The eCommerce explosion has raised the stakes in the battle against fraudsters, making scams more difficult than ever to fight. And Kount executive Gary Sevounts told PYMNTS in a recent interview that the frontline in that fight right now involves bots, those automated software apps that rapidly perform basic but often critical tasks.
“The reality of bots is that they’re pretty much in all areas of the customer experience and customer journey,” Sevounts said. “Before, they were limited to one or two areas. Today, they’re pretty much everywhere.”
He said while many retailers utilize bots for legitimate and useful purposes, this activity unfortunately often provides “bad” bots the cover they need to do their nefarious work, often at increasingly cheap prices for bad actors.
Good Bot, Bad Bot, Not A Bot At All
Sevounts said eCommerce businesses use “good” bots the most for account log-ins, followed by checkout/payment, account creation and coupon redemption.
But according to Kount’s 2020 Bot Landscape and Impact Report, most “bad” bots are found hiding in pretty much the same areas: account creation, login checkout/payments, coupon/loyalty-point redemptions and one more — product selection.
“The nuance here is that each of those [points in the customer journey] requires a different type of protection,” Sevounts said. But he said it’s as important for retailers not to create friction by blocking good bots to stop their evil counterparts.
Sevounts said modern bot-protection solutions have to be flexible, understand the full context of eCommerce and distinguish between customers, good bots and bad bots in near real time.
Holiday Bot Battles
The holiday shopping season’s financial importance to retailers is the perfect backdrop to discuss the critical need for bot protection, Sevounts said.
After all, he said that 45 percent of businesses report that bad-bot attacks involve fraudulent freezes of inventory — particularly highly coveted items.
“The challenge here is that a lot of that inventory is in a big demand,” he said. “So from a fraudster or bad actor’s perspective, it’s a great opportunity to snatch it and then resell it at higher prices, [especially] when there is shortage.”
A prime example was toilet paper and hand sanitizer in COVID-19’s early days, he said. Given this huge financial motivation, it’s critical for retailers to control this behavior around inventory in a way that blocks bad actors, Sevounts said. But he said merchants also must enable legitimate customers to have frictionless experiences.
And it’s not only a single sale that’s at risk, Sevounts said. He said merchants could lose not just one sale but all future ones to a customer or prospect if the person “comes to the website and they try to buy something — or while things are in the cart — and all of a sudden, it’s not available. So, it’s critical to have a bot-protection system that is smart [and] is intelligent enough to be able to recognize the different types of bots.”
Event-Based Bot Protection
Just like retailers’ in-store cat-and-mouse battle against shoplifters, bots and the technology that blocks them are continually evolving — as are the areas being targeted.
Sevounts said the state of the art in the bot battle today involves “event-based” protection.
Because it can be so hard to differentiate between a human and a bot, event-based tools use artificial intelligence to understand an event’s context and determine what’s normal behavior and what’s not. Such systems accomplish that in a number of ways, including looking at geolocation, decades of purchase information, behavioral biometrics, digital identity and an IP address’ history.
“For 10 years, if this IP address has been coming in with eCommerce transactions from Montana and all of a sudden it’s coming from Zimbabwe, there is a problem there,” Sevounts said.
He said Kount’s event-based solution could identify risk levels and take an accurate course of action to block a bad bot in just 300 milliseconds. And if it’s a good bot that the system finds, it makes sure legitimate customers have a frictionless experience.
Will 2021 Be The Year Of Bot?
Given the increased digitization brought about by COVID-19 and the surge in online shopping, it’s probably no surprise that Sevounts is concerned about bots — but optimistic about solutions.
He said 2021 “is going to see very much accelerated bot behavior — both bad bots and good bots.” Sevounts said the bad guys have gotten more sophisticated and can operate more inexpensively even as the good guys strive to process orders at the speed of light and keep customers returning.
“It’s going to be all about adapting and protecting [good] bots in real time, and this is really where event-based bot protection is going to shine,” he said. “2021 is going to be the year of emergence and dominance of event-based bot protection.”
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