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Finovate Blog
Tracking fintech, banking & financial services innovations since 1994
Blockchain payment solutions company Rippleannounced this week it has signed Banco Rendimento to RippleNet Cloud. The addition of the Brazil-based bank marks the first bank to leverage Ripple’s cloud-based solution.
This news comes a year-and-a-half after Banco Rendimento joined RippleNet in 2019. “Migrating our payment infrastructure to RippleNet Cloud allows us to provide our customers with a best-in-class experience,” said Banco Rendimento FX Superintendent Jacques Zylbergeld. “Customers can now enjoy more transparency and easier navigation for both submitting payments and trading. RippleNet also allows us access to global partners, offering a standardized solution, and ensuring the integration and onboarding processes are seamless.”
Banco Rendimento considers itself a pioneer in the international payments space and is working to grow the payments ecosystem with high quality, fair cost solutions. With the implementation of RippleNet Cloud, the bank expects it will increase payment volumes by the first quarter of next year.
RippleNet is Ripple’s global payment network that connects 300+ financial institutions worldwide to enable faster, lower-cost payments. Currently, two dozen non-bank financial services companies, including Azimo, MoneyMatch, iRemit, Usend / Pontual, MoneyGram, and Viamericas, are clients of Ripple’s cloud service. And the customer list is increasing. Ripple reported that in the first quarter of this year, 81% of new RippleNet customers opted for cloud deployment and and 30% of all RippleNet payments are now being sent and/or received through RippleNet Cloud.
Earlier this year, Ripple announced that Azimo, in partnership with Thailand’s Siam Commercial bank (SCB), began leveraging RippleNet to launch instant cross-border payments from Europe to Thailand.
Ripple has offices in San Francisco, Washington D.C., New York, London, Mumbai, Singapore, São Paulo, Reykjavik and Dubai, and counts more than 300 customers around the world. The company’s payments network operates in 45+ countries across six continents. Ripple was founded in 2012 and has since amassed $294 million across 13 rounds of funding. Chris Larsen is founder and CEO.
Expense management platform Expensifylaunched its latest solution today. The offering, Concierge Travel, is a virtual travel assistant that makes it easier for travelers to build their itineraries and plan their excursions in the COVID-19 era.
“While most of us are avoiding travel right now, there are still essential workers whose trips can’t be cancelled or postponed,” Expensify CEO and founder David Barrett explained. “We want to help them travel in the safest possible way.”
Concierge Travel is available to Expensify cardholders and can be used to book flights, make hotel reservations, reserve rental cars and more – free of charge. All bookings via Concierge Travel also feature complimentary safety alerts and travel risk advisories from Global Rescue. The free Global Rescue membership offers a range of services for travelers including transportation to the cardholder’s hospital of choice in an emergency, as well as health and security assessments and entry and exit requirements for international travelers.
“With Concierge Travel, your free Global Rescue membership provides world-class safety and medical services,” Barrett added. “On top of that, Concierge lets you know about any COVID-related travel restrictions in advance, including specific stay-at-home orders in place, social distancing measures, and other info on the city you’re visiting.”
A Finovate alum since 2009, Expensify demonstrated the technology behind its expense management platform at our developers conference, FinDEVr Silicon Valley, in 2016. The company introduced its corporate card last fall, offering spending controls and expense management in a single solution that in some ways harkens back to the firm’s origins more than a decade ago.
“Expensify started as a corporate card way back in 2008 before we decided to focus on expense,” Barrett said when the card was launched, “so it’s fun to see the product come full circle with a card that naturally extends our existing platform.”
Founded in 2008 and headquartered in San Francisco, California, Expensify has raised $38.2 million in funding according to Crunchbase. The company includes Redpoint Ventures, OpenView, PJC, and Canadian Imperial Bank of Commerce (CIBC) among its investors.
Some of the biggest disruptions in financial services are coming from some of the least likely places. The challenger bank revolution, for one, is bringing new levels of competition to “old” finance.
