Introduction to Online Payments Risk Management

Chapter 8. Analysis: Understanding What’s Going On

The next step after detecting that something is going on is root cause analysis. Understanding the cause quickly and accurately allows you to solve the current issue as well as prepare for any future changes in the user’s behavior. As with anything, proper analysis starts with planning and is highly dependent on the architecture of your system and data availability.

Designing for Analysis

It is hard enough to understand what happens in your system as it is; lacking data, overlapping systems, and bad instrumentation just make it so much harder. When approaching system and data architecture, there are several things to remember that will make your work much easier.

Instrumentation and Data Retention

Many analysis attempts fail due to poor instrumentation and data retention. This usually stems from engineers optimizing for performance and storage size in production code and ends with missing data—since maintaining event-based historical data is not anywhere near the top of these engineers’ minds. The simplest example is canceled or rejected applications deleted after a very short while or saved in highly redacted form. When you try to model consumer behavior or merchant performance deterioration patterns based on cancellations and rejections in addition to purchases, you fail due to lack of data. The most advanced example is point-in-time analysis. When you build predictive systems, you always need to be able to look at purchases at the ...