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Why Location Matters for Mobile Fraud Prevention

Location is the strongest trust signal for mobile

In the US, Identity fraud losses grew from 16.9B in 2019 to 56B in 20201. With 50% of transactions now happening on mobile devices2, and mobile accounts for 75% of the fraud3, mobile fraud prevention has become a priority.

The main issue with mobile fraud prevention today is that in most cases it treats the mobile device as a static device, like a PC. This is not surprising given that the earlier generation of digital identity solutions were built for the desktop browser and adapted to mobile, leading to non-optimized security and user experience for mobile users. But the great advantage of a mobile device from a fraud prevention standpoint is that it is carried with the user at all times and is loaded with sensors that can provide important signals unique to the user.

For mobile fraud prevention, location is the strongest behavioral signal. Location is now being used to protect consumers from fraud and to improve their experience by removing friction. The reason location is the strongest signal for mobile fraud prevention is because location generates a dynamic fingerprint for each user that rapidly indicates the user's context and habits.

In analyzing location data from devices on the Incognia network:

  • 85% of mobile bank account openings happen from the user's home address
  • 93% of e-commerce transactions contain an address (bill to or ship to) that the user frequently visits
  • 90% of the logins and 95% of the sensitive transactions at financial services Apps happen from a trusted location (home, work, or other highly frequented location)
  • 88% of e-commerce transactions happen from a trusted location

Using these location behavior insights enables companies to recognize trusted users and detect anomalies in location behavior indicating high risk transactions.

Working with fintech and mcommerce companies the Incognia location identity solution has been used to remove friction and reduce fraud in mobile apps at onboarding, login and payments. We have observed the following results from companies that started using location as part of their mobile fraud prevention strategy. 

  • increase in new account origination by 25-40% (reduce CAC)
  • increase in transaction acceptance rate by 10-25% (increase LTV)
  • reduction in account takeover fraud by 85-90%
  • reduction in chargeback rate by 50-70%

Additionally, end-users have benefited directly from location being used to protect their accounts, through lower friction and an enhanced user experience including:

  • lower friction - 0.013% false-positive rate 
  • security - 0.004% false-negative rate
  • privacy - no storage of associated personally identifiable information 

Financial services and mobile commerce Apps are now leveraging location to reduce fraud and friction, leveraging the strongest trust signal on mobile.

Please contact us to learn more about how to effectively use location to recognize trusted users on mobile.

 

1: Javelin

2: Statista

3: Frankonfraud

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