KuppingerCole Report
Leadership Compass
By John Tolbert

Fraud Reduction Intelligence Platforms

This report provides an overview of the market for Fraud Reduction Intelligence Platforms and provides you with a compass to help you to find the solution that best meets your needs. We examine the market segment, vendor service functionality, relative market share, and innovative approaches to providing Fraud Reduction Intelligence Platform solutions.

1 Introduction

Fraud is a major cost to businesses worldwide. Cybersecurity Ventures estimates that cybercrime costs will reach $10.5 trillion by 2025. Fraud has been exacerbated by the Covid pandemic. Banking, finance, payment services, and retail are some of the most frequent objectives of fraudsters, as expected. However, insurance, gaming, telecommunications, health care, cryptocurrency exchanges, government assistance agencies, travel and hospitality, and real estate are increasingly targeted as cybercriminals have realized that most online services trade in monetary equivalents. Moreover, after years in the sights of cybercriminals, banking and finance in general are better secured than other industries, so fraudsters attack any potentially lucrative target of opportunity. Fraud perpetrators also continually diversifying and innovating their Tactics, Techniques, and Procedures (TTPs).

The most prevalent types of fraud businesses and government agencies experience today are:

Account Takeover Fraud (ATO) - occurs when fraudsters use breached passwords and credential stuffing attacks to execute unauthorized transactions. Additional means for account takeover fraud are malware attacks (man in the middle and man in the browser) as well as the use of Remote Access Tools via Trojan or social engineering scams.

New Account Fraud (NAF) – also called Account Opening (AO) Fraud, often happens as a result of using stolen identities or assemblages of personal information to create a synthetic digital ID, and can be more difficult to detect but has advantages for attackers. This type involves gathering complete sets of or bits of PII (Personally Identifiable Information) on legitimate persons to construct illegitimate accounts. Educational, financial, and medical records can be sources of PII used for assembling fake accounts, which are then often used to abuse promotions and instant loans and/or used as mule accounts to move money around.

Other common fraud types that are encountered include:

SIM Swap Fraud – a SIM swap is a special type of ATO involving a change within Mobile Network Operator’s (MNO’s) device mapping database that points a phone number to a specific SIM card installed in customer phones. SIM Swap Fraud occurs when malicious actors convince MNO employees to associate victims’ mobile phone numbers with the fraudsters’ devices. Fraudsters may try to get information directly from victims or may buy victim info on the dark web in order to set the stage for these kinds of attacks. In this sense, it is a special kind of ATO fraud that relies upon social engineering and/or insider fraud.

Insider Fraud - includes not only financial theft by employees, contractors, or partners, but also the theft of intellectual property (IP), which may include customer information from CRM systems

Screen Scraping – programmatically scraping information entered into web forms by consumers and sending to other web services. This technique is (unfortunately, because it is insecure) sometimes used for legitimate purposes.

Inventory Skimming or Depletion – perpetrated largely by bots that buy up a retailer’s inventory to re-sell.

Fraudulent Insurance Claim Submission – insurance agents’ and brokers’ credentials are captured and used to authorize fraudulent insurance claims.

Real Estate Escrow Mis-Direct – real estate agents’ credentials are captured and used to send emails to customers to have them transfer large sums (down payments) to fraudsters’ accounts. These transfers are usually unrecoverable and can be devastating to home buyers.

Banking Overlays – malicious apps that look like login screens for mobile banking apps, designed to harvest credentials and hijack transactions.

Travel Site Overlays - malicious apps that look like login screens for mobile travel apps, designed to harvest credentials and hijack transactions.

The chief mitigation strategies against these types of fraud employ real-time risk analytics and decisioning. Risk-based Multi-Factor Authentication (MFA) can eliminate a substantial portion of ATOs by increasing authentication assurance levels. Risk-based MFA often evaluates credential intelligence, device intelligence, user behavioral analytics, and behavioral/passive biometrics. To decrease NAF/AO/Synthetic Fraud, increasing identity assurance at registration and authentication time with identity vetting services is recommended. Bot detection and management can also be helpful at cutting other types of fraud.