The rise of challenger banks will be one of chief topics of our upcoming, all-digital FinovateAsia event next month. Helping drive that conversation will be Araminta Robertson of Mint Studios, a speaker, podcaster, and fintech writer who will moderate our Challenger Bank Power Panel on July 6th.
By way of introduction, we’ve invited Ms. Robertson to address another disruptive elephant in the financial services room: the rise of financial services offerings from popular technology companies with deep pockets and powerful brands.
Everyone working in the financial sector held their breath when Apple announced it was releasing a credit card.
Araminta Robertson
People have been discussing for years when the Big Tech companies will enter the world of financial service. In 2019, it became true. Apple released a credit card in the U.S. that allows you to sign up through your phone, connects with all your Apple devices and offers 2% cashback on transactions. Customers can immediately start using their Apple Card and even use the balance to send money to friends and family members. On top of that, customers can track all their spending on their phone and aren’t charged any late fees, international fees or general accounts fees.
How fintechs can compete with Apple
Fintechs, specifically challenger banks, are going to have to find new ways to up their game. Although some may not need to compete directly with Apple just yet (the Apple Card is only available in the U.S.), fintechs should start looking at strategies that will prepare them for a much more ambitious market. This is because Apple will soon be setting the bar for the industry, and customers will be expecting the same level of privacy, customer experience and quality of features as they get with Big Tech products. Here are a few approaches fintechs can consider in order to stand out.
Take branding seriously
To start with, it’s unlikely people will buy an Apple phone just to use the Apple card. This means that the Apple card will be primarily be used by iPhone and Apple fans. The good news is there is a large segment of the population that does not use Apple products and services or iPhones – and many who don’t want to be associated with the brand or would never trust Apple with their money.
This means that fintechs still have a chance to create their own brand, community, and customer base and should, therefore, take branding seriously.
Not only can fintechs use branding to stand out more, but with the appropriate licenses, they can offer other financial features that a Big Tech cannot. The Apple card does not allow users to invest in the stock market, buy cryptocurrencies, or perform bank-related actions. This is because Apple does not have a banking license, and will likely never hold one: becoming a bank is expensive, cumbersome, and not very profitable for a Big Tech.
Ted Rossman from CreditCards.com says so himself: he thinks people will only sign up to the Apple card because they love Apple. At the moment, they don’t offer any features that you can’t find somewhere else. Although they may offer unique features in the future, fintechs can still use this opportunity to position themselves as a trustworthy banking solution that is 100% devoted to managing people’s money securely. Apple does not have the flexibility to adjust its branding to a more banking-friendly image.
Focus on the underserved
The issue with Apple and the Apple Card is that it excludes a large section of the population. In fact, Apple as a brand does not work well with “financial inclusion”; if their phone costs $500, they can hardly say they are proponents of financial inclusion.
This is an important point because many challenger banks and fintechs have financial inclusion and literacy as a core principle, and are focusing on helping the underserved – it’s what drives them to create accessible products, offer lower fees and build a community around financial education. Those fintechs that are consumer-focused and take financial inclusion seriously can use this as a competitive advantage to build a brand that takes into account the underbanked.
Apple will not become a brand that provides for the underserved anytime soon, so that’s a market that will always be open for fintechs.
Encourage localization
As mentioned above, Apple will raise the bar and set the standard worldwide. However, it also means that their products and features are more generalized and meet a broader spectrum of audiences.
This is where fintechs in different countries can gain a competitive advantage by partnering up with local businesses, offering location-specific services, and building a brand that is more regional. Spanish citizens will likely appreciate a neobank that partners with the local food delivery apps, offers a unique Spanish bank card, and a specific Spanish saving product. In addition, local fintechs may be able to take advantage of country-specific regulations that may favor local companies rather than international conglomerates.
