting social media information for data enrichment, SEON is currently the only fraud vendor that can check 50+ of the most popular social media and messenger platforms

Our thesis is simple: the world is becoming more social, not less. This is an increasingly useful signal to identify legitimate users.

This makes dynamic friction a good compromise as it efficiently halts the majority of fraud without unnecessarily frustrating your customers (or triggering the more expensive KYC checks like ID verification), while in fact frustrating would be fraudsters by making it difficult to scale fraud attempts versus a system that is protected by SEON.


If the SEON Fraud score exceeds defined values, you should make respective actions and define customer journey in different ways.

  • If you are processing payments, you can enforce 3Ds or Strong Customer Authentication or block the transactions, or block and ask for further verification, like phone number or ID documents.
  • If the customer is registering, you can also ask for documents to verify, or ask to call customer support.
  • If the API calls are for logins, you can trigger email or phone based verification to enable access to the customer accounts. It can be in the form of a link or one time passcode (OTP).
     

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