Innovation from Cambridge FinTech trailblazer Featurespace has opened up a new market potentially worth millions of pounds to the business.
Working directly with the financial services industry, Featurespace has developed a PSD2-ready fraud solution that can be quickly deployed by banks to protect their customers and be in immediate compliance with new and pending regulations.
An industry first, Featurespace’s real-time machine learning ARIC platform is now equipped with predefined PSD2-specific data feeds and configurations – including rules and adaptive behavioural analytics – and can be enterprise-ready within three months.
Many financial institutions have already successfully deployed the PSD2-ready ARIC platform, with one large organisation completing a two-day implementation through cloud delivery.
PSD2 (Revised Payment Service Directive) means that banks’ monopoly on their customer’s account information and payment services is set to disappear. PSD2 enables bank customers, both consumers and businesses, to use third-party providers to manage their finances.
Martina King, CEO of Featurespace, said, “We have worked tirelessly with banks to build a tailor-made, compliant solution for the industry, which financial institutions can deploy quickly and be ready to protect their customers without increasing friction.
The ARIC platform understands individual behaviours in real-time to detect consumer anomalies and automatically decide which transactions to escalate to strong customer authentication.
More than 20 major financial institutions rely on Featurespace, a world leader in fraud detection and risk management, and the ARIC platform to detect anomalies, fight fraud and protect their customers.
The company’s real-time AI machine learning software risk-scores events in more than 180 countries.
Starting now, European banks, credit card firms and retailers will begin to adhere to European PSD2 rules, whereby they will collect and share data feeds behind the scenes during all online transactions.
The data will be used to mitigate against the growing spectre of ‘Card Not Present’ fraud where people’s card information is stolen and used by fraudsters.
The new rules are designed so that if the data feeds bring up any red flags (where there is data to indicate the transaction could be fraudulent), the system may ask specific online transactions for additional layers of authentication, such as using a device’s thumb print or facial recognition technology.
Since fraud detection and customer verification is going to require managing data on every individual online transaction going forward, the rising data workload is only going to become more critical to manage and it will need anti-fraud systems that quickly and accurately assess the risk for every online transaction. Featurespace’s newly refined technology will help manage the new workload.
In terms of market scale, estimates suggest eCommerce now makes up around 20 per cent of all retail spending in the UK alone. Also, UK Finance recently reported that CNP fraud in Britain rose 159 per cent in 2018 to more than £500 million, with more than two million fraudulent CNP transactions last year.