COVID-19 and the Fight Against Cyberfraud

Crises, such as the current coronavirus pandemic, often bring out the best in us. But troubled times can also provide opportunities for unscrupulous and malevolent actors to take advantage of people’s anxieties and fears.

The hoarding of personal protective equipment that occurred early in the coronavirus crisis and the spread of crazy conspiracy theories about the origins of the virus have helped create a climate of fear and suspicion. This can make dealing reasonably and confidently with the crisis that much more challenging for all of us.

Unscrupulous and malevolent actors are also taking advantage of people’s financial anxieties and fears during this time. Our Fraudtech Digital Day – part of Finovate Fintech Halftime Review – will take a close look at how the cybersecurity threats before the crisis struck have intensified in many ways in the weeks and months since.

How big is the current cybersecurity problem for financial services firms and their customers? What technologies are being deployed to help financial firms and other businesses stay one step ahead of the fraudsters? How can businesses defend themselves against fraud while still providing the kind of seamless, digital experience consumers demand? These are some of the topics we’ll discuss as part of our FraudTech Digital Day.

To whet your cybersecurity whistle, we’re sharing excerpts from our conversation earlier this month with BioCatch co-founder and Chief Cyber Officer Uri Rivner. We spoke with Mr. Rivner about the new threats to cybersecurity that have arisen with the global public health crisis of COVID-19.

“Fraud isn’t going away and, in fact, we anticipate a surge in account takeover activity as criminals scale up their cash-out operations,” Rivner said. “They already have the data they need to steal more money, but they need to scale their infrastructure.”

BioCatch specializes in providing behavior-based authentication and threat detection solutions. Headquartered in New York and Israel, and founded in 2011, the company demonstrated its Passive Biometrics/Invisible Challenge technology at FinovateFall. BioCatch’s platform analyzes 2,000 behavioral parameters based on user-device interaction, and leverages this data to build real-time risk scores that provide continuous authentication and a superior defense against account fraud, social engineering scams, and more.

“We’ve taken a scientific field in cognitive studies, something that was working in the lab, and made it extremely practical for use in solving the biggest issues in online fraud,” Rivner explained. “(A)cross dozens of banks, credit card issuers and companies outside the financial sector, (we are) protecting over 100 million online and mobile users. We’ve tackled issues that were initially deemed impossible to solve.”

Here are some key takeaways from our conversation.

On the threat of increased fraud and cybercrime during the pandemic

If I had to pick one community that is definitely going to thrive during a global virus outbreak, it’s online fraudsters. They have a golden opportunity to scale their operations while entire companies move their fraud operations and analytics teams to a work from home model, which is not an easy process for, say, a major bank. 

On the danger of identity theft and why behavioral-based authentication is key to fighting it

The most scalable fraud operation is opening credit card or personal loan accounts. All you need is to buy a bigger list of stolen identity records, and have a team of people opening accounts in other people’s names. Identity theft is reported to sky-rocket, and it can be quite dangerous, especially if it’s a new digital service that is launching these days. If a new digital service is targeted by a massive campaign, there will be more fraud applications than real applications – that’s disastrous.

Traditional defenses such as checking KYC (know your customer) data and device recognition no longer hold, and new technologies such as behavioral biometrics are used to stop such fraud campaigns and reduce false rejections due to high security bars.

On the role of enabling technologies and “the right kind of AI” to help fight fraud

Machine Learning can instantly look at thousands of features, resulting in an extremely accurate model that predicts fraud and can adapt itself when cyber criminals change their strategy. At BioCatch we have over 2,000 such features.

An important consideration though is that some machine learning models are a black box and don’t really provide insights into why a certain action is risky. BioCatch, for example, uses Explainable AI models to make sure customers can get the reasons why a score was high, as well as many negative and positive behavioral factors observed during a session. 


Read the rest of our conversation with Uri Rivner. And learn more about how to join us for our Finovate Fintech Halftime Review at our digital event hub.

BioCatch, the COVID-19 Crisis, and Winning the Race Against Cyberfraud

Photo by Roman Pohorecki from Pexels

We caught up with Uri Rivner, co-founder and Chief Cyber Officer of BioCatch, a leading cybersecurity firm that provides behavior-based authentication and threat detection solutions to banks, e-commerce platforms, as well as mobile and web applications.