Risk-based MFA and transaction processing solutions operate optimally when integrated with or informed by Fraud Reduction Intelligence Platforms (FRIPs). FRIPs provide to risk-based MFA and transaction processing systems the information needed to make more accurate decisions on whether or not transactions should execute. FRIP solutions generally provide up to six major functions:

  • Identity proofing/vetting
  • Credential intelligence
  • Device intelligence
  • User behavioral analysis
  • Behavioral/passive biometrics
  • Bot detection & management

This report covers solutions that aggregate multiple fraud intelligence sources and provide advanced analytics services for customer organizations to augment their applications with the goal of reducing costly fraud.

1.1 Highlights

  • Fraud Reduction Intelligence Platforms are increasingly sought after by consumer facing businesses in all industries. Account takeovers and new acco ...
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1.2 Market Segment

The Fraud Reduction Intelligence Platform market is mature and growing, with some vendors offering full-featured solutions providing comprehensive fun ...

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1.3 Delivery models

In the Fraud Reduction Intelligence Platform market, solutions are generally offered as SaaS. It’s a consumable service, not usually something that ...

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1.4 Required capabilities

We are looking for comprehensive solutions that provide at least 4 of the 6 major areas of functionality areas. These are typically the requirements t ...

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2 Leadership

Selecting a vendor of a product or service must not only be based on the information provided in a KuppingerCole Leadership Compass. The Leadership Co ...

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2.1 Overall Leadership

IBM is in the highest position in the Overall Leader rating for Fraud Reduction Intelligence Platforms. Experian, Transmit Security, OneSpan, and BioC ...

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2.2 Product Leadership

Product Leadership is the first specific category examined below. This view is mainly based on the analysis of service features and the overall capabi ...

Product Leadership, or in this case Service Leadership, is where we examine the functional strength and completeness of services.

Fraud Reduction In ...

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2.3 Innovation Leadership

Next, we examine innovation in the marketplace. Innovation is, from our perspective, a key capability in all IT market segments. Customers require i ...

Innovation in FRIP manifests in several ways. Given the disparity in some of the features defined and technology requirements for delivering them, inn ...

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2.4 Market Leadership

Lastly, we analyze Market Leadership. This is an amalgamation of the number of customers, number of transactions or entities evaluated, ratio betwee ...

Broadcom, Experian, Outseer (RSA), Neustar, and IBM are in the highest echelon of market leadership. They have been in the fraud prevention business f ...

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3 Correlated View

While the Leadership charts identify leading vendors in certain categories, many customers are looking not only for a product leader, but for a vendor ...

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3.1 The Market/Product Matrix

Vendors below the line have a weaker market position than expected according to their product maturity. Vendors above the line are sort of “overperf ...

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3.2 The Product/Innovation Matrix

This view shows how Product Leadership and Innovation Leadership are correlated. It is not surprising that there is a pretty good correlation between ...

Vendors below the line are more innovative, vendors above the line are, compared to the current Product Leadership positioning, less innovative.

The ...

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3.3 The Innovation/Market Matrix

The third matrix shows how Innovation Leadership and Market Leadership are related. Some vendors might perform well in the market without being Innova ...

Vendors above the line are performing well in the market as well as showing Innovation Leadership; while vendors below the line show an ability to inn ...

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4 Products and Vendors at a Glance

This section provides an overview of the various products we have analyzed within this KuppingerCole Leadership Compass on Fraud Reduction Intelligenc ...

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In addition, we provide in Table 2 an overview which also contains four additional ratings for the vendor, going beyond the product view provided in the previous section. While the rating for Financial Strength applies to the vendor, the other ratings apply to the product.

5 Product/Vendor evaluation

This section contains a quick rating for every product/service we’ve included in this KuppingerCole Leadership Compass document. For many of the pro ...

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5.1 Arkose Labs

Arkose Labs is a well-funded startup established in 2017 out in San Francisco. Their solution is focused on reduction of the most common fraud types, ...

