Case Study: How a Growing Fintech Eliminated Bot Fraud & Made Onboarding Faster and Easier

Bots and bot-based fraud continue to make headlines, affecting some of the world’s top companies including Twitter, PayPal, and LinkedIn. While bot fraud comes in many different flavors, most involve some type of bot script that impersonates real users and signs up for new accounts, forcing online businesses to put up cumbersome identity verification defenses that ultimately make it more difficult for legitimate customers to sign up. 

Spark Wallet, a rapidly growing fintech that offers 5% back on every purchase made through its cash and lightning wallet, was facing this very problem. At first, the company was delighted to see a huge influx of new users signing up for their app until they realized that some of these new customers may not actually be real humans. Read on to learn how Spark Wallet solved its bot fraud issue using advanced identity verification and authentication technology while also making its onboarding experience easier and faster for users. 

Problem #1: Bot Fraud Was Eating into Spark Wallet’s Revenue

“Any time you give rewards or incentives, you attract fraud and bad actors,” said Martin Spusta, CEO of Spark Wallet, in a recent conversation with Prove’s Fraud & Cybercrime Executive Advisor Mary Ann Miller. “We were faced with a challenge where fraudsters were spinning up fake accounts and trying to exploit our rewards program. Because of this, we were paying out hundreds of dollars in incentives to fake users.”

Problem #2: Other Identity Verification Methods Slowed Down the Customer Experience

“Before Prove, we looked into various solutions including liveness checks, face ID, and document-scanning solutions, but everything we implemented was too much friction for users,” continued Spusta. “We received complaints from users that our identity verification was too hard to use and even with all of these checks, the bots were still getting through. Abandonment was high and fraud was still getting in.”

The Results: Prove Pre-Fill, Prove Auth, and Trust Score Keep Bots Out and Get More Good Users In

‍“The effectiveness of the tool is by far superior to any other product we’ve used. Using Prove’s solutions, it’s 100 times easier than anything we’ve ever used before and in the end, all the bot accounts were gone,” said Spusta. “We can still see the bots attempting to create accounts but we also see them being blocked. Today, we’re bot-free.”

“We also have an SDK where we can do a passive authentication in the background so our mobile users love it. A user downloads the app and through Mobile Auth which is enabled by Prove Auth, we can silently authenticate them making it easier to sign up. Then Pre-Fill is the secret sauce that ties the entire flow together. It allows our customers to onboard faster and more easily without having to fill out a full form, which makes for an even more seamless user experience.”

How Trust Score Mitigates Bot Fraud

Spark Wallet leverages Prove’s Trust Score to detect and block bot traffic. Trust Score is a real-time measure of identity reputation that analyzes authoritative signals such as phone number and device tenure, SIM swaps, velocity, and behavioral anomalies. Companies are able to detect and block bots using Trust Score because bots typically have low Trust Scores due to short tenure, high change event velocity, or because they’re on a risky line type such as non-fixed VOIP. 

For more information about Trust Score, visit our blog about how E-TRADE leverages it for high-risk transactions.

“Prove Pays for Itself”

Spusta pointed out that one of the main benefits of being able to mitigate bot fraud is that the funds that are no longer lost to fraud can be routed towards growing the business and providing more rewards and incentives for Spark Wallet customers.

“Prove pays for itself. If you don’t have a loss of revenue from paying out fake accounts or bots, you can take that revenue and provide more rewards for your customers,” said Spusta.

Identity Verification That Doesn’t Hinder Company Growth

“If you’re out there and trying to build a business, you cannot afford to do it without identity verification services,” said Spusta. “When evaluating an identity verification provider, choose the one that doesn’t hinder the customer experience and company growth. If you want it frictionless, fast, accurate, and trustworthy, Prove is the only one on the market that meets those standards.”

For more information about how Spark Wallet leverages Prove’s solutions to mitigate bots and streamline their customer experience, watch the full webinar here or request a consultation.

‍

Transcription has been edited for clarity and brevity.