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Leveraging Behavior Analytics to Reduce Customer Friction and Fraud

Some shady woman wearing a mask while assembling data

When customers experience a digital encounter with a company, there can be a variety of obstacles. This is especially the case when dealing with bots and algorithmic sequences provides by artificial intelligence and machine learning. At the same time, companies also have their own issues to deal with during these encounters. Specifically, many must invest significant effort into detecting fraud in order to ensure authenticity. Unfortunately, most companies rely on question scripts and customer answers for these purposes. But not only does this fail to adequately detect fraud in many instances. But it also results in a fragmented consumer experience that fails to cultivate a quality customer relationship.

Understanding these issues, one company is trying to tackle this problem using behavior analytics. Rather than relying on predetermined questions and answer content, Neuro-ID takes a deeper look into the situation. Specifically, its behavior analytics platform attempts to define the intentions of the customer and sources of friction. In the process, Neuro-ID not only creates a more seamless experience throughout the digital journey for the customer. But it also significantly improves fraud detection and prevents cyber-attacks. And all of this helps the bottom line for the company in both the short-term and long-term. (Read more about the growing threat of cyber-attacks in this Bold story.)

“By flagging anomalous behavior in real time – as opposed to relying on historical data that is easier to steal or fake – Neuro-ID users can sort customers, reject bots, increase friction to resist suspicious activity, and smooth the way for genuine customers.” – Jack Alton, CEO of Neuro-ID

The Advantages of Behavior Analytics

Behavior analytics does more than simply evaluate a person’s responses and answers. Instead, behavior analytics strives to determine the reasons and rational behind them. These underlying processes are what drives human behavior, and therefore, they offer much greater value. If a specific customer’s behaviors can be better understood, then every process of a digital encounter can be enhanced. At the same time, incongruence with typical behaviors can trigger red flags that might allow real-time fraud detection. In essence, this analytics approach represents a deeper layer of assessment. And for companies who are predominantly involved in digital interactions, this information is quite attractive.

In terms of Neuro-ID, the company has been described as providing Behavior-as a Service. Its analytics platform is able to monitor actual human behavior in real time and assess problems. In the case of routine customer interactions, the platform can identify why a customer might fail to complete a digital journey online. It may also find ways that can overcome these barriers and result in a higher-value experience. Similarly, aberrant behaviors that are atypical in nature can trigger alerts. This is the means by which it provides real-time fraud detection to its clients. These features alone have resulted in tremendous growth for the company. For clients now using Neuro-ID, conversion rates have increased by 200% on average while fraud rates dropped by 35%. It’s therefore not surprising the company is gaining a great deal of attention and support.

“This new view of customer behavior at scale opens up the ability to improve conversion to drive more revenue by fast-tracking good customers, become more sophisticated at measuring intent, and improve the design quality of their digital products, all while reducing fraud.” –  Walker Forehand, Partner at Canapi Ventures

Scaling Up to Meet Demand

Neuro-ID was founded in 2014, and since that time, the company has raised nearly $50 million in funding. This includes its most recent round of Series B funding of $35 million this year. While such investments might seem out of proportion to a startup behavior analytics platform, results suggest otherwise. In 2021 alone, Neuro-ID has seen a 500% increase in monitored customer journeys online for its clients. It is also on pace to see more than triple the number of clients and revenues this year in comparison to last. In fact, the company has had to triple its number of employees this year, which now totals 60.

Some dude using data while shopping
Leveraging behavior analytics can help fight fraud, as well as making customer interface a snap.

In terms of Neuro-ID’s clientele, it boasts some pretty major players. Among some of the more recognizable ones include Intuit, Square, Affirm, and OppFi. As may be evident, banking and finance companies are among some of Neuro-ID’s best clients. Customers in these industries have an extremely poor history in terms of digital experiences. In fact, fewer than 10% finish a digital journey online once initiated in this sector. Plus, banks and fintech companies must deal with major bank fraud risks, making Neuro-ID’s real-time fraud detection attractive. By using Neuro-ID’s behavior analytics and real-time fraud detection, these firms have much to gain.

“Our mutual clients will now be able to use real-time behavior insights to create a safe and seamless digital experience, increasing new account openings without sacrificing the customer experience or the organization’s exposure to risk.” – Tommy Nicholas, CEO of Alloy

Future Plans for Neuro-ID

With the additional infusion of fund, Neuro-ID plans to hire new engineering talent to assist with its scaled expansions. At the same time, the company is planning to accelerate growth in both revenues and in clientele for its behavior analytics platform. Because Neuro-ID is unique in its ability to analyze new as well as return customers, successful growth is expected. This is not only in the banking and finance sectors but in any industry with predominantly online digital customer interactions. Likewise, with the rise in ransomware and similar threats, the company’s real-time fraud detection is getting a lot of attention. By all accounts, it looks like the next few years will be notable ones for Neuro-ID and the behavior analytics market.


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