Although Apple will be able to localize the more it grows, it will only be able to do so to a certain extent. In many cases, we may find that locals would rather use a product that serves them extremely well in their own country rather than one that works pretty well in several countries. Having said that, Apple aggregates tons of data every year and there is no telling what kind of features may attract locals as well.
Although Apple is one of the most innovative and forward-thinking Big Tech companies in the world, local fintechs still have a chance to build their own brand and community. If anything, this may propel fintechs to up their game and keep adapting their products to customer demand.
Araminta Robertson is a writer and content strategist at Mint Studios. She helps fintech companies from all around the world use content marketing to create a community, build trust, and acquire quality customers. She has worked with some of the fastest growing fintech startups in SE Asia and London, U.K., and regularly speaks at conferences and events.
Facial recognition may be the hottest form of biometric authentication. But it’s far from the only – or even the most effective – biometric authentication method for all instances. In fact, as far as Redrock Biometrics is concerned, a superior alternative may lie in the palm of your hand.
“The PalmID solution far outperforms competitive touchless technologies, such as facial recognition, in terms of accuracy and reliability,” Redrock Biometrics co-founder Hua Yang said in a statement announcing the company’s latest partnership a few weeks ago. “It is the best available solution for touchless identity management, authentication and security.”
Founded in 2015 and headquartered in San Francisco, California, Redrock Biometrics is the developer of PalmID, a palm-scanning authentication solution that provides accurate, robust, no-additional-hardware-required biometric authentication via camera-bearing devices – ranging from smartphone, tablets, and laptops, to payment terminals (including ATMs), IOT devices, and even cars.
And at a time of social distancing and a preference for as much contact-free activity as possible, authentication technologies like PalmID are likely to be seen as increasingly attractive options. Add to this the challenge of face-based authentication in a world of mask-wearing employees and consumers, and the case for palm-based authentication becomes all the more compelling.
Identity management solution provider Q5id is the latest company to deploy Redrock Biometrics’ technology. Q5id, based in Beaverton, Oregon, announced last month that it would integrate PalmID into its biometric enrollment and authentication solutions. Q5id works with institutions in multiple verticals, including financial services, telecommunications, education, and e-commerce, to provide identity verification services via multi-factor authentication, live video, and active voice authentication. The fact that palm-scanning technologies are particularly hard to fool, according to Q5id chairman and CEO Steve Larson, is one of the reasons why the company partnered with Redrock. The solution’s high accuracy rate – and lack of a hardware requirement (compared to fingerprint scanners, for example) were additional selling points for the technology.
Redrock Biometrics’ PalmID works with both standard RGB and infrared cameras. The company notes that from a distance of approximately six inches, the average smartphone, laptop, or ATM camera can capture a good quality image of the unique skin patterns of the users palm. The captured image then undergoes a two-step process. First, the PalmID Capture Module uses machine learning technology to convert the RGB video input stream into a palm image that is ready for authentication. Second, the PalmID Matching Module, in real-time, matches the captured image against stored references. The technology uses proprietary algorithms to test images against large databases of palm images to prevent false positives.
PalmID has also been deployed recently to help provide an identity verification solution for mass transit and payments. The company partnered with FalconPro Technology in May, adding its PalmID software to a FalconPro camera module to create a simultaneous palm print and palm vein image capture. The goal is to create a large-scale authentication solution; pilot projects using the technology will be conducted in both the payments and public transit industries, according to FalconPro Technology CEO Xun You. FalconPro is a founding member of the Chinese Automatic Fare Collection System Association, and provides QR-code based digital ticketing systems for rail systems throughout China. The company sees its partnership with Redrock as potentially enabling it to “expand (its) product offering beyond barcode technology.”
Also this year, Redrock Biometrics forged a partnership with passwordless authentication solution provider HYPR, which will add the company’s PalmID technology to its platform. Redrock has also waived the license fee for its PalmID software for all essential businesses using the technology during the global public health crisis.
