ThreatMetrix Partner Quarterly Q2-2017

eBookThreatMetrix Partner Quarterly | Q2 2017 © Copyright 2017, ThreatMetrix, all rights reserved.

GLOBAL PARTNER SPOTLIGHT: PSD2: WHAT’S NEW ECOSYSTEM BEHAVIORAL ANALYTICS BRAVE NEW WORLD FOR PARTNERSQ2 2017 3 456 7 8 9 CYBERCRIME PRODUCT UPDATE: POSITIVE PARTNERSHIP: BATTLEGROUND DYNAMIC DECISION PLATFORM VANTIVWelcomeWelcome to the first Partner Quarterly update. There’s a lot going on atThreatMetrix these days—new product advancements, the continued expansionof our network and growth with our partners. To make sure you and your teamshave access to timely input, we will publish a quarterly update to share what’snew at ThreatMetrix—enablement tools and resources, upcoming events andinsights from our leadership team. We are committed to your success andworking to keep you informed.Thank you for being a ThreatMetrix partner! eBook Partner Quarterly Q2 2017 2

Leveraging the Power of a Global Partner EcosystemWe are often asked why we operate in so many Our ecosystem of partners is critical in contributing A GLOBAL NETWORKdifferent verticals. Some might say that it’s just the diversity of data that drives the complexbetter to have more data. But that isn’t always true relational associations that underpin our digital • 85 million daily transactions– it is better to have more of the right data and in identities. Combining eCommerce, financial, • 4.5 billion connected devicesour case more diverse data that gives us a holistic government, healthcare, insurance and social • 1.5 billion mobile devicesview of a consumer’s online presence. network activity gives us a complete picture of a digital consumer, leveraging all the ways they 3Consumers continue to evolve. They are more demonstrate: who they are, what devices they use,mobile and global than ever before, using multiple where they travel, what credentials they leveragedevices, staying connected while traveling and and what behaviors they exhibit.engaging in cross-border transactions of all types.As consumers evolve the way they interact, It’s precisely the mix of customer types that givespurchase and manage their lives online, so too us even better data to know a consumer is whodoes the way we need to think about them and they say they are, not because they have given thetheir identity. Gone are the days of static right name and address or answered the rightdependable government or bureau sanctioned question, but because we can see their behaviorsidentity data. Now we need to think in terms of and presence across so many transactions in theirdigital identities. daily online life. Armed with this intelligence, our partners drive revenue for their customers andThreatMetrix has the largest repository of digital protect them from fraud. Together we both leverageidentities with 4.5 billion connected devices, 1.5 and contribute to the power of our sharedbillion mobile devices, and more than 5,000 ecosystem, enabling new ways of solving criticalcustomers, processing 85 million transactions a online challenges for our mutual customersday from 45 countries. Every one of these worldwide.transactions helps build our digital identities andincreases the confidence we deliver indistinguishing trusted users from fraudsters. 2 eBook Partner Quarterly Q2 2017

Trends and Highlights from the Cybercrime BattlegroundThe Cybercrime battleground is morphing faster Q1 2017 represented our biggest digital quarter Percent rejected transactions per day Identity Abuse Index Low Medium Highthan many businesses can keep pace. Attacks are ever, with 130 million attacks detected and stopped 5%growing in complexity; fraudsters are employing by the Network.multiple attack vectors, combining pitch perfect 4%social engineering with Malware or remote access Key highlights from the Q1 Report include:for maximum impact. Similarly, bot attacks have 3%evolved beyond high-velocity spamming to • 35% increase in attacks over the previous year.sophisticated mass identity testing sessions. 2%They’re adopting low and slow attack speeds to • Growth in attacks outpaced transaction growthslip under the radar, defying normal rate control by 50%, illustrating the heighted risk levels. 1%measures and masquerading as legitimatecustomer traffic. • Significant increase in new account origination JAN 6 JAN 16 JAN 26 FEB 5 FEB 15 FEB 25 MAR 7 MAR 17 MAR 27 fraud for online banking.Released quarterly, the ThreatMetrix Cybercrime Attacks continue to be strongly influenced by Read the full Q1 2017 Cybercrime Report to learnReport is based on actual attacks detected by the • 80 million attacks on eCommerce merchants global data breaches, with the peaks in rejected more about the regional anatomy of attacks, keyThreatMetrix Digital Identity Network. The Network this quarter, a 45% rise year-over-year. transactions generally correlating with the periods attack patterns, and how attacks differ by industry.analyzes over 20 billion transactions a year, giving just after a large data breach, as stolen identityus unique insights into this complex battleground. • Emergence of Europe as a key cybercrime hub data is bought up en masse by fraudsters to use in with 50% more attacks originating in Europe attacks. compared to North America. 2 eBook Partner Quarterly Q2 2017 4

