Fintechs zero in on fraud prevention

SAN FRANCISCO — Fraud risk fintechs are attracting investors as companies lean into the digitization of loan applications, approvals and transactions, and the need for fraud prevention technology grows. Health care and fintech venture investor Oak HC/FT , for example, recognizes that the move toward digitization presents a “very ripe opportunity” for fintechs to focus on providing fraud, risk and regulatory tools for companies that are on the digital path, Chief Executive Patricia Kemp said Thursday at FinovateSpring 2022 . The New England–based investor has $3.3 million in managed assets on its portfolio and is interested in investing in more fraud risk fintechs, she added. The investor has “particular interest in four or five companies in fraud risk identity,” Kemp said, noting that “there’s lots more solutions in and around [fraud] that needs to be delivered.” Auto loan fraud, for one, exceeded $7.7 billion in 2021 , and suspicious fraud activity grew by 260% in the same year, according to the 2022 Auto Fraud Trends Report from artificial intelligence-based risk management provider Point Predictive . The influx of fraud has fintechs under “pressure” to create a barrier between fraudsters and companies who have made the digital shift, Kemp said. [caption id="attachment_62879" align="alignnone" width="2984"] © Can Stock Photo / tlorna[/caption] The following fintechs presented their fraud prevention technologies at FinovateSpring 2022 this week: Hawk:AI The fintech offers payment screening, transaction monitoring and customer risk ratings to flag fraud alerts and end financial crimes at retail banks, payment companies, neobanks and fintechs. Hawk:AI ’s artificial intelligence (AI) anti-money laundering (AML) technology works to detect financial crime and notify lenders of anomalies on their platforms. Based in Germany, the fintech has acquired $10 million in funding over three rounds since its 2018 launch. Identomat AI-driven, identity verification process and know your customer (KYC) fintech Identomat provides remote onboarding, accepts and verifies online credit applications, offers age verification and prevents identity fraud while boosting compliance. The Illinois-based fintech was founded in 2019 and has raised $3.2 million during its seed funding phase, according to Crunchbase data. Illuma Illuma offers voice authentication and fraud prevention to credit union contact centers to improve customer experience, reduce call-handling times and increase account security. Its voice authentication technology works behind the scenes during a phone call to validate the caller’s identity. TruWest Credit Union , Connexus Credit Unio n, and The Veridian Group Inc. are among the credit unions that have integrated the technology. The Texas-based fintech is in a corporate round of funding and has between $1 million and $10 million in capital, according to Crunchbase. Incognia Incognia leverages location data technology to increase security and reduce fraud and friction while protecting user data through its privacy-first strategy. The Palo Alto, Calif.-based fintech uses its location technology through company mobile apps to provide user ID verification, background authentication and fraud detection. Neuro-ID The Montana-based fintech allows lenders to view applicant identity more clearly through the interpretation of real-time digital body language, including emotion, hesitancy, state of mind, intention and confidence level through online behavior monitoring without collecting personally identifiable information. Neuro-ID is installed behind existing online platforms and complements processes that are already established. The technology is intended to address fraud and strengthen internal decision engines and risk models. Neuro-ID has raised $42 million, including $35 million from its latest round of Series B funding. The 23rd annual Big Wheels Auto Finance Data 2022 report is now available, providing exclusive statistics on the auto lending and leasing industry and a ranking of the top 200 auto financiers in the nation. Order your report .

Fintechs zero in on fraud prevention

FinovateSpring 2022

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