We wanted to learn how the company, founded in 2011 and headquartered in Israel and New York, has fared in the wake of its major $145 million spring fundraising. We also wanted to hear about the new cybersecurity environment brought on by the global public health crisis and what BioCatch is doing to help institutions manage this challenge.

Finovate: You are one of the founders of BioCatch, and your current role with the company is Chief Cyber Officer? What does this role entail within the company?

Uri Rivner: I was actually head of new technologies at security giant RSA when, in 2011, a foreign state hacked into RSA. It was one of the most famous hacking incidents in history, and following that I was on the look for new technologies that can help the industry against cyber attacks and online fraud. BioCatch, then a very young company, came to us at RSA to present the tech, which sounded really sci-fi. I was impressed and introduced them to industry players who all said that if this was working as advertised, this is a game-changing technology.

At some point the founders of BioCatch asked me to join as a co-founder and help them build the business. I joined mid-2012 as VP of Cyber Strategy. My current role as Chief Cyber Officer is to identify new cybercrime business problems the technology can address, and provide internal and external thought leadership on the role of behavioral biometrics in digital transformation and fighting online fraud.

Finovate: When we last shared BioCatch news with our readers, it was in April on the heels of the company’s $145 million fundraising. How big of a moment was that for BioCatch?

Rivner: It was a major milestone. A vote of confidence that showed us how well the market appreciates what we have accomplished. We’ve taken a scientific field in cognitive studies, something that was working in the lab, and made it extremely practical for use in solving the biggest issues in online fraud across dozens of banks, credit card issuers and companies outside the financial sector, protecting over 100 million online and mobile users. We’ve tackled issues that were initially deemed impossible to solve. And we’ve done all of that with very happy customers and a highly scalable product. It was a proud moment, but at the same time also a commitment to work very hard to justify the trust of our new investors!

Finovate: What has BioCatch been up to in the weeks since then – specifically, how has the COVID-19 crisis impacted the work your company does?

Rivner: Our team has shifted to a work from home model; it was done quite efficiently, and we experienced no issues in continuing to serve customers. We run in the cloud, and there was no interruption to the service. The customers also moved to the same mode of operation.

Finovate: Let’s talk about some of the new security challenges that have developed during the pandemic. It seems like there are fraud “hotspots” everywhere: COVID aid/relief fraud, the security issues of Work From Home, and the potential for identity crime in any track and trace program. Can you talk a little about the cybersecurity landscape in the era of COVID-19?

Rivner: If I had to pick one community that is definitely going to thrive during a global virus outbreak, it’s online fraudsters. They have a golden opportunity to scale their operations while entire companies move their fraud operations and analytics teams to a work from home model, which is not an easy process for, say, a major bank. Here are some of the trends to watch for:

Stimulus Fraud 

American taxpayers get a direct deposit to their bank account using the information included in the last tax return they filed. If they haven’t filed a tax return for 2019 yet, it’s then a race with the fraudsters, who will try to beat them to it and provide a falsified tax return including a bank account that they control. This means the stimulus deposit will go to the bad guys. There are many people who do not file tax returns and go to a website where their information is validated and a check is sent to their address. That’s an easy venue for identity thieves who can obtain full identity records for all U.S. citizens in the dark web. Fraudsters are also impersonating small businesses to apply for stimulus loans using similar methods. In short, it’s a fraudster’s heaven.

Account Opening Fraud

The most scalable fraud operation is opening credit card or personal loan accounts. All you need is to buy a bigger list of stolen identity records, and have a team of people opening accounts in other people’s names. Identity theft is reported to sky-rocket, and it can be quite dangerous, especially if it’s a new digital service that is launching these days. If a new digital service is targeted by a massive campaign, there will be more fraud applications than real applications – that’s disastrous. Traditional defenses such as checking KYC (know your customer) data and device recognition no longer hold, and new technologies such as behavioral biometrics are used to stop such fraud campaigns and reduce false rejections due to high security bars.

Corona Tracker Rogue Apps

Cyber space is teeming with coronavirus scams. The most dangerous scams are the ones that manage to trick users into downloading rogue apps onto their mobile device. They’ll look like useful tools that alert you when a coronavirus carrier is in your immediate vicinity or providing CDC-approved virus contagion maps. But, in reality, they’re after your mobile banking app and mobile e-commerce purchases.