“COVID-19 quarantine made us acutely aware that touching devices represents a threat to our lives,” Redrock co-founder Lenny Kontsevich said. “People become touch-phobic and their faces are covered by masks, which creates a need for a touchless palm solution.”
Credit Sesame made the move to acquire STACK, a Canada-based challenger bank, today. Terms of the deal were not disclosed.
The announcement comes three months after Credit Sesame unveiledSesame Cash, a digital bank account powered by STACK. After a successful pilot in March, Credit Sesame began a widespread rollout of Sesame Cash in mid-May. Since then, the company has onboarded more than 200,000 users to the new service. Now, as Credit Sesame reports, “the demand continues to surge with thousands of new accounts per day…”
Today’s acquisition will also help Credit Sesame expand geographically. The company’s financial management services will be available within STACK’s platform. The move into Canada marks Credit Sesame’s first step toward international expansion.
“Together with STACK, we are combining the power of smart banking and AI-driven credit management to create a new kind of personal finance,” said Credit Sesame CEO and Founder Adrian Nazari. “How much cash you have, and how and when you use your cash, have a big impact on your credit. Adding cash management to our credit platform was a natural next step to better help consumers manage their overall financial health, and it creates a unique benefit for our consumers and financial partners.”
The Sesame Cash account is aimed at underserved users and individuals living paycheck-to-paycheck. Some of the features include free daily credit score refreshes, cash rewards for improving credit, early payday, and real-time transaction notifications. The account comes with a Mastercard debit card that offers Mastercard Zero Liability protection, direct deposit, the ability to freeze or unfreeze the debit card in-app, and more.
Credit Sesame, which most recently demoed at FinovateSpring 2015, plans to launch more features, including a smart billpay service, transaction roundups to save or pay down debt, rewards programs, and credit-building opportunities. The company plans to reveal these offerings “over the next few months.”
Former STACK CEO Miro Pavletic is now Credit Sesame’s General Manager of Canadian and International Business. STACK’s former COO Nicolas Dinh and former CPO Ranjit Sarai have transitioned to serve within Credit Sesame’s banking services. STACK’s Canada-based employees will work out of Toronto, Canada-based STACK offices.
Fintech has always had a digital backbone. Cashless payments. Security tokens. Robo advisors. Invoice financing. Mobile banking. And hundreds of other connectors, all building the path for a digital future, a future where companies are growing and innovating faster than ever.
From a buyer side, companies need technology to digitally do business. From a seller side, companies have to deliver these services and solutions. And all sides need confidence that Finovate’s fall events are going to run successfully to help them achieve their business needs. With all of that in mind, we’re embracing digital.
Now that the events have been moved online, you know FinovateFall Digital and FinovateWest Digital will take place. You can plan with 100% confidence, see more solutions, expand your reach, and access highly curated and produced content. These are all things Finovate is already known for.
Because of Finovate’s quality standards, these won’t be like any other digital events you’ve seen before. Live and on-demand content will put your finger on the pulse of the industry. Live Q&A and polls will ensure you can engage directly with speakers. And 24/7 networking and an app packed with fintech enthusiasts will make it easy to start a conversation with the right person.
Demos will be live streamed throughout the events, plus available on-demand to 1,000+ senior fintech leaders. All demo companies will have virtual booths for Q&A, deeper product dives, and 1-to-1 meetings. Plus, we’ll deliver leads to everyone participating. Visit the event websites above for more information.
The future of fintech is digital, and we hope to see you digitally this fall.
Digital receipt management specialist – and FinovateFall Best of Show winner – Sensibill has forged a new partnership that will put its receipt capture and management solution in the hands of more banking customers.
JPMorgan has agreed to integrate Sensibill’s technology into its Chase Mobile Banking app, making it easier for the firm’s customers to manage expenses, provide proof of purchase for insurance claims, and monitor spending “at a granular level.”
