Dark Reading is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Attacks/Breaches

Startup Promises More Accurate Fraud Detection

Guardian Analytics's new 'fraud modeling' technology recognizes activity that goes outside user norm

One of your users isn't interacting with the system the way he or she usually does. It could be that the user is trying to do something new.

Or it could be that the person working in your user's account isn't your user.

The ability to detect fraud is increasingly becoming a holy grail for enterprises, which not only want to protect their users from fraud and theft but also to be able to tell prospective customers that their systems are more secure than their rivals'. There's just one problem: Accurately detecting fraud in user accounts is really, really hard.

"We recently did a test at an [enterprise] customer site where the customer gave us three months of log data and asked us to find the fraud," says Tom Miltonberger, founder and CEO of Guardian Analytics, a startup that specializes in online fraud detection. "The company we were competing with came up with 500 alerts -- and the user didn't end up finding any real fraud among them."

Such results are typical in today's behavioral analysis and anomaly detection systems, which are designed to help identify potential fraud but often generate far more false positives than useful data, Miltonberger observes.

Enter Guardian Analytics, a startup that offers a technology called "fraud modeling," a combination of user behavioral analysis and artificial intelligence-type reasoning. Guardian Analytics essentially allows companies to create sophisticated patterns of "normal" online interaction with a particular system or account, making it easier to identify anomalous -- and potentially fraudulent -- behavior.

"The thing about today's fraud is that there are so many different ways to hide it," Miltonberger says. "There are proxies, obfuscation, and so many other tools that fraudsters use. And when they penetrate an account, the things that fraudsters do don't look radically different than what a typical user would do -- they're just transferring funds, collecting account data, and so forth.

"As a result, most systems today have trouble detecting fraud just by analyzing usage patterns. Either they miss [the fraud] entirely, because the differences are so subtle, or they turn in so many false alarms that you can't really make any sense of them."

Guardian Analytics, on the other hand, does dynamic account modeling, creating models of each user's behavior in a particular account. Using this model, Guardian Analytics can not only tell what the user has done in the past, but it can also predict what he or she will do in the future -- and recognize activity that falls outside these established norms.

The Guardian Analytics approach is much more accurate than current its counterparts, Miltonberger says. "In the test we did at the customer site, where our competitor came up with 500 alerts, we only came up with five," he states. "Three of the five ended up being fraud cases that the user knew about when they gave us the data."

Fraud modeling will become increasingly useful as attackers adopt hybrid approaches to account theft, Miltonberger says. "We see a lot of that now, where the fraudster uses online methods to scope out the user's account information, but then uses offline approaches, such as wire transfer, to actually do the theft," he says. "When they limit their online activity, you have fewer chances to detect them, so accurate analysis becomes even more important."

For now, Guardian Analytics is focusing most of its attention on applying the fraud modeling technology to banks and other financial institutions, where account fraud is most critical and potentially harmful. Over time, however, this model could be applied to many other environments, such as e-commerce, SAS, sales force automation, and even social networking services.

"One of the beauties of this technology is that it will automatically adapt to recognize the user's behavior, whatever that behavior is," Miltonberger says. "It will recognize the patterns and alert you if there's activity outside those patterns."

The Guardian Analytics technology, which is sold as software that sits alongside the server, is sold on an annual subscription basis that includes frequent updates, much like an antivirus application. It isn't cheap -- prices range from about $70,000 per year for a small bank to more than $1 million for a large institution.

"When you compare that to the cost of other authentication technologies, like tokens, though, this is a pretty attractive alternative," Miltonberger says. "The cost of deploying tokens to your users would end up being much higher -- and a lot more of a hassle in time and administration."

Have a comment on this story? Please click "Discuss" below. If you'd like to contact Dark Reading's editors directly, send us a message.

Tim Wilson is Editor in Chief and co-founder of Dark Reading.com, UBM Tech's online community for information security professionals. He is responsible for managing the site, assigning and editing content, and writing breaking news stories. Wilson has been recognized as one ... View Full Bio

Comment  | 
Print  | 
More Insights
Comments
Newest First  |  Oldest First  |  Threaded View
Data Leak Week: Billions of Sensitive Files Exposed Online
Kelly Jackson Higgins, Executive Editor at Dark Reading,  12/10/2019
Intel Issues Fix for 'Plundervolt' SGX Flaw
Kelly Jackson Higgins, Executive Editor at Dark Reading,  12/11/2019
Register for Dark Reading Newsletters
White Papers
Video
Cartoon
Current Issue
The Year in Security: 2019
This Tech Digest provides a wrap up and overview of the year's top cybersecurity news stories. It was a year of new twists on old threats, with fears of another WannaCry-type worm and of a possible botnet army of Wi-Fi routers. But 2019 also underscored the risk of firmware and trusted security tools harboring dangerous holes that cybercriminals and nation-state hackers could readily abuse. Read more.
Flash Poll
Rethinking Enterprise Data Defense
Rethinking Enterprise Data Defense
Frustrated with recurring intrusions and breaches, cybersecurity professionals are questioning some of the industrys conventional wisdom. Heres a look at what theyre thinking about.
Twitter Feed
Dark Reading - Bug Report
Bug Report
Enterprise Vulnerabilities
From DHS/US-CERT's National Vulnerability Database
CVE-2019-17123
PUBLISHED: 2019-12-13
The eGain Web Email API 11+ allows spoofed messages because the fromName and message fields (to /system/ws/v11/ss/email) are mishandled, as demonstrated by fromName header injection with a %0a or %0d character. (Also, the message parameter can have initial HTML comment characters.)
CVE-2019-19774
PUBLISHED: 2019-12-13
An issue was discovered in Zoho ManageEngine EventLog Analyzer 10.0 SP1 before Build 12110. By running "select hostdetails from hostdetails" at the /event/runquery.do endpoint, it is possible to bypass the security restrictions that prevent even administrative users from viewing credential...
CVE-2019-19790
PUBLISHED: 2019-12-13
Path traversal in RadChart in Telerik UI for ASP.NET AJAX allows a remote attacker to read and delete an image with extension .BMP, .EXIF, .GIF, .ICON, .JPEG, .PNG, .TIFF, or .WMF on the server through a specially crafted request. NOTE: RadChart was discontinued in 2014 in favor of RadHtmlChart. All...
CVE-2019-19793
PUBLISHED: 2019-12-13
In Cyxtera AppGate SDP Client 4.1.x through 4.3.x before 4.3.2 on Windows, a local or remote user from the same domain can gain privileges.
CVE-2019-19722
PUBLISHED: 2019-12-13
In Dovecot before 2.3.9.2, an attacker can crash a push-notification driver with a crafted email when push notifications are used, because of a NULL Pointer Dereference. The email must use a group address as either the sender or the recipient.