Let’s find out more about their strategy in an insightful interview with Christina Bradshaw, Fraud Market Expert at Featurespace.
Could you share with our readers what is Featurespace, some details on the idea that triggered the foundation of the company and the problems in the industry it is striving to solve?
Of course! Featurespace is the world-leader in Adaptive Behavioural Analytics and creator of ARIC – a real-time risk management platform. Crafted from over 30 years of research from the labs of Cambridge Universitys Engineering Department, ARIC uses powerful machine learning models to asses risk, spot, and defend from new fraud attacks as they occur, while at the same time reducing customer friction. Instead of focusing on ‘bad behaviour’, we look to the normal, ‘good behaviour’ to recognise subtle patterns and anomalies to determine when an individual is acting out of character. Ive worked with other well-known ‘AI’ fraud prevention vendors, and what really sets Featurespace apart is ARIC’s truly self-learning, allowing our models to automatically update, as new patterns emerge. This means that minimum manual input is required, and there is no degradation of performance, making for a more manageable and efficient operations.
This is a significant achievement in the fight against fraud for financial institutions, as a shocking number are still reliant on rules-based or siloed systems and unnecessary manual processes. Our platform enables issuing and acquiring banks, credit unions, payment service providers, and payment facilitators to merge their data inputs across channels and geographies to outsmart risk across their enterprises.
Given your international coverage, what insights can you share with us regarding fraud across different countries and verticals?
The good news is that the technology and expertise available have never been better positioned to combat fraud. While everyone in fraud knows its always changing, there is an aspect of consistency that I see repeated across the globe. Of course, there are loads of new regulatory and compliance requirements upcoming in both Europe and the US which are currently taking centre stage for the largest global financial institutions. Interestingly, these more traditionally vulnerable organisations like banks are, for the most part, already ahead of the curve when it comes to mitigating risks from new fraud attacks, and are focused on things like meeting new regulatory requirements, increasing customer experience, and innovating and enhancing their competitive capabilities. A lot of what I do today is centred around these areas. Its really rewarding to help a fraud team be successful and then take it to the next level by enabling them to expand their services and capabilities through new commercial opportunities.
Another interesting aspect is that we are seeing unprecedented shifts within the payments ecosystem. There seems to be a daily headline about a new merger, acquisition, or launch of a new product or technology somewhere in the world. Im really excited to see how this will allow for new integrations and collaboration at levels not possible before. This will make it even more imperative for at-risk businesses like issuing and acquiring banks to implement appropriate technology and tighten up their best practices so they can more quickly and easily adapt to emerging risks and opportunities.
Can you name some of the emerging risks and opportunities issuers and acquirers face nowadays?
You bet. I touched a bit on this a moment ago, but there are broadly three categories of emerging risk and opportunities issuers and acquirers are faced with today: fraud attacks and exploitations of new payments technologies, regulatory and compliance requirements, and increased competition within the market.
While most fraud types we see are increasing in sophistication, so are our tools to combat them. Many of our customers are maintaining fraud and false positive rates at historically low levels, and the focus is on maintaining an agile defence against the unknowns. This is where Featurespace is particularly strong given our methods of leveraging positive behaviour over more traditional approaches to machine learning. This enables our customers to adapt much more quickly to new data elements, payment methods, and changes in spend and other behaviour patterns.
From a regulatory and compliance perspective, PSD2 is the primary concern for businesses in Europe, while CCPA and a smorgasbord of new payments laws enacted, or soon to be enacted, at state level, are a potential risk to financial institutions in the US. States move much faster than the Federal government, so theres risk of a patchwork of requirements instead of a country-wide standard. Also, in the US, money laundering and shell companies are top concerns of the Federal Trade Commission, and they have been increased their focus on these areas.
Lastly, issuers and acquirers are facing pressures of competition and demand for innovative solutions. Technology now enables fraud teams to address new commercial opportunities. Instead of only leveraging their skills in-house, through a multi-tenancy platform like ours, they can provide their services and technology direct to customers like other banks or merchants for the first time. Some of our customers have really paved the way here and are now providing their own best-in-class fraud solutions powered by Featurespace.
About Christina Bradshaw
Christina is an experienced payments fraud professional and senior operations leader. Her current passion is in large scale financial services and merchant fraud prevention, including fraud product and service commercialisation. She has a track record of building best-in-class teams, enabling customers to be successful, and is awarded for delivering results for several of the worlds largest merchants and acquirers. In her current role as Fraud SME, she supports the delivery and strategic alignment of Featurespaces suite of payments solutions and services, helping to drive innovation and ensuring success for clients.
About Featurespace
Featurespace is the world-leader in fraud prevention by combining adaptive behavioural analytics and anomaly detection to automatically identify risk and catch new attacks as they happen. The increased accuracy of understanding behaviour strikes the balance between improving fraud and risk detection and operational efficiencies, while also reducing the number of genuine transactions that would be incorrectly declined due to traditional rules by as much as 70%.
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