Spotlight: Why Behavioral Analytics Is No Longer Optional by Alisdair Faulkner, Chief Products Officer, ThreatMetrixAs consumer behavior becomes more diverse and ThreatMetrix behavioral analytics takes this a step Behavior Variables Age Variablesless predictable, and cybercrime evolves to further because it is underpinned by intelligenceincorporate complex, multi-vector attacks, from the Digital Identity Network: genuinely Velocity and frequency on a global, per-site, Frequency and timing of transactions, e.g.behavioral analytics are an indispensable part of dynamic, global data that is updated with all the per-event-type, per-device and time since first/last event, averageany fraud and security solution. rich diversity of user behavior patterns as they per-identity basis time between events transact online. The golden ticket for digitalDigital transactions continue to proliferate and so businesses in 2017 is the ability to leverage this Location / Distance Variables Expression Variablestoo does the diversity of user interactions online: vast pool of crowd-sourced intelligence andone person’s “unusual” is another person’s incorporate dynamic business rules into their Establishes trusted locations, distances Allows attributes and variables from a“normal” - transferring 5,000 pounds for some decision flow. between events etc. specific transaction to be combined intopeople might be a highly unusual event, but for a a mathematical expression. In addition,flourishing small business, it may be a normal Not only can this lead to better complex fraudweekly occurrence. detection, it can drastically reduce false positives, variables, logical expressions, static manual reviews and operational costs. But perhaps values, and attributes can be combinedIf organizations choose to confine user behavior to more importantly it can significantly reducea set of pre-defined business rules, they risk customer friction for a large and growing using Expression Condition Rules andfrustrating those good users who represent the proportion of a merchant’s customer base. Friction used in policies for complexoutliers of “normal”. Big travelers, people who that at best might cause frustration and at worst fraud decisioningfrequently visit countries that are considered might prompt defection to a competitor.“riskier”, big spenders, consumers with a large THREATMETRIXnumber of devices and so on. For more information on ThreatMetrix behavioral SMART RULES analytics, which we call Smart Rules, read about our recent Success Stories. Unlocking the power of dynamic rules for more 2 eBook Partner Quarterly Q2 2017 accurate fraud decisioning. 5

Product Update: Enhancing the Capabilities of the Dynamic Decision Platform for Next Generation Identity and Fraud ManagementIn our latest product update, ThreatMetrix has Integrating Digital Identity Intelligence withenhanced core elements of its Dynamic Decision behavioral analytics and machine learningPlatform to deliver best-in-class identity capabilities to enhance fraud detection. Theverification, authentication and fraud decisioning. platform also incorporates bespoke and third-party data sources for exception handling, while caseKey enhancements enable continuous and dynamic management helps to isolate and investigateoptimization of fraud decisions, new digital identity transactions that require further review.verification capabilities, and a new StrongCustomer Authentication (SCA) framework to For more information, read our latest press release,enhance the mobile offering and meet upcoming or listen to the webinar explaining these updates inPSD2 requirements. more detail.The Dynamic Decision Platform operationalizes DYNAMIC DECISION PLATFORMintelligence from the Digital Identity Network. SPRING 2017 RELEASE Key enhancements include new Digital Identity Verification capabilities, a new Strong Customer Authentication framework to enhance the mobile offering and meet upcoming PSD2 requirements and Case Management for continuous and dynamic optimization of fraud decisions. 2 eBook Partner Quarterly Q2 2017 6

PSD2: A Brave New World for Payments PSD2, the EU’s revised Payment Services Directive PSD2 will further accelerate the speed of disruption legislation, will undoubtedly herald one of the most by mandating banks to open their payments fundamental shifts in the digital payments account data to third parties through APIs and to landscape, and is one of the key talking points for perform Strong Consumer Authentication (SCA) for organizations Europe-wide and beyond. account access and payment authorization. PSD2 is part of a long-term ambition of the ThreatMetrix offers a holistic solution for PSD2, regulator to drive competition, innovation and which combines a strong authentication framework transparency across the European payments (one that incorporates strong DeviceID and push market, while enhancing the security of digital notification) with risk-based authentication. payments and account access. Therefore, this new directive seeks to provide the trust and openness For more information, please read our necessary to restructure the payments landscape PSD2 Whitepapers. in a truly agile way.2 eBook Partner Quarterly Q2 2017 7

