Identity, Risk Assessments/Management

New identity screening products promise reduced fraud through behavioral analytics

A woman is silhouetted against a projection of a password log-in dialog box on Aug. 9, 2017, in London. (Photo by Leon Neal/Getty Images)

With financial identity fraud on the rise, identity monitoring developer Neuro-ID launched two new products Wednesday that can help financial firms screen employees’ or customers’ identities “at-scale” and better root out false or stolen identities.

The Whitefish, Montana-based startup announced ID Crowd Alert and ID Orchestrator, which promise to integrate with existing authentication and security platforms to help enterprises improve their fraud detection at the identity verification phase using behavioral analytics. More advanced identity tools are becoming increasingly necessary for financial institutions, which not only are under growing threat from bad actors imitating their customers, but which also bear the burden of know-your-customer (KYC) and anti-money laundering (AML) compliance requirements, according to Neuro-ID.

According to a recent study from Aite-Novarica, half (50%) of financial institutions financial compliance and AML executives consider the volume of false positives as “their top concern,” as cited by the Neuro-ID release. The study, "Key Trends Driving AML Compliance Transformation in 2022 and Beyond," found that KYC and subsequent Customer Due Diligence compliance was financial executives’ second biggest worry, as cited by 27% of respondents.

Financial compliance professionals in the study expressed concern that pointing out too many potential red flags with false or hijacked identities would waste security professionals’ time, cost the organization unnecessarily, and perhaps most dauntingly, turn off or anger legitimate customers who found their credentials being questioned too often. Neuro-ID financial industry customers, including Intuit, Affirm, OppFi and Elephant Insurance, have doubled their conversion rates and decreased their fraud rates by 35%, according to a November release from the company.

“Recent headlines underscore the tidal wave of identity fraud that impacts both large and small companies across the globe,” Jack Alton, CEO at Neuro-ID, said in a prepared release for the launch. “Until now, limited visibility into crowd-level- and applicant-level -behavior has made it impossible to maintain a proper balance between fraud screening without detracting from an exceptional customer experience.”

The new products work in tandem, with the ID Crowd Alert offering proactive monitoring and alerts when it detects fraud rings or botnet incursions, and the ID Orchestrator reviewing identities across a wide swath of applicants, looking at their behavior and how they enter their personally identifiable information (PII).

In November 2021, Neuro-ID raised $35 million in Series B funding, led by Canapi Ventures, which also included previous investors Fin VC and TTV Capital. At the time, the company announced it would use the additional capital to “accelerate its mission of unlocking conversion and optimizing fraud screening for digital organizations of all sizes,” according to a release at the time.

In recent news, Neuro-ID reported that “following a year of expansion” it had nearly quadrupled its client roster and revenue growth, and increased the number of customers it monitors by 500%.

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