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5.2 BioCatch

BioCatch is a well-funded, late-stage venture-backed FRIP service provider that was founded in Tel Aviv in 2011. They have offices around the world an ...

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5.3 Broadcom Inc.

Broadcom’s entry in this market originated with Arcot Systems, a 3DS pioneer acquired by CA Technologies in 2010. Broadcom, a global IT vendor, has ...

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5.4 Cleafy

Cleafy was established in 2014 in Milan. In 2017, it became part of the Moviri Group, a global software and professional services company with offices ...

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5.5 Experian

Experian was founded in 1996 and is headquartered in Dublin. It is one of the “Big Three” credit rating agencies, processing information on over o ...

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5.6 Group-IB

Privately held Group-IB was founded in 2003 in Moscow, but its global HQ is in Singapore. Beyond FRIP services, Group-IB offers threat intelligence, t ...

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5.7 HID Global

HID Global is a subsidiary of ASSA ABLOY Group AB of Stockholm. HID Global’s US headquarters is in Austin, TX. HID Global has IAM solutions, and mak ...

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5.8 IBM

IBM is a global technology and consulting company headquartered in New York. IBM offers a broad range of software solutions and infrastructure, hostin ...

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5.9 ID Dataweb

ID Dataweb was founded in 2011 and is headquartered in Virginia. ID Dataweb is a late-stage startup that was initially backed by venture capital. AXN ...

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5.10 Kaspersky

Kaspersky has been a global cybersecurity innovator for more than two decades, with products in the endpoint and network security areas. Kaspersky is ...

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5.11 Neustar

Neustar is a privately held data analytics company based in Reston, VA, offering both risk and marketing analytics services. They were founded in 1998 ...

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5.12 OneSpan

OneSpan, formerly VASCO, is headquartered in Chicago, IL, US, and has offices in Brussels, Montreal, and Zurich. VASCO was founded in 1991 and has a h ...

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5.13 Outseer (RSA)

RSA is a leading global cybersecurity vendor with products for encryption, IAM, IGA, NDR, and compliance monitoring. RSA was acquired by Symphony Tech ...

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5.14 ThreatMark

ThreatMark was founded in 2015 and is headquartered in Brno, Czechia. The company is in growing startup mode and focused on reducing banking and payme ...

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5.15 Transmit Security

Transmit Security was founded in 2014 and is headquartered in Tel Aviv and Boston. The company is self-funded. Their FRIP platform covers all areas ex ...

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6 Vendors to Watch

Beyond the vendors covered in detail in this Leadership Compass document, we also observe other vendors in the market that we find interesting. Some d ...

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6.1 Acuant

Acuant was founded in 1999 and is headquartered in the Los Angeles area. Acuant offers identity proofing services, including biometric matching agains ...

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6.2 Buguroo

Buguroo was founded in 2010 in Madrid. The company is focused on behavioral biometrics for fraud reduction Their SaaS solution has strong features in ...

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6.3 Deduce

Deduce is a VC-backed startup in the FRIP space, founded in 2019 and headquartered in New York. Deduce leverages experience from creating large scale ...

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6.4 Forter

Forter was founded in 2013 in Tel Aviv. Forter declined to participate fully in this report, but KuppingerCole will monitor Forter and include them in ...

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6.5 Guardian Analytics

Guardian Analytics was founded in 2005 in the Bay Area. Fraud Cockpit & Business Intelligence and Fraud Detection Analytics & Intelligence are their r ...

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6.6 LexisNexis Risk Solutions® - ThreatMetrix ® and Digital Identity Network

LexisNexis Risk Solutions ® leverages digital and physical identity intelligence, machine learning and big data analytics to accelerate risk manageme ...

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6.7 Ravelin

Ravelin is a mid-stage startup that was founded in 2015 in the UK. They provide payments fraud detection and prevention for clients in delivery servic ...

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6.8 TransUnion

TransUnion IDVision is a Fraud Reduction service, which leverages iovation, their Portland, OR based subsidiary launched in 2004. IDVision has FRIP fu ...

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