The fight against financial fraud has grown increasingly complex as perpetrators continually discover and take advantage of new vulnerabilities using sophisticated tools and technology. In the last five years alone, Visa has invested billions of dollars into technologies that help protect against fraud and enhance the security of our network.
But to protect the entire global payments ecosystem, we can’t do it alone.
Visa acquired Featurespace, a developer of real-time artificial intelligence (AI) that prevents and mitigates payments fraud and financial crime risks. “There's not one solution that solves fraud and financial crime, so bringing together multiple technologies to solve the problem from different angles is the best way to fight the different threats that are targeting consumers worldwide,” said Dave Excell, founder of UK-based Featurespace, which has developed innovative solutions to analyze transaction data and detect even the most elusive fraud cases.
Here, James Mirfin, Visa’s Global Head of Risk & Identity Solutions joins Featurespace CEO Martina King and Excell to discuss how the combined expertise of Visa and Featurespace will strengthen clients’ ability to manage fraud – further protecting consumers and businesses worldwide.
Financial crime is a huge problem facing society. How will this acquisition address the challenges it poses?
Martina King: One of the great things that we've built is an innovative real-time payments protection technology, the power of which can be fully realized when it’s integrated into the payments flow. Since Visa processes a huge number of transactions and has world-class network level models that enable clients to react to fraud trends across the entire Visa network quickly, it makes this a wonderful partnership. Our single focus has, and will continue to be, about ensuring the best possible performance for solving a real-time financial crime problem.
What made Featurespace the right acquisition for Visa, right now?
James Mirfin: Fighting financial crime is being made more and more complex by technology’s evolution. Visa's done a great job of showing what we can do to protect the Visa network and credentials, and Featurespace has done an amazing job of working with clients to help them solve the problem on their end. For us, it's about the combination of what we can do for individual customers, what we can do for the network, and bringing together the power of AI technology to safeguard the ecosystem. There's a human expertise element to this as well. Visa and Featurespace have a unique ability to bring together talented, thoughtful people who build and deploy those capabilities. The timing couldn't be better, quite honestly, in terms of the acquisition.
How will this acquisition enhance Visa’s AI-powered Risk + Identity Solutions portfolio?
Mirfin: Visa has shown what we can do at a network level and increasingly beyond our network with the launch of solutions like Visa Protect for Account-to-Account Payments. We've expanded our suite of solutions, moving from targeting fraud in authorization to fraud in authentication to fraudulent token provisioning and beyond. But we are really excited about Featurespace’s strong and complimentary foundation in AI and ML, which will enhance our existing product portfolio and enable our clients to adapt to and anticipate the changing threat landscape.
How does Featurespace fit into Visa’s value-added services (VAS) strategy?
Mirfin: I think it's core. We've talked about investing in our VAS portfolio, our network of networks strategy and going beyond the Visa credential and this fits squarely into that space. It takes us into a world where we're helping our customers manage risk holistically across their customer's lifecycle, which goes beyond just protecting the Visa transaction.
How will Visa clients benefit?
Dave Excell: A lot of clients manage fraud in silos today, using various tools and technology. Now, we can help Visa clients bring a lot of that capability together and really manage the business centrally rather than through each of those discrete systems. The goal is to provide a simplified management experience that also offers better capability to enable that protection.
How does that help support the whole payments ecosystem?
Excell: I like to use the analogy of water: imagine multiple leaks springing from different holes. Instead of plugging each one individually, we can deploy a comprehensive shield that seals all the leaks at once, effectively stopping fraud from seeping funds out of an organization.
Mirfin: To Dave's point, there's nothing criminals would like better than to think that banks and merchants don't have joined-up systems. The more systems and point solutions they've got, the more gaps it leaves for those criminals to walk through. Having something that is holistic that can help manage the risk across a much broader range of events, that's going to be really important. It is going to help banks lower their total cost of ownership and it's going to give them powerful single platforms to manage risk across their portfolio.
Both Visa and Featurespace use AI/ML to identify and prevent fraud – how will you be able to build on these capabilities as a combined team?
King: It is about speed. As individual organizations, we can only go so far so fast, but by coming together we can enable the industry so much faster.
Mirfin: I think the net beneficiary is going to be our clients. Whether you're a large client or a small client, the combination of Featurespace and Visa is going to make the ecosystem healthier and safer. We're going to do a much better job of driving out all of these fraud losses and reduce the impact of financial crimes.
What excites you most about what comes next, now that we’ve formally closed on the acquisition?
King: One thing that is incredible about Visa is everybody knows that Visa strives to keep their money safe. I have every confidence that with Visa we will be able to continue with those values that we've built, which is all about serving our market. It's just very reassuring that Featurespace has landed in the best possible place in the payments industry.
Mirfin: Two things excite me about this acquisition: One is we've done a really good job of driving down fraud rates and driving up approval rates on the Visa network. I would like to see us make the same headway across other types of payments consistently. The second one is today if you add up what we do between our businesses, we add value to hundreds of billions of transactions a year. I'm looking forward to the point where we actually add value to over a trillion transactions a year. I don't think we're far away from that. When you put that together with reducing fraud and increasing approval rates. That's pretty exciting.
How are the two companies culturally compatible?
Mirfin: There are lots of factors to consider when you look at doing an acquisition. You look at growth, you look at capabilities, you look at technology. But when you actually look at successful acquisitions, one thing that can truly make or break a deal like this is powerful compatibility. It's values, it's vision, it's strategy, it's the way that you do things, not just what you do. Featurespace’s values and Visa's values and leadership principles are so well aligned.
King: When you are bright and you work hard and you can deliver results, you've got a choice of working anywhere in the world. But people who work at Featurespace really love working at Featurespace and people who work at Visa really seem to love working at Visa. It's a win-win-win. It's a win for our team members, it's a win for Visa, and it's a win for the market as well. The bulk of our company is made up of scientists, deeply technical people. The language that we speak is the same language. I found that incredibly reassuring.