Social Engineering… From ‘Your Bank’ 

“Hey, we’re your bank, and wanted to reach out! The branch is closed, so we’re the friendly help desk. We’ve noticed some issues in your account, and would like to help you sort it out. Can you please install this utility to help us run some tests remotely?” You know the rest of this story.

Uri Rivner demonstrating BioCatch’s Passive Biometrics/Invisible Challenges technology at the company’s Finovate debut in 2014.

Finovate: Earlier this year you were part of a conference presentation that highlighted the importance of machine learning and AI in fighting fraud. What about these enabling technologies is so beneficial when it comes to cybersecurity?

Rivner: My lecture talked about how Sherlock Holmes managed in A Case of Identity to identify an imposter based on a dozen or so “features” related to the typewriter they used to type love letters. Machine Learning can instantly look at thousands of features, resulting in an extremely accurate model that predicts fraud and can adapt itself when cyber criminals change their strategy. At BioCatch we have over 2,000 such features – and not even good old Sherlock could have managed that many in his identity model!

An important consideration though is that some machine learning models are a black box and don’t really provide insights into why a certain action is risky. BioCatch, for example, uses Explainable AI models to make sure customers can get the reasons why a score was high, as well as many negative and positive behavioral factors observed during a session. 

Finovate: What can we expect from BioCatch over the balance of 2020? Has the global health crisis made it more difficult to have visibility into the second half of the year? 

Rivner: Fraud isn’t going away and, in fact, we anticipate a surge in account takeover activity as criminals scale up their cash-out operations. They already have the data they need to steal more money, but they need to scale their infrastructure. Think of mule accounts for moving money out of victim’s account. The crisis makes it easy to recruit mules in work-from-home scams, and to open bogus bank accounts to which stolen money can be moved. Right now criminals are busy doing just that, preparing for a big wave of attacks that is likely to focus on real-time payments such as the relatively new Zelle infrastructure in the U.S., or similar services elsewhere. So demand for a frictionless control that stops fraud and highlights genuine behavior is going to increase.

Behavioral Biometrics Specialist BioCatch Scores $145 Million in New Funding

In a round led by Bain Capital Tech Opportunities, behavioral biometric innovator BioCatch has secured a major $145 million investment. The Series C round featured participation from new and existing investors including Industry Ventures and American Express Ventures, and boosts the company’s total capital to more than $186 million.

BioCatch chairman and CEO Howard Edelstein put the company’s news and recent accomplishments in the context of the challenges brought about by the COVID-19 global pandemic. “The current environment has spawned a large increase in bad actors seeking to take advantage of distracted individuals working from home or dispersed companies whose technologists are scattered in remote locations,” Edelstein said. “In such times, technologies like behavioral biometrics become more important than ever.”

In a post published at the company blog, BioCatch Product Leader Ayelet Biger-Levin noted that since the pandemic began and more people began social distancing and working remotely, “phishing and malware have been the primary source of scams and cyberattacks.” Biger-Levin added that financial institutions are especially vulnerable to social engineering schemes in which unwitting victims are tricked into making authorized but fraudulent transactions.

BioCatch leverages more than 2,000 bio-behavioral, cognitive, and physiological parameters to create real-time risk scores that enable institutions to defend themselves against both human and non-human cyber threats. The company’s technology provides identity proofing to fight new account and account takeover fraud, as well as continuous authentication to verify identity from login to logout.

“BioCatch has quickly established itself as the pioneer in the digital identity space by developing next-generation behavioral biometrics technology that integrates fraud detection and authentication capabilities to protect end-users and their most sensitive transactions,” Bain Capital Tech Opportunities Managing Director Dewey Awad said.

BioCatch demonstrated its Passive Biometrics/Invisible Challenges feature of its platform at FinovateFall. The company has secured more than 50 patents, has 90+ million users, and has provided more than 10x ROI based on testimonials from customers such as NatWest, American Express, and Itau Unibanco.

Earlier this year, the company acquired fraud and anomaly detection specialist AimBrain. Founded in 2011, BioCatch is headquartered in Tel Aviv, Israel.

