Cybersecurity has grown into a top concern for most individuals and organizations. We frequently hear about government and banking systems falling victim to cyberattacks perpetrated by individuals commonly known as ‘hackers.’ It is an issue that every organization faces on a large scale. The frequency of these attacks continues to rise, highlighting the urgent need for a secure cyber environment. Despite the known risk, a significant gap persists.
Fraud.net established itself as a response to the increasing cyber threat. It is a dependable cybersecurity firm dedicated to bridging the cybersecurity gap. Rajeev Yadav, Chief Information Security Officer (CISO) of Fraud.net, shares the company’s journey and specialties, shedding light on the sector and the imperative need for cyber safety. Let’s delve into it!
Fraud.net’s Inception in the Cyber World
In 2015, Whitney Anderson, renowned for his cybercrime expertise in complex financial systems, and Cathy Ross, a seasoned leader with more than 25 years of experience in finance, wealth management, and entrepreneurship, co-founded Fraud.net. While operating several early digital-first enterprises in the late 1990s and 2000s, they encountered many thousands of instances of fraud. Despite an extensive search, they were unable to find a suitable solution, prompting them to create one themselves.
Undeterred, they decided to develop their solution, which would eventually be the genesis of Fraud.net. This fraud prevention platform is cloud-native, comprehensive, modular, and largely automated to assist overworked risk management professionals. Its mission is to stop the majority of fraud in enterprises and safeguard these businesses by harnessing the power of big data and machine learning. Since its inception, Fraud.net has experienced rapid growth and has become the preferred choice for fraud prevention solutions for large and fast-growing companies. The company’s platform employs advanced analytics and machine learning algorithms to analyze vast amounts of data in real-time, aiding businesses in proactively detecting and preventing fraud.
Today, headquartered in the bustling heart of New York City, Fraud.net boasts a team of over 50 experts, including data scientists, developers, and fraud prevention specialists. They serve a diverse clientele spanning financial services, e-commerce, healthcare, and other sectors. Their innovative fraud prevention solutions have earned them multiple awards, solidifying their position as industry leaders.
Range of Cybersecurity Services and Solutions
Fraud.net offers a variety of tools designed for financial institutions, fintechs, banks, and payment processors. These tools cover application fraud detection, real-time transaction monitoring, and a no-code/low-code case management system.
Its product, Transaction AI utilizes advanced machine learning and data analysis techniques to identify suspicious patterns and anomalies within transaction data. It examines factors such as transaction history, location, device, and user behavior. Additionally, it cross-references transactions with a database containing known fraudster profiles and fraudulent activities.
On the other hand, Application AI screens incoming applications for credit cards, loans, and other payment methods. It specializes in detecting synthetic identities by comparing identity elements with a vast dataset comprising billions of data points. Application AI verifies identities, addresses, and behavioral traits, ensuring the approval of legitimate applications while flagging fraudulent ones. Moreover, it serves as a valuable tool for vendor verification, screening both existing and incoming vendors against sanctions lists and known terrorist cells. It also validates their tax identification numbers, safeguarding companies from illegitimate vendor contracts and elevated AML risk.
Fraud.net enhances efficiency with its streamlined case management portal, offering a convenient overview of fraud analytics and flagged cases. This portal simplifies the process of reviewing flagged transactions and provides insights for refining fraud detection rules tailored to unique business needs.
Modern Strategies for Countering Modern Threats
Traditionally, cybersecurity has relied on a fragmented approach, using different security systems for various aspects of a network or application. While functional, this approach tends to create security gaps that can serve as entry points for cybercriminals.
In contrast, Fraud.net adopts a last-mile fusion approach, which is a game-changer. It seamlessly integrates data from various sources, including third-party threat intelligence feeds, user behavior analytics, machine learning algorithms, and the valuable input of human expertise. The result is real-time threat detection and response, along with a comprehensive view of the security landscape.
Moreover, this is where Fraud.net’s proactive stance becomes crucial. The system assumes that hackers have already accessed breached information and are exploiting it against financial institutions and banks. It follows a “follow-the-money” strategy, enabling Fraud.net to thwart these hackers before they can harm their clients. They achieve this through identity proofing, transaction monitoring, and equipping their machine learning and AI tools with data on known fraudsters and their tactics.
Measures to Mitigate High-Alert Risks and Data Breaches
● Reduced Threat Footprint: By relying heavily on serverless technology (98%), the company has shifted its focus away from continuous malware detection and infrastructure patching. Instead, AWS, its service provider, predominantly handles these tasks.
● Extreme Automation: Automation has been at the core of their operations since day one. This approach minimizes human involvement whenever possible, prioritizing scalability and process consistency. Tools such as Infrastructure as Code, AI, and machine learning play integral roles, shaping not only their products but also their internal security services.
