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Spark Wallet successfully eliminates bot fraud while streamlining onboarding

Goal : Streamline onboarding;
fraud mitigation

Industry:  FinTech

CHALLENGE :

Fraudsters were creating fake accounts to exploit Spark Wallet’s rewards program, resulting in lost revenue with payouts made to fake users. Spark Wallet explored various identity verification vendors and solutions, but they all added friction to the customer experience.

SOLUTION :

Implementing Prove Pre-Fill®, Trust Score®, and Mobile Auth™ hosted on AWS, helped Spark Wallet detect and block bot traffic, while simultaneously streamlining the customer onboarding experience.

100%

Reduction in bot attacks

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.

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. “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.”

“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.”

Martin Spusta,
CEO of Spark Wallet


Eliminating fraud without impacting the customer experience


Spark Wallet employs an SDK for passive authentication in the background through Mobile Auth™, making it easier for sign ups while reducing abandonment. Prove Pre-Fill®  is used to tie the entire flow together by allowing customers to onboard faster and more easily without having to fill out a full form, creating that end-to-end seamless user experience that other solutions lacked.

Spark Wallet also leverages Prove’s Trust Score® to detect and block bot traffic based on their risk appetite level. 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.

Spusta pointed out that one of the main benefits of being able to mitigate bot fraud is that the funds that would have previously been lost to fraud can be used for 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.

“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.”

Martin Spusta, CEO of Spark Wallet

Webinar:
Stop the Bots! Spark Wallet's Frictionless
Onboarding Success Story

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