Fraud detection software, or online fraud detection software, is used to detect illegitimate and high-risk online activities. These tools continuously monitor user behavior and calculate risk figures to identify potentially fraudulent purchases, transactions, or access. Fraud detection tools are used by the IT and compliance departments of businesses and digital banking companies to monitor potential fraudulent actions made by their users. Companies adopt these tools to prevent cyberattacks, fraudulent transactions, and identity theft while protecting sensitive information about the business and its customers.
Utilizing machine learning and real-time behavior analytics, fraud detection tools can perform real-time risk classification based on device and IP reputation and other factors. There is some overlap between fraud detection solutions and e-commerce fraud protection software. But those tools are more geared toward enforcing regulations and analyzing purchasing behavior, rather than monitoring, detecting, and alerting incidents of fraud as they happen.
To qualify for inclusion in the Fraud Detection category, a product must:
Detect illegitimate activities related to payments, purchases, account creation, and chargebacks
Monitor websites, networks, and applications for fraud
Prevent digital payment fraud
Analyze open-source and network data to find anomalies and historical fraudulent behavior
Provide alerts and analysis tools for administrators
Ensure compliance with data privacy and security regulations
Discover suspicious online activity and spot patterns of abuse
Detect and mitigate account takeover and identity theft attacks