● Secure by Design: The company’s code pipeline includes significant bug fixes, creating a system where avoiding these fixes is not an option for the development team. The “shift-left” strategy is not an afterthought but an inherent part of the design.
● Data Segregation by Design: A pivotal strategy the company has adhered to from the outset is ensuring that production data remains within production boundaries, even during testing phases. They employ artificial or fake data in the development and quality assurance environments, enabling thorough validation of models and schemas before automated change controls facilitate their deployment in production environments.
● Compliance: The network and data architecture are constructed with data residency in mind, seamlessly aligning with international data security compliance requirements. Regulations such as GDPR, PCI, HIPAA, and LADMF are integrated into the design, rather than added as an afterthought. This approach enhances trust and facilitates better product and service sales, catering to international customers with diverse compliance and regulatory needs.
● Eating our own dog food: As an AI-centric company specializing in anomaly detection for fraud prevention, they practice what they preach. Similar AI and ML models are implemented internally for their cybersecurity program, ensuring the maintenance of high-quality products and services. This internal application of their expertise further enhances their overall offerings.
Delivering Client Satisfaction through an Adaptive Approach
Fraud.net’s approach revolves around continuous improvement. They begin with a strong foundation and allow it to evolve autonomously, refining risk rules and associated models to meet current and future client requirements effectively. To ensure the satisfaction of their ever-evolving clients, the company places a strong emphasis on building trust through consultation. Initially, they conduct comprehensive consultations with clients to gain a deep understanding of their unique risks and needs. Following this, they tailor their machine learning logic precisely to align with the client’s specific requirements.
The company’s commitment does not stop at customization. They maintain ongoing communication with clients, assisting them in implementing suggestions and gathering feedback for potential improvements. The scope of client requirements is extensive, encompassing product features, regulatory compliance, data protection, privacy, and process considerations.
After capturing all these requirements, they integrate them into their automation engine, which forms the dynamic foundation upon which their system operates. This foundation continually learns and adapts through machine learning, accommodating new requirements and identifying areas for enhancement.
Roadmap in Enhancing Fraud Prevention
At the core of Fraud.net’s mission lies the precise prediction of fraud outcomes and the achievement of greater precision. Building upon their real-time Fraud Detection and Prevention Platform, they aim to refine it further. This involves leveraging a wealth of global intelligence data and continually improving their AI and ML models.
Recognizing the ever-evolving tactics of fraudsters, Fraud.net is committed to staying ahead. Their strategy involves deeper exploration of the Dark Web, vigilant monitoring of financial transactions, and staying informed about modern evasion techniques like bitwashing, cryptocurrencies, and covert channels. Additionally, they are strengthening their connections with regulators and data sources, bridging the gap between business and IT risks. This initiative aims to establish a next-generation Fusion Operation Center.
However, in their pursuit of excellence, they are cautious about potential biases that could inadvertently affect their models. To address this concern, they are actively developing and enhancing AI governance practices.
Looking forward, Fraud.net anticipates the emergence of regulatory frameworks. These frameworks will not only safeguard user privacy but also empower their customers to effectively detect fraud in real-time. It’s a forward-thinking approach that combines technological innovation, collaboration, and a strong commitment to ethics and compliance.
Rajeev Yadav: Visionary Entrepreneur in Cyber Security Sector
As the Chief Information Security Officer, Rajeev performs various crucial functions. He collaborates with a talented team to ensure the security of digital transactions on scale. His responsibilities span different areas, with a central focus on data protection and risk management.
In research and development (R&D), Rajeev applies his expertise to address real-time challenges by implementing robust security measures. He brings a mathematical and logical perspective to solving complex issues, conducting thorough risk assessments, and deploying effective mitigation strategies. Rajeev also bridges the gap between older technologies and newer solutions, creating data consortiums beneficial to consumers and the payment industry.
Nurturing vendor relationships is another vital aspect of Rajeev’s role. He collaborates with top-tier solution providers to offer a comprehensive suite of fraud detection and risk management solutions.
Rajeev remains committed to his core responsibilities as a CISO, including developing and implementing an information security program, ensuring compliance, aligning cybersecurity initiatives with the organization’s broader business objectives, and reporting on cybersecurity matters to senior management. He also plays a vital role in fostering a culture of robust information security and efficiently managing the cybersecurity budget.
Externally, Rajeev establishes and maintains relationships with stakeholders, including customers, partners, regulators, and industry associations. These connections provide valuable insights into the latest security trends and best practices, demonstrating the organization’s commitment to security to both internal and external stakeholders.
Cyber Trends to Monitor
When discussing the latest trends in the cybersecurity industry, Rajeev offered valuable insights into the evolving landscape.