Finovate Alumni News

On Finovate.com

  • Blockchain-Based Payments and Rebooting the Financial System.

Around the web

  • BioCatch beefs up insights on behavioral biometrics platform.
  • Fujitsu partners with Personetics to leverage Personetics’ cognitive AI recommendation engine for its new personalized banking cloud service.
  • AutoRABIT partners with nCino to help banks deploy software solutions on the nCino Bank Operating System faster.

This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.

Finovate Alumni News

On the web

  • Zopa Tests Savings Product Before Full Launch.
  • Starling Bank Offers Income Protection Insurance Via Anorak Partnership.
  • Q2 Closes Acquisition of PrecisionLender.

Around the web

  • Revolut unveils metal cards in silver and space grey.
  • Chief Administrative Officer of the Royal Bank of Scotland interviews BioCatch CEO.
  • ITSector inaugurates 6th Software Development Center that will focus on the financial sector, AI, and 5G.

This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.

Finovate Alumni News

On Finovate.com

  • Scalable Capital Raises $28 Million.
  • Finicity Launches Student Loan Account Verification.

Around the web

  • Splitit announces partnership with music software provider Ableton.
  • Jack Henry reports partnerships with 57 community financial institutions in fiscal 2019.
  • Western Union deploys customer journey optimization solution, Nexidia, from Nice Systems.
  • Venmo launches instant transfers to bank accounts.
  • Quadient unveils new archived document and data retrieval solution.
  • Euromoney features BioCatch in its look at the fintech scene in Israel.
  • SuperMoney tops $2 billion in loan requests via its online lending marketplace platform.

This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.

BioCatch Brings on New Chief Revenue Officer

Behavioral biometrics expert BioCatch brought on a new team member today. The company appointed Bill Sytsma as Chief Revenue Officer.

Bill Sytsma

Sytsma is a 20-year veteran of the software and security industry. Most recently, he served as a vice president of sales at ThreatMetrix. In addition to that role, Sytsma has worked at Emulex, iPass, Aveksa, Lumigent Technologies, and EMC.

“As we accelerate our plans for growth, Bill is the ideal person to lead the effort,” said BioCatch CEO Howard Edelstein. “He has vast experience as well as a proven ability to scale global sales efforts, secure new client relationships and drive revenue, exactly what is needed to enhance the results generated by our seasoned and talented team to date.”

The appointment of Sytsma is the latest in a recent string of C-level appointments for Israel-based BioCatch. Last year, the company named Gadi Mazor COO and Paul Mattison CFO.

BioCatch’s technology works by embedding what the company calls Invisible Challenges into online and mobile user experiences. The challenges are a set of subtle tests that the user subconsciously responds to. The user’s responses help to distinguish themselves over a fraudulent person or bot without interrupting the user experience.

BioCatch has raised $41.6 million since it was founded in 2011. At FinovateFall 2014, the company’s cofounder Uri Rivner demoed how some of the Invisible Challenges work.

Finovate Alumni News

On Finovate

  • Holvi Expands to Five New European Markets.
  • Artivest Inks Deal with Institutional Investment Manager LaSalle.
  • BioCatch Brings on New Chief Revenue Officer.
  • Yseop Pairs Up with Larsen & Toubro Infotech.

Around the web

  • Inc. names Blend, Kabbage, Lendio, Plaid, Pendo, Signifyd, and Ripple among the best places to work.
  • Alt Coin Magazine interviews Steven Parker, Crypterium CEO.
  • Interactions‘ IVA was named the top virtual assistant in Speech Technology Magazine’s 2019 People’s Choice Awards.
  • Salt Edge Open Banking API now supports eIDAS PSD2 certificates.
  • NIIT Technologies launches Cognitive Service Desk Audit, a tool to help applications understand and interpret user needs through natural communication.

This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.

Finovate Alumni News

On Finovate.com

  • Simple’s Payments Go Analog with Paper Checks.
  • Fenergo Supports Bahrain’s Blockchain-Based KYC.
  • Flywire Offers Chinese Students and Patients Discounted FX Rates.
  • doxo and Plaid Team Up to Bring Overdraft Protection to Billpay.

