Importance of fraud detection: Interview with Madhu Srinivas, Co-Founder & CEO of Difenz
By Leandra Monteiro
Difenz is a real-time multi-analytical fraud risk management system, powered by AI, ML, and emerging technologies. IBS Intelligence had a chat with the Co-Founder & CEO of Difenz about the importance of fraud detection and prevention in digital banking.
Madhu Srinivas, Co-Founder & CEO of Difenz has 20+ years of experience in Credit and Fraud Risk Management across products in the Banking, FinTech and the Telecom Industry. Expertise in Fraud Risk Control, Investigations, KYC, Onboarding, Underwriting, Compliance, Process Automation. Here are his thoughts on Kick-starting fraud risk management for business:
What is the concept behind Difenz? And what are some of the unique product offerings?
DIFENZ is API for Fraud Risk Management. We are a full stack FRM platform.
Some of our products are:
1) WATCH – Transaction Monitoring API
2) PROFILE – Customer Signups and KYC Validation API’s
3) RESOLVE – Dispute Management and Chargeback Solution API’s
Has Managing and Monitoring Transaction Risk after the Covid – 19 Pandemic become more important?
Around 71% consumers said they are more concerned about scams and fraud because of Covid-19, compared to 47% consumers last year at the onset of the pandemic. Fraud chargebacks stands at $4.8 billion in US, $2.35 billion in India.
India is considered to have a more evolved digital payment ecosystem compared to 25 other countries including the U.K., China and Japan. The digital payments market in India was valued at INR 1,638.49 trillion in FY 2019 and is expected to reach INR 4,323.63 trillion by FY 2024, expanding at a compound annual growth rate (CAGR) of ~22% during the FY 2020 -FY 2024 period.
DIFENZ provides API’s to prevent frauds by identifying suspicious profiles and transactions. Do explain how? Any unique solutions?
We monitor the entire customer journey, from onboarding to transaction monitoring to dispute management. We have inbuilt Rule’s and also have a specific feature called Rule Manager, wherein Clients can instantly create their own rules too. Our ML model takes actions based on transaction patterns. We are on the mission of building a global fraud merchant bureau.
How can small businesses kick-start fraud risk management?
With our super easy API’s, clients can go live with their own risk engine within minutes and protect themselves from fraud losses. Small businesses get notifications through whatsapp, slack, sms or email relating to suspicious transactions and profiles.
Do you have any solutions to help banks prevent digital fraud? Do you work with any banks?
I have spent almost a decade working in Banks managing the fraud risk verticals across products. Prior to Head of Risk at Instamojo and EZETAP, I was with HDFC Bank and managed risk for >10 products during his tenure. My partner, Shiva was with HSBC, HDFC and IDFC banks managing multiple products.
During our tenure at Banks we noticed that 90% of risk activities are done manually. Banks are dependable on their legacy systems, which is just a supporting tool and not a decision-making platform.
Basically, we built these products for ourselves, as a Risk Heads or Bankers. For eg: to implement a new rule in a transaction monitoring system takes minimum 30-60 days but with DIFENZ WATCH it can be done instantly. Also, we have Analyst Performance Management Dashboards which reflects the performance of each analyst who are monitoring the transactions in the platform.
We are in a final level discussion with RBL. We are also in talks with HDFC Bank and Yes Bank. We are majorly targeting CAT B & C banks, neo banks.
What are your growth strategies and plans for the new year?
We are aggressively expanding our Sales Force. We have started hiring head of sales for India and Global markets like Singapore and US. Difenz target customer base includes card issuers, payment processors as well as marketplaces.
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