According to Rajeev, one significant trend is the widespread adoption of Hybrid/Remote Work and the Internet of Things (IoT). The COVID-19 pandemic accelerated this shift, creating new attack surfaces for enterprises. Personal devices used for remote work and the increasing use of IoT and networked devices have become vulnerable attack vectors. In response, Rajeev notes the emergence of essential solutions like Secure Service Edge (SSE) and Secure Access Service Edge (SASE) products in the security industry.
Rajeev discusses the fundamental shift brought about by Cloud Computing in how businesses operate. However, he emphasizes the new risks introduced, especially in supply chain and configuration management. The increased use of third-party providers with potentially lower security measures can make them easy targets for cyber attackers. As a result, solutions like Cloud Security Posture Management (CSPM) and Shift-Left security strategies have gained prominence in mitigating these risks during the software development lifecycle.
Another significant trend highlighted by Rajeev is the emergence of Automation and Artificial Intelligence (AI). Security events have become more automated and real-time, thanks to advancements in AI technologies. Tools like ChatGPT and Bard, while facilitating rapid software development for legitimate business needs, also pose challenges in the form of AI-driven malware and ransomware attacks. This necessitates continuous advancements in AI-proof cybersecurity measures.
Rajeev also raises concerns about the monetization of data breaches, leading to the alarming trend of Ransomware. He underscores the seriousness with which the industry takes this risk, as ransomware attacks, identity fraud, and other forms of cybercrime have become lucrative enterprises. Additionally, he points out that emerging payment methods like FedNow, with near-real-time settlement capabilities, further complicate the retrieval of fraudulent funds from the Dark Web. “Hence, automation and AI, while being a boon, are also a curse for many security practitioners, and are part and parcel of the constant cat-and-mouse game,” says Rajeev.
Exploring the Future of Cybersecurity
The future of the cybersecurity sector promises substantial technological changes, and Rajeev is proactive in embracing these transformations. He recognizes the transformative potential of technology and is committed to staying at the forefront of these changes.
As hyperconnectivity at scale and more immersive connectivity become realities, new challenges arise. Currently, the focus is on identity proofing, fraud intelligence, and mitigation. However, upcoming technologies such as facial recognition, the metaverse, hand gestures, and related transaction use cases will introduce both disruptions and opportunities. It’s crucial to address the potential risks associated with these capabilities.
In response to these challenges, efforts are already in progress. The organization is actively working on use cases related to these emerging technologies. This proactive approach ensures their readiness to navigate the changing landscape effectively.
Furthermore, Open Source Intelligence (OSINT) and other data-sharing frameworks are poised for improvement. Emerging technologies and regulations are prompting more firms and enterprises to share vital information. The organization closely collaborates with regulatory bodies to develop and implement new rules. This partnership also involves monitoring activities on the dark web and the increasingly complex covert crypto channels.
The proliferation of Internet of Things (IoT) devices brings with it numerous attack vectors and payment opportunities that require protection. Preparing for this evolving threat landscape is paramount.
Given these innovations and the growing demand for hyperconnectivity, combined with the emergence of national payment platforms like FedNow, which facilitate trillion-dollar intra-day settlements, detecting fraud in real-time amid massive data volumes becomes a significant challenge. To address this challenge effectively, the organization actively partners with platform and network providers, ensuring they are well-equipped to meet evolving demands.
Rajeev’s Strategies for Cybersecurity: Simple Steps to Protect Your Business
He stresses the importance of regularly reviewing and refining risk and governance rules. To protect what matters most—whether it’s data, information, or people—Rajeev recommends starting with a targeted approach and then expanding security measures. He suggests, “Once you feel you have achieved some good visibility and covered decent blast radiuses, then research which tools will best facilitate their improvement execution and which solutions are looking ahead to provide the next part of your roadmap.”
In terms of implementing security measures, Rajeev underscores the utility model. He suggests, “Think of security as a utility and don’t attempt to build solutions that are outside your expertise. Instead, plug into best-of-breed providers for identified and potential risks.” He also cautions against relying on one-size-fits-all solutions, noting that fraudsters exploit complacency. Moreover, Rajeev advises staying at the forefront stating, “You need to strategically be at the tip of the spear, whether in processes or software tools.”
Concerning mitigation, Rajeev recommends avoiding technical debt. He says, “Invest in proven solutions with Long Term Support (LTS) built in.” Drawing a car analogy, he suggests the Toyota 4Runner for long-term security planning or Tesla for a short-term perspective, aligning with the Toyota Production System’s principles of “Jidoka” (full automation with human involvement) and “Just-In-Time” in manufacturing.
Lastly, Rajeev underscores investing in people. He emphasizes the role of well-trained and motivated staff, stating, “Make sure they’re part of your LTS strategies and consider them as family members you care for. This is especially crucial when mitigating insider threats both within and outside your organization.”