Analytics and decision management technology company FICOannounced two new products this week as it snapped up security access provider EZMCOM. Transactional details of the acquisition were undisclosed.
The acquisition has facilitated the launch of FICO Identity Proofing, digital onboarding technology; and FICO User Authentication, a suite of multi-factor, biometric, and behavioral authentication capabilities.
EZMCOM was founded in 2006. The company’s identity proofing, biometric, behavioral and risk-based authentication technology is used by tier-1 banks across the globe, ultimately serving 60 million customers.
“As our clients expand their digital offerings, they are requesting more sophisticated identity proofing and authentication capabilities to complement our fraud, compliance, customer lifecycle, and customer engagement applications,” said FICO CTO Claus Moldt. “Behavioral and biometric authentication are becoming the gold standard to prevent identity spoofing and improve customer protection, while reducing friction. By adding this technology to our portfolio, we will provide our clients with a seamless approach to authentication and customer onboarding – across digital channels, mobile devices, servers and workstations.”
Founded in 1956 as Fair Isaac Corporation, FICO presented “Rapidly Deliver Contextually-Powered Stream Processing” at FinDEVr New York 2016.
While many of you were busy catching Pikachu last week, you may have missed that Nasdaq, in collaboration with KBW, launched an index to track financial technology. Officially named KBW Nasdaq Financial Technology Index (KFTX), the fund tracks 49 fintech companies, including 17 Finovate and FinDEVr alums.
On Monday, 18 July, the index opened at 1,000 points and closed at almost 1,014 points on Friday, 22 July.
Finovate and FinDEVr alums listed in the index include:
According to Nasdaq’s press release, the companies in the index “represent roughly one-fifth (18%) of the investable domestic financial universe and nearly 4% of the investable domestic equity universe to account for approximately $785 billion in total market cap.”
It’s worth noting that the index, which will be rebalanced quarterly, does not consider activity from private companies, startups, or banks. Large, public companies may not be as sprightly as two guys in a garage, but they create their fair share of cutting-edge products and services. When creating the index, KBW and Nasdaq adhered to three guidelines:
The companies mainly sell financial services
Not primarily brick-and-mortar operated
Income is generated from fees, rather than interest
Other companies in the index include (each company in the index is weighted equally):
Alliance Data Systems Corp. (ADS); Bankrate Inc. (RATE); Black Knight Financial Services Inc. (BKFS); BofI Holding Inc. (BOFI); Broadridge Financial Solutions Inc. (BR); Cardtronics Inc. (CATM); CBOE Holdings Inc. (CBOE); CME Group Inc. (CME); CoreLogic Inc. (CLGX); Dun & Bradstreet Corp. (DNB); Euronet Worldwide Inc. (EEFT); EverBank Financial Corp. (EVER); EVERTEC Inc. (EVTC); FactSet Research Systems Inc. (FDS); First Data Corp. (FDC); FleetCor Technologies Inc. (FLT); Global Payments Inc. (GPN); Intercontinental Exchange Inc. (ICE); MarketAxess Holdings Inc. (MKTX); Moody’s Corp. (MCO); MSCI Inc. (MSCI); Nasdaq Inc. (NDAQ); S&P Global Inc. (SPGI); SEI Investments Co. (SEIC); Square Inc. (SQ); SS&C Technologies Holdings Inc. (SSNC); Total System Services (TSS); The Western Union Co. (WU); VeriFone Systems Inc. (PAY); Verisk Analytics Inc. (VRSK); Virtu Financial Inc. (VIRT); and WEX Inc. (WEX).
In what I hope is the beginning of a trend, Pennsylvania State Employees Credit Union (PSECU) is offering free FICO credit scores to its online banking customers. The CU says more than 200,000 members are eligible to receive free scores.
Although, Wamu and HSBC (note 1) both offer free scores for their respective credit card customers, PSECU is the first financial institution to offer scores to checking account customers within the online banking area.
There is no charge for the service, but members must enroll to participate. A new score will be posted online each month in the online banking area. Members also have the option to receive alerts when their scores are updated.
The service is powered by Fair Isaac’sMyFICO service. According its press released today, the company is talking with other financial institutions about participating in the Scores on Statements program. Currently, 1.5 million consumers have access to free credit scores through the service.
Bottom line: Without knowing the financial arrangements, it’s impossible to estimate the ROI. But credit scores have real value to consumers and any financial institution providing them for free is likely to improve its standing. It’s also possible that a free credit score service could be a profit center if fee-based credit report monitoring options are marketed to enrollees of the free service (note 2).
PSECU page explaining the free FICO score program (link, 15 Jan 2008)
Notes: 1. Only HSBC’s Sears Solution MasterCard includes the free scores.