Data is the New Oil – Data Needs to Go Greener
Wildfires. Floods. Droughts. Hurricanes. July 2021 was the hottest month on record, since records began. We’re starting to experience the frightening impact of climate change, at a pace at which climate-related disasters are becoming part of the background noise of news and current affairs. We’re at a very similar point when it comes to data. Data, they say, is the new oil. In that context, the data leaks and privacy violations that crowd our headlines on such a regular basis feel familiar, the warning signals which, like wildfires, alert us to the severity of the problem and impel us to find a solution.
Dark Data Makes Stopping Fraud Harder
Equifax. Experian. White Pages. Social Data. Data proliferation, through third party data brokers like these, has run rampant in the last decade, making the hacks that all of those brokers and more have experienced feel almost inevitable. Of course, the more personal consumer information is hoovered up by data brokers, and exposed into the online ecosystem, the more likely that that data will be used to commit fraud – and the less helpful it is for preventing fraud.
Online businesses have to validate their customers, to ensure that they’re trustworthy before allowing them to make payments, buy items, or become a part of their ecosystem. Until recently, the only way to validate a new user, or new data from an existing user, was to send their personal information to a data broker, who would hopefully have information corroborating the new data.
Unfortunately, the broker’s info isn’t always up to date or reliable, a problem exacerbated by the prevalence of cheap stolen information, making fraud prevention decisions challenging. And sending personal user data to brokers isn’t ideal best practice, either – when you think about it, that data proliferation looks very much like an oil spill, wasting resource and poisoning the online environment.
The Growth of Green Tech Gives Hope
The situation doesn’t sound great. But while the challenges of climate change are undoubtedly real and pressing, at the same time, there’s never been a more relevant, or more importantly?, time for green tech, or sustainable technology. Exciting developments in green tech,combined with large-scale collaborative efforts to reduce emissions and change behavior, offer hope and direction for the future.
It’s the same in data and fraud prevention. In the last few years, the growth of solutions built around Privacy Enhancing Technologies has suggested a new path for both data privacy and collaboration, in a way which is particularly relevant and valuable for the fraud prevention industry.
Privacy Enhancing Technologies(PET) have been around for decades in the academic spheres of cryptography and mathematics, but only recently found practical applications due to technological advancement. Essentially, the idea is to enable parties to learn from one another’s data, without anyone involved ever sharing any of the private data they hold. From the data privacy and non-proliferation side, it’s golden.
It’s been used in HR (to enable a large number of companies participating in the study to measure their gender wage gap), in financial institutions, and internally in companies looking for creative ways to break down internal data silos across geographies. There’s a reason Gartner named PEC a Top Strategic Tech Trend of 2021.
Privacy Enhancing Technologies and Fraud Prevention
In fraud prevention terms, what Privacy Enhancing Technologies mean is that companies can collaborate to pool trust in good users, without sharing any personal user data. So if a new user comes to a site, that company can reach out and ask if any other companies already know and trust the user. When they do, that’s a powerful reason for the new site to trust them too.
Of course if no one recognizes the user at all, then more investigation might be worthwhile to see if it’s a really new user – someone who has just moved to another country, or a young person shopping online for the first time – or a fraudster. If some of the key data points don’t match, that’s probably not a great sign.
What’s powerful about this approach is that it enables a new, deeper form of collaboration for fraud fighters across companies and industries. The fraud prevention industry is known for its openness to collaboration, since fraud fighters know that it’s essential to keep up with fraudsters, who share tools and techniques with each other and frequently work together.
Collaboration on the direct data level – “Can I trust this user?” – has been challenging until now, for legal, competitive and privacy reasons. But with Privacy Enhancing Technologies, that can change. Fraud teams can even validate particularly sensitive pieces of information, like credit card ownership or bank account ownership, because they’re not sharing any user data at any point. From the data side, it’s green.
Data is a powerful weapon in the fight against fraud, and fraud teams need to leverage it the best way they can to protect their businesses and their users. Using green data technology, fraud teams can get more out of their data – and stop sharing personal user info with third parties. The grass looks a lot greener on that side of the fence.
[Learn more about a Privacy Enhancing Technology that pools trust in good users, without sharing any personal user data]