Authentify Is Acquired by Financial Risk Firm

Authentify, a provider of mobile, multifactor authentication services that guard against fraudsters, was quietly acquired last month by Early Warning Services, a provider of risk management solutions. Financial terms were not disclosed.

Founded in 1999, Authentify offers several solutions to 1,200 financial institutions and e-commerce companies; one such product is Authentify xFA SecureCallCenter, designed to protect financial firms from malicious impersonations and guard center representatives from social engineering attacks.

Owned by the top five banks in the U.S.— Wells Fargo, Bank of America, BB&T Corp., JPMorgan Chase, and Capital One—Early Warning shares risk- and fraud-related information to 1,100 clients at financial institutions, government entities, and payment companies. As an example, a bank may want to check with another to see if a check is legitimate and funds will be available.

A few years ago the company created an initiative to broaden its focus from risk to authentication, says Peter Tapling, CEO of Authentify, who says the two firms have shared interests in the past.

"About 60 percent of our business is in financial services," Tapling says. "We have known the Early Warning guys for quite a while."

Tapling says that Early Warning concentrates on what is known as "consortium value," or how any data or decisions are of value not only to the entity that requested them but across all participating organizations in a network.

Part of Authentify's focus, Tapling explains, is the concept of sharing an individual's credentials and being able to use them across multiple applications.

"Our vision of what Authentify can do and Early Warning's vision of reducing loss in the financial services industry through a consortium model are completely aligned," he says.

Will Ferguson, chief corporate development officer at Early Warning Services, says that the banks in its network wanted to expand into the individual consumer space, as that was where the market was headed. "The acquisition of Authentify is the second step of this in terms of having relationships with other organizations," he says.

Ferguson notes that Early Warning previously invested in mobile security solutions provider Payfone, which has relationships with the five top mobile carriers. "We're able to get identity information on mobile phones," he says.

"That all fits together to give us a very rich picture of consumers and their mobile accounts, and now Authentify is bringing authentification factors for digital devices."

With Authentify's technology, Early Warning will provide its customers with digital multifactor authentication on one platform to lower the risk of fraud. The platform will:

  • improve mobile security and reduce consumer friction by leveraging innovation in biometric and behavioral authentication;
  • eliminate the need for usernames and passwords;
  • support the integration, delivery, prioritization, and management of current and future digital authentication technologies enabled by a SDK; and
  • offer a true, persistent identifier that is authenticated in real time, via mobile network operators.

Dan Miller, founder and senior analyst as Opus Research, said he thinks this will be a positive union.

"As firms like Early Warning prepare for the era of continuous access, it is reassuring to see that they are adding a firm that brings out-of-band and biometrics-based authentication," Miller wrote in an email. "It's a very good move by Early Warning."

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