The Power of Positive Partnership: VantivVantiv and ThreatMetrix are long standing allies in IDENTITY TESTING IS GROWING Vantiv, Inc. (NYSE: VNTV) is a leading paymentthe fight against fraud. Vantiv’s Fraud Toolkit processor differentiated by an integratedincludes online payment fraud protection tools that $5 credit card testing with charities technology platform. Vantiv offers ause card attributes to detect and prevent potentially comprehensive suite of traditional and innovativefraudulent transactions, like being able to identify Legitimate transactions identity spoofing transactions payment processing and technology solutions tobehavior shifts in card usage that ultimately point merchants and financial institutions of all sizes,right to the thieves themselves. And their advanced enabling them to address their paymentfraud tools, which are powered by ThreatMetrix™, processing needs through a single provider.expand detection to additional dimensions Vantiv builds strong relationships with itsincluding device and IP address/location, to thwart customers, helping them become more efficient,more syndicated, organized crime. more secure and more successful. Vantiv is the largest merchant acquirer and the largest PINRecently featured in our Q4 2016 CyberCrime debit acquirer based on number of transactionsReport, Vantiv has collaborated with ThreatMetrix in the U.S. The company’s growth strategyto identify new forms of fraud and card testing in includes expanding further into high-growththe non-profit sector. channels and verticals, including integrated payments, eCommerce, and merchant bank.Read more about this positive partnership in ourjoint case study. Visit Vantiv at the new www.vantiv.com. 21 FEB 23 FEB 25 FEB 27 FEB 29 FEB 2 MAR 4 MAR 6 MAR 8 MAR 10 MAR 12 MAR 14 MAR 2016 2016 2016 2016 2016 2016 2016 2016 2016 2016 2016 2016 2 eBook Partner Quarterly Q2 2017 8

What’s New for Partners QUESTIONS? As always, your alliance manager is the best place to start for help. But if you aren’t sure who to contact, you can always reach out to the team via [email protected]. For technical issues please contact [email protected]. Enablement Resources ThreatMetrix in the News Out and AboutNEW On-Demand Training Global brands increasingly target Find ThreatMetrix at the following upcoming events. Let us know if you’ll be there too!We’ve heard your feedback loud and clear! We are Chinese digital users, as latest datapleased to announce the availability of our first On- reveals China to be the top cybercrime HOLD THE DATE! CONFERENCESDemand training modules, designed for fraud spot in Asia Pacific region…READ MOREanalysts, policy administrators and ThreaMetrix Global Digital Identity Summit - San Francisco, Regional Digital Identity Summits - Hong Kongsystem administrators. On-Demand courses will Europe overtakes U.S. to become the September 18-20 and London have recently played host to our firstenable your team members and your clients to largest perpetrator of global Our annual Global Digital Identity Summit in San two regional Digital Identity Summits. Just lastaccess valuable ThreatMetrix training 24x7 cybercrime…READ MORE Francisco, September 18-20, is shaping up to be a week, over 130 delegates enjoyed spectacularanywhere in the world. Contact your alliance spectacular event. We look forward to seeing you views and forward-thinking presentations at Themanager for details about getting access. U.S. emerges as primary target for there! Shard in London, an event that challenged the cybercrime attacks with 35% increase audience to think differently about identity.NEW Case Study in global attack volumes…READ MORE Reserve your space at the Global Digital IdentityProPay, a TSYS Company reduces client Summit by registering here. • Cloud Identity Summit - Chicago June 19-22chargebacks by up to 95%…READ MORE Partner Session: September 18, 2017. Our • Money 20/20 - Copenhagen, June 26-28 upcoming event will feature a special session dedicated to our partners. Please plan to join us • MRC - Amsterdam, September 27-29 for lunch, 12 noon, Monday September 18th, and the afternoon session from 3:00-5:00 PM. Location • LendIT - London, October 9-10 and agenda details will follow, but for now, please RSVP for the lunch and/or the session by emailing • Trustech - Cannes, November 28-30 [email protected]. • Money 20/20 - Las Vegas, October 23-26 2 eBook Partner Quarterly Q2 2017 9