Socure, the provider of artificial intelligence for digital identity verification, fraud prevention and sanction screening, has signed an agreement to acquire Effectiv, a real-time risk decisioning company, for $136M.
The acquisition is expected to close in November of this year.
This acquisition pairs Socure’s digital identity verification and fraud solutions with a developer-friendly AI orchestration and decisions platform.
Effectiv’s platform integrates any risk solution, including identity and payment fraud controls, credit underwriting, Know Your Business (KYB) and anti-money laundering (AML), to drive “real-time decisions that solve the toughest risk challenges of our time – identity theft, account takeover, scams, and real-time payment fraud.”
With this acquisition, Socure solidifies its position in the identity verification and fraud prevention market, and is propelled into the enterprise fraud industry, which encompasses “payments fraud, credit underwriting, and AML transaction monitoring.”
Effectiv was founded by fintech veterans who built risk platforms for PayPal, Google, and Walmart.
Socure worked closely with the Effectiv founders during their time at Simility, a fraud platform that PayPal acquired for “$120 million in 2018.”
With the experience of having built platforms as their guide, this team designed, architected and built Effectiv for large enterprise scale and complexity from the start, delivering “low latency, high velocity, and complete flexibility.”
The Effectiv team will join Socure, spearheading Socure’s platform product, engineering and data science innovation, as well as “contributing immediately to its enterprise go-to-market strategy.”
A platform strategy is vital for Socure’s growth phase.
This acquisition will enable the company to deepen enterprise partnerships, while also expanding to broadly serve the midmarket.
Effectiv made inroads selling into banks and fintechs, with names like Ouro/Netspend, Lightspeed Commerce, Cardless and Paycor.
Financial services is also where Socure built its early business and with over 1,000 banks and 500+ fintech partnerships, the company “expects to rapidly accelerate Effectiv’s commercial adoption.”
Stolen or compromised identities lie at the “heart of nearly every fraud attack or scam.”
Socure has invested more than a decade in solving what is arguably the most difficult risk challenge in the digital landscape – saying ‘yes’ to more never-before-seen consumers “at onboarding, while simultaneously deterring the most complex fraud attacks, at a tremendous scale.”
Innovation has centered on building a portfolio of verification and fraud solutions that uniquely provide a “360-degree view of identity.”
With AI and more than ten years of data and model training that includes over 3.5B known identities, delivering “certainty in identity is the north star for Socure.”
With the Effectiv platform, Socure will be able to orchestrate and write complex, combinatorial rules “on its own solutions, along with those from third parties, that leverage this 360-degree view of identity.”
This unified approach of identity certainty automates risk and trust decisions beyond onboarding “at login, authentication, payments, account changes, account recovery and regulatory filing from a single platform, with an adaptive, stateful view of the same identity at every touchpoint across the enterprise.”
Effectiv also introduces transaction-level solutions to Socure’s portfolio for the first time, including real-time payments fraud as well as AML transaction monitoring, which both require a platform “built for unprecedented speed, scale and flexibility in analytics.”
Historically, entire companies were built either ‘knowing’ identity or specializing in transaction anomaly detection, but “failed to integrate the two, resulting in a massive financial crime blindspot.”
FinCEN reports that 42% of all suspicious activity related to transaction monitoring is a “result of identity-related exploitations–indicating $212 billion in suspicious activity.”
The Socure-Effectiv integration ends this historical gap, opening the door to combat the most complex fraud, scams and AML challenges with a “unified view of identity certainty, transaction attributes and account validation.”
The platform also enables the ability to develop and import an enterprises’ own machine-learning models to “support unlimited solution configurations inclusive of ingesting custom data – delivering the flexibility necessary to tackle fast-changing fraud attack patterns, and unique customer risk profiling across any industry.”
The Effectiv team has built an ecosystem of 50+ integrated third parties and has worked closely with Socure as one of their “identity and fraud partners.”
This lays the foundation for integration and commercial general availability within the “next 45 days.”
Socure will support their third-party providers while expecting to expand offerings and adding partners to the platform.
As covered, Socure is the AI provider of digital identity verification as well as fraud solutions.
Its predictive analytics platform applies AI and machine learning techniques with online, physical and offline data intelligence to “verify identities and fraudulent transactions in real-time.”
The company has customers across the financial services, government, gaming, healthcare, telecom, insurance, marketplaces, and e-commerce industries.
Organizations including Capital One, Citi, Chime, SoFi, Green Dot, Robinhood, Dave, Gusto, Public, Poshmark, Stash, DraftKings, PrizePicks and the State of California “trust” Socure for identity verification and fraud prevention.