The offering will be made available to the 38 million active users of Chase’s mobile app as part of a progressive rollout later this year. As the U.S. consumer and commercial banking business of JPMorgan Chase & Co., Chase has 4,900+ branches in 38 states and the District of Columbia, as well as a network of 16,000 ATMs.
“Chase has created a digital banking experience that makes it easier for consumers and businesses to manage their finances,” co-founder and Sensibill CEO Corey Gross said. “Through our partners with Chase, millions of customers will have access to a best-in-class product that solves the hassle of expense and receipt management.”
Sensibill’s smart receipt management enables users to capture any physical receipt or invoice by taking a photo or forwarding an email. The solution leverages optical character recognition (OCR) and AI to turn receipt images into categorizable data that can be downloaded into expense reports, spreadsheets, or other digital documents. Sensibill makes it easier to organize and add context to expenses, and includes functionality to link receipts to card transactions for SKU-level visibility into spending.
The technology also helps financial institutions enhance their customer engagement by leveraging digital receipt data to offer more personalized solutions. Sensibill’s 75 financial institution partners in North America and the U.K. have used the technology to spot small businesses that may be ready to migrate from a personal to a business account, identify non-card spending patterns to better guide their own product offerings, and build brand loyalty.
Founded in 2013, Sensibill has raised $55.4 million in funding according to Crunchbase. The company, based in Toronto, Ontario, Canada, includes Radical Ventures, First Ascent Ventures, Information Venture Partners, Impression Ventures, and Mistral Venture Partners among its investors.
I feel the need to start this piece with a disclaimer: Racial bias and gender bias are two completely different issues. Both women and people of color, however, face stereotypes and suffer from wage discrimination. And though the battles are different, some of the tools used in the fight are the same.
While both women in fintech and ethnic diversity in fintech efforts have been around for half a decade, the women in fintech crusade has managed to gain a fair amount of momentum. There are now hundreds of passionate activists that promote women in fintech.
Even though the tech industry as a whole has a long way to go to achieve gender equality, the truth is that we have even further to go until we reach parity for black and brown workers. The following graph from Information is Beautiful shows the employee breakdown by ethnicity and gender at top tech companies in 2017.
The message is that the technology community has a lot of work to do. Each of us– not only as companies, but also as individuals– has a responsibility to take concrete action to help elevate ethnic diversity within our industry.
The movement to promote women has already begun to successfully create change and growth in the fintech industry. Here are a few things that are working for gender diversity that we can use to further promote ethnic diversity.
Mentorship
Networking events
Organized member associations
School programs
Competitions
While it can be difficult to know where to start, perhaps begin with a simple action such as following more black and brown voices on social media to hear perspectives you might not otherwise hear. You can also become a member of an existing organization, such as Blacks in Technology, or simply donate to the cause. Small actions will add up and change begins with individuals.
In a round led by New York-based growth equity firm Left Lane Capital, money management platform M1 Finance has raised $33 million in new capital. The Series B, which also featured the participation of Jump Capital, Clocktower Technology Ventures, as well as existing M1 investors, takes the company’s total funding to $53.2 million, according to Crunchbase.
The investment comes at the halfway mark of a year in which the company reached $1 billion in customer assets managed and added more than $650 million in customer deposits to its platform. The company noted that it achieved the $1 billion AUM milestone faster and with less funding than many of its competitors.
“We’ve built the premier personal finance platform that combines the best of digital investing, borrowing, and banking, and have done so on relatively little funding,” company CEO and founder Brian Barnes said. “That is a testament to the team and culture we have here. We’re just getting started and look forward to accelerating our growth with this new funding and strong new partners.”
