Fighting financial fraud – Innovative software acts like a detective
November 30, 2015— St. John's, Newfoundland and Labrador
Financial fraud has become an escalating challenge for financial institutions worldwide. Three Canadian inventors came up with a solution - software using artificial intelligence and advanced behavior-based analytics to allow banks and credit unions to counter money laundering and stay a step ahead of cutting-edge fraud trends.
Three visionary engineers, Jamie King, Raymond Pretty and Brendan Brothers, founded Verafin in 2003 in St John's, Newfoundland, to help fight financial crime like no other company before. Verafin soon became a leader across North America in enterprise fraud detection and anti-money laundering solutions (FRAML™) for financial institutions.
Leveraging expertise to expand innovation
As recent electrical engineer graduates in their mid-20s, Brothers and his two associates decided to launch Verafin with a very forward-thinking philosophy. Building upon the technology they had used to build robots for the mining industry, they now wanted to tackle the growing problems that fraud and money laundering represented for financial institutions. Realizing that they would require some financial assistance to help expand their research into the FRAML industry, they sought out the support and expertise of the National Research Council of Canada Industrial Research Assistance Program (NRC-IRAP).
NRC-IRAP was the first government program to support Verafin's forwarding-looking philosophy and to share the risk in their innovative development. NRC-IRAP Industrial Technology Advisor (ITA), Bob Robinson, worked with the Verafin team early on in their development, providing them with access to key experts and industry leaders that helped them better understand the needs and functions of the financial and Web sectors.
Since 2003, NRC-IRAP has supported a total of ten projects that enabled Verafin to pursue the development of its revolutionary software. As a result, Verafin experienced significant growth and its workforce is now 30 times greater than in 2013. Moreover, NRC-IRAP played a key role in providing Verafin with strategic/financial advice and technical support.
Brendan Brothers applauds the fact that NRC-IRAP is more geared toward higher risk taking projects than other governmental program.
"When we launched our business we didn't know if it would be successful. Without IRAP's funding, and the critical advisory services that it provided, we wouldn't have been able to develop the prototype of our FRAML software, its applications and its artificial intelligence component. This support from NRC-IRAP has also enabled us to commercialize our product."
Brendan Brothers, Director of Product Marketing, Verafin
Successful software that "thinks" like a person
Using advanced technology, Verafin's software simplifies the difficult task of detecting suspicious financial activities and offers a more cost-effective solution to financial institutions. Just like a detective, the system uses technological techniques, fuzzy logic and customer profiling to find evidence of suspicious transactions. Verafin's unparalleled approach to anti-money laundering and anti-fraud solutions for the finance industry was an industry first.
Today, Verafin has won many awards. It placed 7th overall on Progress Magazine's annual list of Atlantic Canada's Best Places to Work, and the company's CEO and President, Jamie King, was named as one of Atlantic Business Magazine's Top 50 CEOs for 2012. Verafin was chosen as Exporter of the Year by the Government of Newfoundland and Labrador's Department of Innovation, Business and Rural Development in 2012. The company also ranked as one of the fastest growing companies in North America on Deloitte's 2012 Technology Fast 500 list.
According to Brendan Brothers, fraud is a larger problem today than it has ever been. It has become very organized, with gangs operating online, solely with the purpose of compromising online accounts. "A customer in Florida saved over $100,000 recently thanks to our software. Verafin's approach is unique in the world: we bring all the applications designed to counter both fraud and anti-money laundering within one system to tackle credit/debit card fraud, account takeover and cheque fraud."
Verafin is thriving as their FRAML software continues to rise in popularity. From 2007-2011, sales more than tripled. In just 10 years, Verafin has gone from having 3 employees to over 160 and now boasts well over 1000 customers. According to Brothers, the company has plans to continue accelerating its growth and become the dominant fraud-detection and anti-money laundering software provider in North America.
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