SMB Lending Fraud Being Combatted with Fintech, AI

After almost a month in service, Linear Financial Technologies has seen success with its machine learning fraud detection program, Linear Defense. The technology is used to help prevent fraud in all stages of small business lending.

“Since launching Linear Defense last month, market feedback has been very positive,” said Sandip Nayak, Chief Strategy & AI Officer at Linear Financial Technologies, exclusively to deBanked. “We are actively deploying the solution with our first fintech client and have a second major client, [our] first bank client, preparing to deploy Defense in early 2022.”

According to Nayak, Linear Defense is leading the way in fraud prevention since its release. “We have engaged with a number of banks to test Linear Defense on their customer channels, and the solution has shown it can outperform existing fraud programs in accurately and efficiently detecting fraud.”

Linear Defense gains its predictive power through unsupervised machine learning. The software can be taught to detect fraud in multiple types of financial products and applications, using any combination of first party, third party and alternative data to determine its detection algorithms, according to the company.

​​”Fraud costs the global economy trillions annually, in terms of actual fraud and lost business opportunities from ‘false-positives.’ Now more than ever, financial institutions and other companies delivering financial services products are concerned with the increasing sophistication of fraudsters and are searching for more effective tools to keep up,” said Linear CEO Sam Graziano.

The company claims they have created a simple, lightweight solution that clients consume through an API, seamlessly integrating into their current origination, customer onboarding, or other operating systems.

“Linear Defense is a one-of-a-kind, AI-based fraud platform that surpasses existing market solutions when it comes to detecting financial crimes and fraudulent activity. Using true alternative data and deep learning algorithms, the platform has the unique ability to auto-calibrate to a client’s specific channels and customer population,” said Nayak.

“The solution’s superior predictive power enables clients to reduce the manual touch points required to onboard new customers,” said Nayak. [It’s] creating a better experience for consumers and SMBs, and a more secure process that protects our clients against bad actors.”