The M1 personal finance platform consists of three main, integrated solutions to help users build wealth over the long-term, respond to intermediate-term financial challenges and needs, and manage near-term spending and saving. M1 Invest is the platform’s free investment solution that enables investors to build customized portfolios of stocks and exchange-traded funds (ETFs). The module features both fractional share functionality and advanced automation. M1 Borrow is the platform’s line-of-credit product, which offers rates between 2.0% and 3.5%. M1 Spend gives platform users an FDIC-insured digital checking account and debit card. This offering features a 1.00% APY and 1% cash-back on qualified purchases (with a subscription to the company’s M1 Plus upgrade).
“With M1, you can build an entire wealth strategy in only a few clicks, down to individual stocks and ETFs,” Barnes said. “We take it from there, handling all the day-to-day optimization, rebalancing, and re-investing according to your instructions so you can spend more time building strategies and less time executing them.”
Founded in 2015 and headquartered in Chicago, Illinois, M1 Finance demonstrated its platform at FinovateFall 2016.
Facebook-owned messaging giant WhatsApp announced today that users in Brazil can now send payments within its app.
The digital payments capabilities, powered by Facebook Pay, will allow users to send P2P payments to friends for no fee. The app also facilitates payments between WhatsApp users and businesses, but charges the business a 3.99% transaction fee.
With 120 million monthly active WhatsApp users, Brazil seems to have cut in line in front of India, which counts 400 million monthly active WhatsApp users, for the payments service. However, according to TechCrunch, WhatsApp has had difficulty sorting through regulations in India.
In the way of security, WhatsApp requires a 6-digit PIN or fingerprint to authenticate transactions. WhatsApp is working with Banco do Brasil, Nubank, and Sicredi to accept Visa and Mastercard debit or credit cards. Latin America’s largest payment systems company, Cielo, was chosen to be the payments processor.
There is no word on further international expansion for WhatsApp’s in-app payment capabilities.
Digital identity verification specialist Socure has introduced a new solution to help accelerate and scale customer acquisition. Intelligent KYC, launched last week, leverages advanced graph analytics, unsupervised machine learning, and a sizable volume of data sources to give businesses higher auto-approval rates compared to legacy identity verification systems, as well as fewer manual reviews.
“In the digital-first world, compliance teams need hyper-accuracy in their use of KYC tools without introducing more friction for customers or costly reviews for their operations teams,” Socure CEO Tom Thimot explained. “Intelligent KYC is the industry’s most sophisticated KYC solution and will push our clients far beyond check-box compliance.”
Available as both an individual solution as well as part of an end-to-end integrated, identity fraud engine, Intelligent KYC is especially suited for institutions serving underserved populations – from millennials with thin credit files to newly-arrived immigrants with no domestic credit record. Intelligent KYC leverages machine learning to access more than 310 million entities and three billion records from a wide variety of authoritative sources including credit header and inquiry, utility and telecommunications companies, and more.
Writing about the concept of Intelligent KYC on the Socure blog, privacy, data security, and fintech attorney and company advisor Annie C. Bai noted the emphasis that Socure’s solution places on precision accuracy in the initial phases of the KYC process. This accuracy, Bai explained, “is not only valuable for initial results but has downstream benefits as the cornerstone of understanding the customer.” Bai highlighted diversity in data, automated analytics, and user empowerment as three key differentiators between traditional legacy KYC and Socure’s latest offering.
“Socure’s market-leading identity fraud scores, (enable) an automated 90% customer acceptance rate, a 95% fraud capture rate, a 10% reduction in false positives, and over 50% reduction in manual reviews,” Bai wrote.
Founded in 2012 by Sunil Madhu, Socure most recently demonstrated its digital identity verification and fraud protection solution, Socure ID+, at FinovateFall in 2017. Recognized in March as one of America’s Best Startup Employers by Forbes, and named to Inc. Magazine’s Best Workplaces 2020 roster in May, Socure was also recently featured as a Gartner Cool Vendor in Artificial Intelligence for Banking and Investment Services.
Headquartered in New York City, Socure has raised nearly $62 million in funding from investors including ff Venture Capital, Scale Venture Partners, Commerce Ventures, and Flint Capital.
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.
