Print
Email
Print Edition Stories
MHT's Jim Connolly: Pink slip parties make a comeback
Terrafugia's flying car simulation
How is the economic crisis affecting tech companies?
The less money you have, the more you have to do to keep thieves from grabbing it.
That appears to be the lesson from Memento Inc., which has seen its business grow as the economy tightens and its banking customers consolidate and shrink. The Concord-based fraud detection software company reports 140 percent revenue growth in 2008, and now counts six of the top 15 U.S. banks as customers.
Accusations of investor fraud against Stanford International Bank and Bernard L. Madoff Investment Securities LLC have commanded front-page ink.
Bank mergers, layoffs, cash-straitened employees and high customer account turnover have provided fertile ground for schemes, and banks are responding, Memento executives say. Scams include everything from simple check fraud to sophisticated identity theft and phishing strategies that reach across multiple channels to siphon out money.
“Typical solutions have been able to hook into a check system, but maybe not other sources of information,” said Paul Whitelam, vice president of product development at Memento. Memento’s software crawls all channels by which customers — or fraudsters — can access funds. The software flags suspicious behavior based on rules set by administrators, or by extraordinary activity, which it identifies using machine learning.
Memento’s cross-channel approach has been one of the things that has differentiated it in the fraud detection market, said Gartner Inc. (NYSE: IT) vice president Avivah Litan, a fraud detection analyst. Solutions that watch only one channel may no longer be adequate, she said.
Memento works exclusively with banks, but in the hands of government regulators, similar fraud detection software might have stopped alleged con man Bernard Madoff from defrauding his investors, Litan said. “Computers are very good at spotting irregularities if they know what to look for,” she said.
Whitelam agreed. “It’s important to look at the patterns of the actual transaction activity that takes place, rather than reading the books where the guy states what he says he’s doing,” he said. “You’re only really going to be able to unearth things like that by letting the data tell the story.”
RSS Feeds
Comments
Please Login/Register to post comments.
No comments have been added or approved.