Financial crime in the digital age is an area of increasing concern as the rapid shift to online banking and commerce has seen an increasing number of consumers fall victim to financial crime over the last year. More than ever, fraud detection needs to keep up with the digitization of finance and banking. Herein lies the tremendous value of San Mateo and Lisbon based fintech, Feedzai, a startup focused on fraud detection.
Feedzai’s algorithms provide incredibly quick (within 3 milliseconds) fraud detection through its artificial intelligence and machine learning platform. With Feedzai, companies are able to have customer and third-party data processed to identify, asses, and accelerate the remediation of potential threats. With the company’s solutions, crime detection rates are significantly higher, resulting in increased profitability for its user with lower rates of false positives. While the company formerly only focused on identifying transaction fraud, it has recently expanded to anti-money laundering and fake account openings in order to more comprehensively meet the needs of its clients across adjacencies of fraud detection.
Today, Feedzai’s platform is a must for the world’s leading financial institutions, payment providers, and merchants. It counts 80% of the Fortune 500 among its roster of clientele, who are relying heavily on its platform to manage the risk of financial crime while enabling optimized experiences for end users. It monitors over 800 million customers in 190 countries, including 4 of the 5 largest banks in the U.S. Its usefulness is paramount in a climate where, in the last quarter of 2020 alone, consumers saw a 650% increase in account takeover scams, and a 250% increase in online banking fraud attacks compared with the first quarter of 2020.
As the need for Feedzai and its technology increases, so does the investment in the company in order to help it grow to meet demand. Just recently, Feedzai announced a funding round of over $277 million which brings the fintech to a $1 billion valuation, minting it as a unicorn. It was shared that the capital will be harnessed to increase fraud detection capabilities as well as build more extensive integrations with other platforms to support clients with financial operations.
Usurping the traditional fraud detection tools with manual defined fraud criteria through using intelligent AI and algorithms to provide more accurate checks within milliseconds, is the future of financial security. As the digitization of banking becomes the norm, the reliance on companies such as Feedzai to manage risk and potential fraud will become paramount.