Transforming fraud prevention requires continuous innovation

Presented by Capital One
Building for complex challenges requires continuous innovation — and that includes fighting financial fraud.
According to the International Criminal Police Organization (INTERPOL), financial fraud is increasing both in frequency and sophistication. The rise of new technologies is driving new opportunities for fraudsters to take advantage of consumers. According to the Federal Trade Commission (FTC), consumers reported losing more than $10 billion to fraud in 2023 alone — a 14% increase compared to 2022.
For technology, product and business leaders, staying ahead of these bad actors is critical, and it requires you to not only address the problems of today, but anticipate the threats of tomorrow.
At Capital One, we embrace continuous innovation in all aspects of our business to help our customers succeed, including fraud prevention. But what does that look like in our products and experiences?
In our development of AirKey — a tap-based authentication method built into credit or debit cards to help financial institutions prevent fraud — continuous innovation has taken three forms: understanding of an evolving problem, technology transformation and curiosity about driving greater impact. A closer look at these forms of innovation reveals how other leaders can embrace an innovation-centric approach to address complex issues.
Continuous understanding of an evolving problem
Innovation requires both a deep understanding of a problem in the present and the foresight to anticipate how it will evolve. When it comes to product development, that means seeing problems where the industry sees a standard or “acceptable” solution and building product experiences that reset expectations.
You can think of this as “putting on your entrepreneur glasses.” Entrepreneurs — the really successful ones — have an uncanny ability to look at an industry and ask why things work the way they do. They spot problems and solutions that industry insiders see as “the way things are.” Putting on your entrepreneur glasses is about learning to see your business as if you were new to it, looking at it for the very first time. What makes sense? What makes you scratch your head and ask “why”?
AirKey, for example, was born from this approach. In developing AirKey — which is currently available on more than 75 million Capital One cards — we saw how traditional ways of authentication, like out-of-wallet questions, were no longer sufficient as fraud tactics evolved. We needed methods that would help us stay a step ahead of fraudsters, that were available to every customer, and that were intuitive to use.
This helped us recognize the opportunity to put authentication into customer’s hands without needing to rely on third-parties, such as email providers, mobile networks or hardware tokens to authenticate. The answer was refreshingly simple: use the credit or debit card we already give our customers as a tool for mobile authentication. Customers with an AirKey-enabled card could simply tap it to their smartphone to authenticate.
One way to replicate this type of success is by pulling back from your day-to-day work and looking at patterns. For example, is fraud getting worse or better? Are existing tools gaining or losing strength? Are customers fully satisfied with the methods available to them? And, what simple, convenient answers are available to solve their problems? The answers to questions like these are rarely obvious at first, but seem like common sense once you find them. The important thing is that you never stop listening, asking why or looking for feedback in your quest to find them.
Continuous technology transformation
Technology is never static — and when it comes to fraud prevention, effective solutions require ongoing improvement, testing and iteration. Standing still only opens the door to bad actors. Even if you’ve launched an incredible product, you need to avoid sitting back or simply taking a victory lap.
That doesn’t necessarily mean chasing new features, but effective scaling and iteration does call for deep technical exploration and feedback loops. You want to listen to the market and your customers, regardless of whether you like what you’re hearing. Early on, we received feedback that AirKey would only be useful if it supported browser experiences in addition to mobile apps. This was constructive feedback — as millions of consumers don’t use mobile apps — but the problem was difficult to solve given mixed support for browser-based NFC transactions. However, we focused on addressing this challenge and ultimately solved it through novel use of newly released capabilities across smartphones.
The combination of cross-functional teams, a constant ear to the ground for good and bad feedback, and a willingness to employ new technologies to solve customer problems are cornerstones for driving continuous technology transformation in your business and its products.
Continuous curiosity about greater impact
Innovation can take you in unanticipated directions and, particularly in the technology industry, original assumptions can quickly be proven wrong. You want to be flexible in the pursuit of value, especially when you’re breaking ground and seeing new opportunities in real time.
When we first started building AirKey, we thought of it as another option for customers to authenticate in a layered authentication strategy. But over time, we found that AirKey can unlock a particular set of high-risk transactions when used for authentication, enabling us to remove customer friction, improve fraud protection, and say “yes” to customers when we otherwise might say “no.” This also highlights the importance of asking, “What more can this product do?”
As innovators, we need to be continuously curious about how our products can drive new and greater business impact. If you’re willing to go beyond the original use case, you can unlock significant breakthroughs. Just look at the smartphone — it exists because people were willing to ask what more the device in their pocket could do beyond calls and text messages.
The cycle of innovation
Innovation isn’t a one time effort — it calls for continuous understanding of the evolving problem, iterating on technology, and staying curious about greater possibilities.
Tech, product and business leaders must embrace this mindset of continuous innovation to drive business value. By testing and learning, fostering cross-functional collaboration and reimagining what’s possible, companies can build products that address today’s challenges while being prepared for the threats of tomorrow.
Tom Poole is Senior Vice President, Emerging Payments at Capital One.
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