Fintech startups have been able to move largely against the trend of many other sectors during the global pandemic, as nontraditional payment and banking services are becoming increasingly demanded. More and more people are abandoning their traditional bankers, such as JPMorgan Chase and Allied Irish Banks for contactless payment services such as PayPal, Venmo, Cash App, and many more. However, if there’s any number one rule in the fintech sector, as we’ve seen largely in the race to become the world’s cryptocurrency epicenter, is that security and safety are always the number one priorities. To aid in this effort, fintech startup Feedzai was founded in order “to protect the world’s largest companies from fraud and money laundering”, according to their website www.feedzai.com. On Wednesday, March 24th 2021, Feedzai confirmed that they raised around €170 million from investors and is now valued at more than €840 Million. Investors included companies KKR, Sapphire Ventures, and Citi Ventures.
Feedzai’s flagship service is using machine learning algorithms to detect any sort of possible fraud, money laundering, or any other illegitimate financial activities. In short, machine learning is a way for computers to take observed data and tweak code in order to generate more desired results, largely independent from human contact. This process means that the program is constantly trying to learn and improve its efficacy and efficiency in detecting and preventing these worrisome financial troubles. Feedzai has also released a statement discussing what they plan to do with the money raised, which will accelerate the process of their global expansion and develop new products and services to offer consumers. This comes at a perfect time, as mentioned earlier, the pandemic has led to an increased demand for online financial services. This has in turn subsequently created widespread potential for financial fraud. According to Reuters, “Consumers faced a 650% increase in account takeover scams and a 250% increase in online banking fraud attacks in the last quarter of 2020 compared with a year earlier, based on a Feedzai study.”
Companies such as Feedzai are going to become even more important as more services are transitioned online and into the digital realm, as e-commerce companies are going to desire ways to automate and improve digital financial security. Investors have stated that they see this as not just an investment in the company that they have faith in, but this is an investment in the race to beat those trying to commit massive online crimes.