The increased digitization of global commerce and banking globally — with the expansion of cross-border ecommerce and the adoption mobile banking in the past decade — presents a juicy target for organized criminal groups who only need an Internet connection to make easy money.
Financial fraud prevention is a big business, with the market expected grow 20 percent per year to reach $42.6 billion in size by 2023, according to global consultancy KBV Research.
Within this environment, Israel-based or Israeli-founded companies have quietly built a large and growing presence in the anti-fraud market, with at least 35 companies active in the field, ranging from early-stage startups to post-exit companies that have become divisions in larger multinational corporations.
The Israeli hi-tech scene is well known for producing cutting edge solutions across a variety of industries and verticals. Ecommerce fraud is no different. A number of Israeli startups are pushing the envelope on the machine learning and AI techniques required to fight increasingly sophisticated fraud attacks. From phishing attacks to credit card skimming hacks, there is no type of eCommerce fraud problem these companies aren’t trying to solve.
To date, the 35 Israeli-founded anti-fraud companies have raised over half a billion dollars in venture capital investment and generated $1.5 billion in successful exits, according to data compiled from Crunchbase.
Some examples of Fraud Prevention companies from Israel:
Riskified uses powerful machine-learning algorithms to recognize legitimate customers and keep them moving toward conversion. Using Riskified, merchants can safely approve more orders, expand internationally, and fulfill omnichannel flows while providing a frictionless customer experience.
The company’s patent-pending technology provides early intelligence for upcoming phishing scams (scams in preparation mode), running quadrillions of targeted scans that identify even unknown attack patterns. Once these attacks are identified, and before customers are targeted, Segasec’s solution works to confuse and defuse the attackers, taking down and blocking the compromised assets while deceiving the attackers in order to reduce the risk of exposing customers’ personal information.
Segasec’s solution requires zero onboarding and no integration, so companies can start getting protected immediately.
This approach enables members to make accurate decisions regarding fraud based on a greater number of data points as well as offer a better user experience to their customers. It also provides strong proof of identity by connecting multiple assets such as email, phone number, address, IP address, and funding source at the time of onboarding, first payment, or after indications of account takeover.