Around the web

  • ACI extends partnership with Vocalink into Saudi Arabia to facilitate the adoption of real-time payments through ACI’s UP Real-Time Payments solution.
  • First National Bank selects ProfitStars’ Commercial Lending Center Suite.
  • Centrale Kredietverlening selects nCino for its Bank Operating System.
  • Wipro develops blockchain-based solution with R3 to power digital currency transactions for Thailand banks.
  • Klarna and Stripe partner to offer Klarna’s Pay in 3 to Hideout festivalgoers through ticketing platform Kaboodle.
  • Forbes highlights BioCatch’s behavioral biometrics fraud prevention technology.
  • Insuritas and Tower Hill Specialty partner to bring Tower Hill’s property products to market through Insuritas’ bank partner network.
  • NIIT Technologies partners with Blue Chip to bring its wealth management application to Blue Chip’s IBM POWER.

This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.

Finovate Alumni News

On Finovate.com

  • BlueVine and GovQuote Team Up to Fund SMEs.
  • Bpm’online Focuses on Customization, Clean Data in Latest Update.

Around the web

  • Sberbank Croatia chooses Token for PSD2 compliance.
  • Silicon Canals highlights Meniga in its list of 10 Cool Icelandic Tech Startups to Work for in 2019.
  • MX wins a 2019 Utah Genius award.
  • U.Today features Stash and Crealogix in its roundup of Top 12 FinTech Companies to Watch in 2019.
  • Xignite earns spot on the WealthTech 100.
  • Lendio franchise opens in Erie to expand access to capital for local businesses
  • InComm’s Alder API wins award from the Innovative Payments Association.
  • BioCatch’s behavioral biometrics-based digital identity solution now available on the ForgeRock Marketplace.

This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.

BioCatch Teams Up with Entersekt

A new partnership between behavioral biometrics innovator BioCatch and fintech solution provider Entersekt will help financial services companies offer more secure digital banking and payment experiences for their customers. With options like passwordless login and enhanced remote user registration, the collaboration will give clients a “one-stop-shop” for continuous and multi-factor authentication.

Entersekt SVP for North America Sherif Samy called BioCatch’s technology “an exciting alternative” to the biometric-based security solutions already provided on its platform. “It will add value for our customers, especially in usability, by helping to determine when step-up authentication is really required and when we can safely leave the user to go about their business uninterrupted,” Samy said.

BioCatch analyzes the interactions between users and their devices to reduce fraud and provide online identity verification. The partnership means that when BioCatch’s biometric behavioral technology identifies anomalous behavior, it sends an alert to Entersekt’s security platform for an out-of-band, multi-factor authentication (MFA) via device validation.

“Our combined approach with Entersekt answers the call,” Avi Turgeman, BioCatch founder and CTO said of the challenge of simultaneously providing a seamless customer experience and strong online security.” The collaboration, he said, joins “(b)ehavioral biometrics as ‘who you are,’ the mobile device as ‘what you have,’ and the additional elements required to step up a transaction in real time if there is a problem.”

BioCatch demonstrated its Passive Biometrics technology at FinovateFall 2014. Founded in 2011 and headquartered in Israel, the company announced earlier this month that it was adding touchscreen pressure to its set of behavioral biometrics. At the beginning of the year, BioCatch unveiled a new solution designed to help fight “vishing,” a form of automated push payment fraud.

With investors including Blumberg Capital, OurCrowd, and Maverick Ventures Israel, BioCatch has raised $41.6 million in funding.

South Africa-based Entersekt presented Securing Mobile Applications Through Transport Layer Diversity at our developers conference, FinDEVr SiliconValley in 2014. The company’s technology is deployed in 45 countries around the world, and defends 150 million transactions a month from cyberfraud.

Last month, Samy was recognized by One World Identity (OWI) as a top influencer in the field of digital identity. Entersekt began 2019 with a number of major hires, bringing on digital identity and business development specialist Jennifer Singh, as well as adding a country manager for South Africa and a VP of engineering services.

Finovate Alumni News

On Finovate.com

  • eToro Buys Blockchain Company Firmo.

Around the web

  • ING Belgium and ING Netherlands invite Minna Technologies to participate in the ING FinTech Village accelerator.
  • Tink delivers split transactions feature.
  • Pitchbook ranks OurCrowd as most active Israeli VC firm in terms of the number of deals.

This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.