How Swan Bitcoin keeps loss rates down and stays a step ahead of fraud
Company Size
11-200
Region
- America
Country
- United States
Product
- Swan Bitcoin
- Sift Account Defense
Tech Stack
- Sift Console
- Sift workflows
Implementation Scale
- Enterprise-wide Deployment
Impact Metrics
- Cost Savings
- Productivity Improvements
Technology Category
- Application Infrastructure & Middleware - API Integration & Management
- Cybersecurity & Privacy - Application Security
Applicable Industries
- Finance & Insurance
Applicable Functions
- Business Operation
Use Cases
- Cybersecurity
- Fraud Detection
Services
- Cybersecurity Services
- System Integration
About The Customer
Swan Bitcoin is a quickly expanding, leading bitcoin savings app that hit the market in March of 2020 in 49 U.S. states. The app started as a gifting service for people to learn more about bitcoin, and has since evolved into an onramp to help consumers understand bitcoin with educational resources, seamlessly set up recurring bitcoin purchases straight from users’ bank accounts, help companies purchase bitcoin for corporate treasury, and serve retirement accounts and trusts for long-term savers. Today, Swan is expanding its services to the financial advisor industry as well as employers who are looking to offer a Bitcoin benefit plan to their employees.
The Challenge
When Swan Bitcoin first launched, the platform experienced an influx of fraudulent transfers, chargebacks, and identity reuse that ultimately led to a significant loss rate. The team identified multiple accounts formed under the same identity, spamming SMS with an influx of phone numbers that made it difficult to keep up with. And although implementing an upfront passwordless login system helped reduce fraud rates, the platform was not entirely free and clear of fraud. Swan recognized they needed a more robust fraud prevention solution to stay a step ahead of the sophisticated tactics they were facing. But being in the security-conscious Bitcoin space, Swan also wanted to be sensitive to their customers’ privacy. Because of these concerns, one-time emails and burner phone numbers are more popular with their users—and likely to be key indicators of fraud in many industries. But for Swan, they could simply be the byproduct of cautious but trusted users looking to protect their identities. This made it especially important for Swan to take into account a larger range of signals, and not apply undue friction to every customer.
The Solution
Within the first couple of months of operation, Swan Bitcoin integrated Sift Account Defense in an effort to get ahead of the fraud they were starting to see across the platform. At first, Swan’s fraud team started using score-based workflows and freezing accounts through manual review, gradually introducing limits, and then advancing to workflows to get a deeper understanding of fraud patterns. Swan utilizes a few key workflows to boost efficiency—one of which is used to trigger manual review when Swan users buy bitcoin for the first time, file a chargeback, or transact in a different country. These higher-risk actions feed into the Sift review queue and the accounts are either limited or terminated, depending on the data compiled in the Sift Console. To strengthen their efforts, data from multiple fraud prevention vendors, as well as Swan’s internal fraud detection metrics, are aggregated into Sift. Swan’s fraud agents are able to look at Sift activity logs and correlation data to make the most informed, accurate risk and operations decisions possible.
Operational Impact
Quantitative Benefit
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