How to Use Allow & Deny Lists for Fraud Detection

A new feature to make customer experiences safer and smoother
Chethana

Chethana

June 15, 2022

As the world enters the era of the next technological revolution, a rapid change in technologies, industries, and processes due to increasing interconnectivity and smart automation is occurring. As fintech offers a variety of financial products to gain new customers and financial institutions access to the next billion customers, it brings immense business opportunities along with exposure to fast-evolving networks of hackers and fraudsters. Traditional and siloed fraud detection systems cannot cope with the complexities and challenges brought up in this new landscape.

Financial institutions need better ways to combat fraud and to be compliant, in a cost-effective manner while increasing productivity, reinforcing security, and protecting account holders and their assets. A fraud management system should be fast-evolving, and use advanced tools to effectively fight fraud. It needs innovative ways to gather relevant information which can be used in smart fraud detection.

An effective way of handling both Allow and Deny list of connections is critical for a quick and successful fraud management system. If the lists are not updated automatically and in a timely manner, the costs incurred in not catching fraud will damage the organization’s reputation and account holder’s confidence.

Need for dynamic and flexible Allow/Deny list of connections

As technology evolves day by day, different kinds of fraud are also increasing rapidly.
Reviewers and data strategists need to save and reuse certain entity data so that it can be checked against future requests in real-time. It not only creates a frictionless customer experience but also serves as additional functionality that allows fraud fighters to be nimble in tackling fraud attacks.
Another need exists to check if a certain entity is on a specific allow/deny list to drive a decision. Some examples:

  • If an email is on an allow_list, approve the transaction
  • If the IP is on a deny_list, decline the application
  • If an email is on a deny_list and IP is on a deny_list, decline the application
  • If the device is on a deny_list and the email is on an allow_list, manually review the application

Allow/Deny Lists – Crucial for building an Effectiv strategy

Effectiv’s system provides a powerful platform where users can create and update a list of Allowed/Denied entities and then use the lists to build strategies to mitigate the risk of adding unnecessary friction to trustworthy users without writing a single line of code or relying on engineering teams to maintain it. This feature for financial institutions will enhance and speed up the fraud detection process.

Users can add or create a new Allow/Deny list based on the entity they want to check, such as IP addresses, mobile numbers, and email domains.

Users can also specify the expiration date for each entry in the list so that these can be revised from time to time. This way, users don’t need to remember and inadvertently approve or deny something beyond a certain time limit.

Right now users can create lists or Effectiv can help in building them.

Once defined and approved, Allow and Deny lists can be used as part of the compliance and fraud programs at any point utilizing Effectiv‘s no code strategy builder. Utilizing this no-code strategy builder, users can define multiple workflows in which these lists can be embedded to make enhanced and faster decision making.

Learn more at effectiv.ai.

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