Q & A: Andre Edelbrock

Data sharing is a method of fraud protection employed by industries that extend well beyond the Internet gaming and financial industries.

While certain companies, such as 888 and bwin are leading the way by signing data-sharing agreements with fraud management firm Ethoca, some merchants, especially in the I-gaming industry, are resistant to the idea of sharing data for fear of competitors becoming privy to proprietary information.

IGN sat down with Ethoca President and CEO Andre Edelbrock to discuss fraud management solutions for companies in the I-gaming arena.

IGN: How did Ethoca get involved with the I-gaming industry?

Edelbrock: We started working with the I-gaming industry early on in the company, so, I guess you could say, around late 2005, early 2006. The idea for Ethoca really came out of the I-gaming industry. I worked at CryptoLogic for about four or five years heading up their e-cash and fraud organization. During that time, toward the end, I would sit around with a number of key players in the industry, like the 888s and the bwins, and we would talk about data sharing and say: "Fraud is bad for you, it's bad for us--it's bad for the industry. Why don't we work together?" So, it was a natural place for us to start. There was that strong desire for the industry to be an innovator on data sharing.

IGN: What does Ethoca get out of working with the I-gaming industry and how does it compare with other industries?

Edelbrock: What we get from working with the I-gaming industry are innovators for data sharing. I-gaming companies have clearly been, for us, the early and enthusiastic adopters of data sharing. And what's exciting about that is it's an industry with global reach and significant scale in terms of customer activity. When we look at organizations like bwin and 888 who have stepped up, it really gives us that seal of approval, that credibility that data sharing is that next step in fraud management.

What it gives us when you compare it to other industries is proof that data sharing can go beyond just the financial-related activity, like a chargeback on a credit card, or a returned check or ACH deposit. It extends into other types of unwanted activity, like problem gambling, sharing poker colluders, a chip dumper, bonus abuse or affiliate fraud. That type of activity doesn't exist in all industries, but it shows you there is applicability for non payment-related activity.

IGN: What is the biggest threat to I-gaming companies in terms of fraud in your opinion?

Edelbrock: I would look at it in two ways. So, when you look at the biggest threat, the external threat is the fraudsters thinking a merchant or a company is an easy target. So, our view is that it's critical for those fraudsters to know that it's hard to profit from defrauding a merchant. And what those fraudsters need to see and hear is that that particular organization is doing what it takes to keep them out, to make it difficult--if not impossible--for them to defraud. The average fraudster will go where it's easy to go, and if a company makes it hard for them, they'll go elsewhere. And if a company doesn't make the fraudsters out there feel it is difficult, then word's going to spread and that merchant will become a bigger target.

When you look at it from the perspective of an an internal threat, a lot of these companies have very valuable customer and prospect data, and these companies and organizations need to do everything they can to protect it.

IGN: What is the single most important thing a gaming company can do to protect itself from fraud?

Edelbrock: With respect to what you'd do in terms of deploying fraud management tools and strategies, there is no silver bullet. I would say, without question, jump in with data sharing.

But seriously, it all starts with focusing on the opportunity or the issue. What I mean by that is an organization needs to start with a strategic view that fraud management is a profit opportunity and not a cost of doing business. To do that they have to make sure they have leadership in that organization that lives and breathes that on a daily basis and is accountable to and setting a clear strategy for fraud management with profit in mind.

IGN: Other than signing a data sharing agreement with Ethoca, what sort of plan would you recommend to an I-gaming company in need of data protection?

Edelbrock: One of the top barriers to success is security of data. You have to take the position that you're going to invest in it early, because early investment is going to drive down the long-term costs of protecting the data.

So, take a stand early. Invest in it early. Focus on it. And, like I said on protecting from fraud, on the data-sharing side you have to have someone in your organization that's qualified and that can be held accountable for as long as you're in business. They need to build around them a team, then leverage auditors and bring in external people to review what you've done. It's not that you shouldn't trust your own expertise, but no better way to get a view on how you're doing than to get someone else to come in.