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Companies have been forging ahead with digital transformation at an unprecedented rate. This trend has accelerated over the past year due to the pandemic, and research indicates that it won’t slow down anytime soon. It will continue to be a top priority for a broad range of enterprises, and it will be an especially critical strategy for financial services firms.

And therein lies the challenge.

As the world moves more digital, there is a greater risk for cyber fraud. Particularly as banks and credit unions strive to remain relevant and grow new accounts, their digital transformation initiatives have become their Achilles heel – opening the door wider for cyber fraud.

The biggest problem we’re seeing today are cyber hackers impersonating real people in a very sophisticated and increasingly automated fashion.  

Not only are they impersonating people to gain access to accounts to steal monies, they also fabricate fake or “synthetic identities” to perpetuate fraud. Synthetic identity fraud, or SIF, is a complex form of identity theft in which the thing being imitated is a person.

According to the Federal Reserve, SIF is one of the fastest-growing types of financial crime in the U.S. And it is growing at a scale that is costing the financial industry billions of dollars a year.

This bad situation has been exacerbated these days as the financial services industry adapts to COVID-driven business challenges. With more prospective customers applying online and staff working remotely to review digital applications digitally, there’s more room for fraud. This digital shift is what has pushed SIF risk to a four-year high.

New Funding to Scale FiVerity

This is why today is such an exciting moment for the FiVerity team. With a great team and an innovative and highly effective anti-cyber fraud platform, this new funding will help us accelerate our growth and expand our platform to better support our customers.

Banks and financial service institutions have good teams and systems in place to protect against hackers and cyber-attacks. But those systems are generally rules-based, and rather than being fully automated, many require manual steps. Meanwhile, fraudsters are becoming more sophisticated and using AI to massively automate and scale their attacks. As a result, the systems currently deployed at most banks and credit unions just can’t keep up with the growing scale of the SIF problem.

In fact, the legacy rules-based systems used by banks and credit unions today are woefully inadequate at detecting emerging cyber fraud, letting more than 85% of SIF attacks slip through the cracks according to the Federal Reserve.  

The FiVerity Approach

The idea of FiVerity was born in 2017 when I founded the Boston AI Think Tank. It’s a forum of senior executives from financial institutions and government agencies exploring how AI can be used to modernize financial crime detection. The motivation for us coming together was our collective recognition of hackers’ and fraudsters’ increasing use of sophisticated AI and scaled automation in their attacks.

We all knew that to stand a fighting chance against bad actors armed with AI and automation tools, we needed better defensive weapons.  it was there and then that the idea and mission of FiVerity was born. To leverage advanced machine learning with the vast experience of expert fraud detection examiners and analysts into a platform that shares community resources for financial institutions to help detect and thwart cyber fraud.

Today FiVerity is delivering on that vision with our machine learning-powered platform. This innovative platform observes and captures cyber fraud behavior, strategies, and tactics used at scale, detecting fraud in new account applications and openings. Using advanced models and algorithms, and a unique ‘humans in the loop’ capability, the FiVerity Platform and solutions uncover patterns that are the telltale signs of other types of financial crimes.

To date, FiVerity has saved banks and credit unions millions of dollars by catching over 50% of previously undetected cyber fraud.

Our approach comes down to three key elements that make the difference in detecting and thwarting SIF attacks for starters, and other new types of fraud that are sure to come.

1) The FiVerity platform overlays the existing systems and third-party data-points that banks and financial institutions already have deployed in-house.

2) FiVerity’s ‘Human-in-the-Loop’ machine learning Platform leverages and continually learns from analysts, investigators, and fraud experts. This real-world expertise and insight is infused into the Platform, enabling it to detect suspicious activities far faster and more effectively than previously possible.

3) FiVerity also utilizes community intelligence sharing, giving banks, credit unions, and other financial services firms secure ways to share fraud intel without impacting the privacy of legitimate customers. A key enabler is sharing patterns of fraud without any need to share customers’ personally identifiable information.

In closing, I want to acknowledge that there is a mind-numbing array of vendors out there offering cybersecurity and anti-cybercrime solutions of all kinds.  Like people, however, organizations can be judged by the company they keep. FiVerity now has terrific investors who are joining with our top-notch advisors, regulators and government agencies, and law enforcement relationships – all of whom are excited about our approach, our platform and solutions, and mostly about the difference we can make in a market that’s under vicious and unrelenting assault.

See what has these experts and authorities so excited. Take a look at FiVerity.

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