Post on 16-Jul-2015
© 2014 PayPal Inc. All rights reserved. Confidential and proprietary.
Big Data and Financial
Risk Management
December 1, 2014
© 2014 PayPal Inc. All rights reserved. Confidential and proprietary.
at a glance
143M active accounts in nearly 200 countries
180B payment volume in 2013; ↑24% YoY
2B+ events/day
12 TB new data added per day
7.5M payments per day, 5,000 every minute
500K+ real time queries per second
Less than 100ms average response time
We are talking a lot of data …Big Data!
© 2014 PayPal Inc. All rights reserved. Confidential and proprietary.
• Key dangers stated by experts (partial list):
Buyer Fraud
• Good account is taken over by fraudster (e.g., using phishing)
• Identity theft (using a stolen credit-card in a new account)
• There are not sufficient funds in the Bank
Seller Fraud
• Order never arrives/ merchants don’t send it
• Product is significantly not what you ordered (e.g., picture of iPhone and not an iPhone…)
There is also AUP, AML, terror-funding, etc.,…
Risk/Fraud is regarded many times as a big threat to
online/mobile commerce
© 2014 PayPal Inc. All rights reserved. Confidential and proprietary.
• % of Transactions with fraudulent activity is very close to ZERO!
• Well ahead of our competitors (traditional and start-up competitors)
PayPal gives protection:
• Full buyer/purchase protection (if the seller was fraudulent)
• Full Seller protection for tangible goods
• Global expansion to digital-goods/non-tangible Seller protection as well
However, reality (at least with PayPal) is so much better…
© 2014 PayPal Inc. All rights reserved. Confidential and proprietary.
Car…….. Pat….. Created: Aug 30, 2013
P… Tho… Legit PayPal user
t0 $686.55
Al… Wo…. Created: Sep 3, 2013
t+1:03 min. $673.54
D… Mar… Legit PayPal user
J… Smi… Legit PayPal user
I… Le… Legit PayPal user
Jam…….. Lo….. Created: Aug 30, 2013
Tom…….. Men….. Created: Aug 30, 2013
Alb…….. Rich….. Created: Aug 30, 2013
Fio… Jec…. Created: Sep 3, 2013
Don…….. Li….. Created: Aug 30, 2013
Anj…….. Por….. Created: Aug 30, 2013
t+0:23 min. $686.55
t+1:21 min. $686.55
t+1:47 min. $686.55
t+0:58 min. $686.55
t+0:35 min. $686.55
t+2:00 min. $686.55
© 2014 PayPal Inc. All rights reserved. Confidential and proprietary.
Identity
IP
Phone num.
Device
Location
Phone
Name
Connection
Change IP
Change num.
© 2014 PayPal Inc. All rights reserved. Confidential and proprietary.
Identity
IP
Phone num.
Change IP
Change num. Name
Location
Phone
Connection
Device IP b-class
IP whois
IP geo
Phone geo
Phone type
© 2014 PayPal Inc. All rights reserved. Confidential and proprietary.
Fraudsters are people like you and me, they also have habits
Scaling attacks requires them to generate a lot of information
© 2014 PayPal Inc. All rights reserved. Confidential and proprietary.
ana… para. pro… Premier - Mexican Verified borigita...@hotmail.com Time Created: Jun 20, 2013 10:24:26 Contact Information julion 8… huniero culiacan, Sinaloa 895932 Mexico Home: +52 5278…….9700808 Date of Birth: 1981
gab.. noc… sino… Premier - Mexican Verified e…lmxmx@hotmail.com Time Created: Jun 20, 2013 10:43:33 Contact Information culubire 8… amada culiacan, Sinaloa 49693 Mexico Home: +52 5374……9978989 Date of Birth: 1981
mor… ind… ca… Premier - Mexican Verified d…lxlx@hotmail.com Time Created: Jun 20, 2013 09:46:35 Contact Information poier 9… esdirre culiacan, Sinaloa 59879 Mexico Home: +52 52…..697998 Date of Birth: 1981
sir…. bon… pas…. Premier - Mexican Verified ju.…pxpx@hotmail.com Time Created: Jun 20, 2013 10:33:41 Contact Information camjutuli 4… indio culiacan, Sinaloa 43869 Mexico Home: +52 52……9798 Date of Birth: 1981
mar… sin… pit… Premier - Mexican Verified ci……pepe@hotmail.com Time Created: Jun 20, 2013 10:16:19 Contact Information esburgos 9…. pancho culiacan, Sinaloa 38692 Mexico Home: +52 527……9969798 Date of Birth: 1981
Behavioral patterns: • Jun 20, 2013 – Signup • Aug 10, 2013 – Added CC • Jan 11, 2014 – Confirmed CC
Same actions, same dates!
• Name pattern • Account type • Country • Email pattern • City • Date of birth
© 2014 PayPal Inc. All rights reserved. Confidential and proprietary.
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Input
Generation
Algorithm
Execution
Output
Generation
~3 hour run-time
Output:
26 week x 1M accounts
5 min per week
Memory based (not MR)
~150k account a week
~15M account from the last
two years
© 2014 PayPal Inc. All rights reserved. Confidential and proprietary.
Merchant Industry in PayPal data is partial and incorrect
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• Required only for business accounts
• Incorrect user inputs (lying? / negligent?)
Example 3 – Ambiguous categories:
• Retail (not elsewhere classified)/Chemicals and allied products
• Business/General
• Hardware and Software
Sells:
’Tickets’
Example 1:
Declared:
‘Sports &
Recreation/
General’
18
Sells:
’Fashion’
Example 2:
Declared:
‘Business to
Business/Acc
ounting’
© 2014 PayPal Inc. All rights reserved. Confidential and proprietary.
True Industry
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• An automated system for merchant website
categorization:
• Identifies seller websites using PayPal known URL’s
• Crawls seller websites for terms and additional attributes
• Categorizes sites to industry categories by applying statistical
modeling
• Training process is done offline based on examples to
produce a predictive model
© 2014 PayPal Inc. All rights reserved. Confidential and proprietary.
Category probability estimation example – “Travel” category
20
Random site scores from training set
“Travel” site scores from training set For each site, we estimate the probability of it belonging to each category given its weight
© 2014 PayPal Inc. All rights reserved. Confidential and proprietary.
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73%
91%
39%
84%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
PayPal and Agent True Industry
True Industry Performance
Accuracy
Coverage
© 2014 PayPal Inc. All rights reserved. Confidential and proprietary.
cost, speed
data volume, accuracy
Effective decision = func (accuracy, speed, cost)
data age
secon
ds
ho
urs
years
Data in-motion
Data in-use
Tiered Big-Data strategy
© 2014 PayPal Inc. All rights reserved. Confidential and proprietary.
Working HL Flow
Crawler Crawler
Manager URL list
Crawled data
Sellers’ Potential Details
External Data source
Queries
API data Attributes
output
Common Infra
THE
WEB
WEB
SERVICES DB
/FILES