Historically, BioCatch has focused on partnering with the world’s largest banks, deploying our behavioral intelligence at institutions with tens of millions of digital logins per day.
But in 2021, we started to think about how we might expand that partnership to include regional banks and credit unions. At a massive global bank, sales cycles and the implementation of our solutions, understandably, both take time. Initially, we looked to the mid-market’s faster sales cycles to build out our customer base.
But during conversations with these mid-market prospects, we soon learned they struggled to combat fraud just as much as the big banks. They also really wanted our help.
Unfortunately, every time we started talking seriously with these prospects about integrating BioCatch, these regional banks and credit unions would inform us they relied on third-party banking platforms to provide digital banking capabilities to their customers and members. This proved true for the majority of the mid-market.
This was a lightbulb moment for us. At the time, we weren’t pre-integrated with any third-party digital banking platform, so we shifted our midmarket strategy to focus on building out partnerships with these digital banking platforms rather than pursuing individual mid-market customers directly.
BioCatch’s first digital banking platform partner
In 2022, we partnered with our first third-party digital banking platform. We believed in our mid-market strategy, but it was still unproven. Would any of the mid-market customers that now had access to our solutions actually have a need for what we were offering?
We learned very quickly the answer was a resounding yes. Fraud was a significant challenge for this cohort of prospects, and there was a huge need in the mid-market for BioCatch’s account takeover (ATO) solution.
That interest and our early success led us to invest further in the partner side of our business to expand our reach deeper into the mid-market. We’ve continued to form strategic partnerships with various third-party platforms, and in 2024, regional banks and credit unions leveraging our fraud-prevention solutions through the Alkami Digital Banking Platform alone stopped a combined more than $54 million in fraud.
Nasdaq Verafin
The mid-market success of the last few years undoubtedly put us on the path to last week’s announcement of our new partnership with Nasdaq Verafin.
Almost as soon as we established our first toehold in the midmarket, we started to hear from customers in the space a.) how much they liked our product (we just published a case study with ORNL Federal Credit Union about how we helped them stop $1 million in fraud in just six months), but also b.) how much they’d love to see our behavioral and device intelligence integrated into Nasdaq Verafin’s fraud-detection dashboard.
The Verafin team heard the same thing. Our joint customers continued to request (from both companies) the ability to send their BioCatch data into the Verafin platform, enabling these institutions to enrich their data and improve their overall fraud strategy.
A partnership was a no-brainer. Verafin works with more than 2,700 community banks and credit unions, and we already shared more than 100 customers in common.
For those mutual customers, BioCatch alerts, scores, and risk insights are now available in the Verafin platform through a connector. This should bring improvements in both effectivity and efficiency. By displaying our combined data in Verafin’s platform, we enhance risk analysis, enabling earlier detection, identifying more sophisticated attacks, and preventing greater losses. It should also reduce the amount of manual labor and reduce admin costs for nimble, overburdened fraud teams at these mid-market institutions, making the Verafin dashboard their single source of truth.
Verafin will also sell, implement, and service midmarket banks who don’t yet work with BioCatch on our behalf, helping us scale to service thousands of customers while not changing the DNA of the company.
The future
Fraudsters don’t discriminate. They don’t care whether an institution has 50 million customers or 35,000, whether it has thousands of brick-and-mortar branches in five different countries or one office in Middle America.
Bad actors utilize the same tactics — increasingly, social engineering victims to willingly transfer away their money — to exploit end customers, no matter where those customers bank.
If anything, the impact of fraud is sometimes more painful for smaller financial institutions than it is for the large ones. Regional banks and credit unions have fewer resources and less money to fight back against increasingly organized, sophisticated, and transnational groups of fraudsters and scammers.
It’s more important than ever that the industry innovate, collaborate, and reconsider how best we can protect consumers.
