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What’s so cool about fraud prevention? A lot, apparently. While being cool is not one of our business priorities, it certainly is a badge of honor we wear proudly. And now, we’re thrilled that the folks at MinneInno agree that our work, our people and our office (not to mention a random pirate who posed with us at a St. Paul Saints game) are super cool.

What makes us the coolest? There’s the requisite “cool-office” amenities, like a brand-new rooftop deck, complete with seating and a grill for raucous office luncheons or happy hours. But coolness isn’t about the visible trappings for ID Insight: it’s a reflection of the way we approach every challenge with creativity, collaboration and (of course) cool.

The coolness starts with our recruiting process, which is designed to cast a wide net for talent and champion workplace persity, and runs throughout our entire company culture. With such a tightly-knit team, it’s essential for everyone to care deeply about the company’s work, customers and each-other. That’s why we foster mutual respect and collaboration every day by constantly seeking team feedback and engagement.

Recognition also makes us cool, especially when we’ve got our very own “MacGyver Award,” a coveted framed photo of Minnesota’s own Richard Dean Anderson a.k.a TV’s MacGyver, a trained scientist who worked as a secret agent to solve life and death situations. The award is given to a different employee every quarter who exhibits ingenuity and resourcefulness to solve a critical business problem. We may take our work seriously, but our team never takes itself too seriously.

Coolness comes in many forms, and while ID Insight has the standard accoutrements of cool on the surface, it also permeates every piece of our business. We’re cool because of what we do, not just because we’ve got bike parking in the office.

We’re looking forward to celebrating with other nominees on Sept. 13 and angling for a spot as a category winner. In the meantime, please cast your ballot for ID Insight in the MinneInno Coolest Companies reader’s choice poll. And don’t forget to stay cool!

Wow! On January 3 of this year, ID Insight celebrated its 15-year anniversary. Fifteen years ago, identity theft was not quite front-page news, the U.S. had not yet invaded Iraq and President Bush was just completing his second year in office.

I was in my mid-thirties and embarking on a journey that I could never have imagined. Through the first 13 years of my career, I followed the corporate route, progressing from a computer programmer to a data scientist (before we called it that) to running an information-based analytics business. While I enjoyed that period of my career, by 2002 I was ready for a change. I had always wanted to start my own business and the need to scratch that entrepreneurial itch was growing. I didn’t realize how badly I wanted to scratch that itch.
People told me I was crazy; in hindsight, I think they were right.

Over the next few weeks and months, an idea took shape: creating a fraud detection engine that could stop identity theft in its tracks. On January 3, 2003, ID Insight incorporated with a few bucks in the bank and an optimism that we were on to the right thing.

During the next two years, it was the proverbial “two guys in a garage,” building ID Insight by day and consulting by night, all the while trying to convince somebody, anybody to buy the solution we were selling. We had a blueprint for how to build the engine, but the engine was just that – a blueprint.

Those early days were both exciting and maddening – extreme optimism countered with a realization that I still had to pay the bills. I had never felt that vulnerable and exposed – yet never so excited and happy with my work life.

Whether it was divine intervention or just persistence, we finally got a prospective customer to say “yes” in late 2005. They bought our blueprint! While this was terribly exciting, they said it needed to be up and running in six weeks. We had no idea how to do that, nor did we have the money to do it. Thankfully, with help from our technology partners and sacrifices from all of us, we pulled it together and somehow brought our first satisfied customer aboard.

This created a new problem. Now that we had our first large customer, we needed capital to build a data center. Never having raised capital before, I remember asking people “how do you raise money.” The response I got was “just start calling everyone you know.” Over the next few weeks and months, we had raised enough capital to fund the data center expense as well as hire our first employees.

Things progressed, albeit slowly, until 2007 when the FACTA Red Flag mandate was finally published. The new FACTA regulations required financial institutions to screen address changes and new account address discrepancies for the likelihood of identity theft. That was it! This is what we had invented; this was our patent. Our special sauce. With this news that our solution would be mandated by November 1, 2008, the window was now wide open.

We needed to get the word on the street. ID Insight was the company that invented the technology to optimize the screening of address changes and address discrepancies. To do this, we would have to raise capital again. We went back to the well and raised a second round of capital. Per our plan, we quickly built the team to run for the finish line. The only problem was (hindsight 20/20) we only had 12 months to do it. So we began to sprint.

Over those next 12 months, we went from a handful of clients to over 300. While we were happy to add all of these clients, they were mostly smaller institutions that did not generate a lot of volume. I vividly remember November 1, 2008 – two things happened almost simultaneously around that date. First – all financial institutions had carved out their FACTA plans and on that day – our sales “flat-lined” as all financial institutions had made their plans. Second – there was this pesky thing called the “economic collapse.” I remember calling on prospective customers only to be told “Adam – we will be lucky to have the doors open at the bank over the next few months.”

By 2010, this “never say die” attitude and culture resulted in establishing our base. We had become a battle-tested group of fighters that believed they could withstand any storm and anything thrown their way. We had pulled every rabbit out of every hat. We had created new ideas that brought in revenue. And now, financial institutions were coming out of the economic collapse of 2007-2008. They were spending money again and realizing that our solutions were needed to stamp out identity theft.

Over the next seven years, we began to grow and expand our solutions and customer base. Suddenly, we were finding success in other markets such as e-commerce, health care and mortgages. Today, we are serving more than 2,500 customers and recognized as a leader in identity theft detections solutions – especially in the retail banking industry. We serve customers ranging from the top five banks in the country to one-branch credit unions in some of the smallest towns in America.

What I am most proud of is our employees, our shareholders and our board members. While we faced our share of adversity over the years, no one ever lost hope and never stopped believing. We never gave up. We all hung in there and kept on fighting. We are still innovating and still fighting!
I do believe in the adage that “what doesn’t kill you makes you stronger.” That persistence and the culture that has emerged continues to impress me. It makes me realize how fortunate we all are to have been a part of this great experiment.

As Ralph Waldo Emerson once famously said “it’s not about the destination – it’s about the journey.” And what a journey it’s been – here’s to the next 15 years!

Adam Elliott, President and Co-founder of ID Insight, explains how account takeover has evolved in the digital age and what credit unions can do to protect themselves. Read the full Credit Union Times article.

ID Insight’s Sudheer Prem is featured in TechdotMN’s monthly interview of Minnesota chief techies. To get up close and personal with Sudheer, read the full interview: Meet A Minnesota CTO: Sudheer Prem, ID Insight

New enhancements protect phone and digital communications channels

Anti-fraud technology leader ID Insight today announced the most comprehensive update yet to its fraud prevention platform, responding to the industry’s need for a more robust solution for verifying identity profile changes in an increasingly complex, multi-layered fraud environment.

ID Insight’s new solution will help a wide range of financial institutions reduce fraud losses and improve compliance processes while achieving a more than 10-to-1 return-on-investment ratio through more efficient customer profile-change verification processes. The company, which maintains the largest proprietary database of financial service customers’ address changes, is countering a shift in financial fraud that exploits non-monetary setup events – such as phone and email changes – as a precursor for account takeover.

“ID Insight started more than 13 years ago to fill a specific market need: fraud prevention related to address changes,” said Adam Elliott, founder and president of ID Insight. “As the illicit business of financial fraud continues to evolve, so have our solutions.”

The shifting fraud landscape and a specific customer need for better intelligence about phone number changes inspired ID Insight’s latest platform expansion. An ID Insight customer – and one of the country’s largest financial institutions – reported a sharp rise in account takeover cases where fraudsters first changed a customer’s phone number before requesting a large ACH transfer. When the bank called to approve the transfer, the identity thief answered the call, posed as the legitimate customer, and falsely verified the request. In response to this scheme, ID Insight leveraged its extensive profile-change database to tailor a solution that also included phone, email and IP address verification.

“Our customer’s urgent need reflects how account profile information beyond addresses are all emerging as setup events for account takeover,” Elliott said. “Without a solution for fraud identification for all pieces of customer information, financial institutions may be unwittingly sending account verification details and fraud alerts directly to criminals.”

With the rise of mobile banking, online account opening and mobile wallet technologies, mobile phones and computers are vital communications channels for both customers and financial institutions. Having controls in place to ensure that phone numbers, email and IP addresses in the customer profile actually belong to the legitimate customer is critical to reducing fraud risk.

Despite advancements in point-of-sale transaction security, financial institutions are more vulnerable to fraud than ever before. Data breaches have made consumer identity data available in bulk on the black market, exposing more and more customers to account takeover and leaving banks open to fraud losses. ID Insight’s expanded solution helps defend against these attacks by using data and analytics to separate fraudulent profile changes from legitimate customer activity, while significantly improving fraud detection rates.

The updated solution also allows customers to accept data via a flexible API, run the data through a configurable flow based on risk, business process and cost requirement, and return results that the client can act upon for fraud investigation and compliance. ID insight solutions are also easily accessible through many of the nation’s core banking platforms.

ID Insight’s Adam Elliott provides his expert opinion in an InformationWeek article titled ‘8 Reasons To Consider Insights-As-A-Service.’ In his interview with Lisa Morgan, Elliott asserted, “There’s so much changing with security, regulation, and compliance you need more than a shrink-wrapped data engine.” He also highlighted that ID Insight refers to its offering as “Decision-as-a-Service.”

Read the full article here.