Deduce Customer Alerts and Identity Insights

Short Summary

Fraud imposes a large and rising cost on businesses, with cybercrime damages projected to reach $10.5 trillion by 2025. While banking and finance remain frequent targets, fraud is increasingly aimed at any online service that exchanges “monetary equivalents,” including insurance, gaming, telecom, healthcare, crypto exchanges, government assistance, travel and hospitality, and real estate. As traditional financial institutions harden defenses, fraudsters shift to targets of opportunity and continually evolve their tactics, techniques, and procedures.

Two dominant fraud categories are Account Takeover (ATO), often driven by breached credentials, credential stuffing, malware-based interception, and remote access tools; and New Account Fraud (NAF)/Account Opening fraud, which leverages stolen or partially assembled personally identifiable information to create synthetic identities for promotions, instant loans, or mule accounts. Core mitigation approaches rely on real-time risk analytics and decisioning, including risk-based MFA informed by credential, device, and behavioral intelligence, plus identity vetting at registration and bot management.

Deduce, a New York startup founded in 2019 and focused on the U.S. market, provides fraud-reduction intelligence via an API, using JavaScript telemetry collection and cloud analysis to return risk recommendations and rationales. Its Deduce Identity Network spans over 150,000 websites, 400 million U.S. identity profiles, and more than 1.2 billion daily activities. Two products sit atop this network: Identity Insights, which enriches fraud platforms with identity and credential context and delivers raw signals, a risk score, and “treatments” (Trust, Challenge, Review, Block); and Customer Alerts, which prompts end users to verify anomalous logins or transactions, feeding real-time confirmation signals back into the network to strengthen detection for all customers.

Interesting Facts

• Cybercrime costs are estimated to reach $10.5 trillion by 2025.
• Account Takeover fraud commonly uses breached passwords and credential stuffing to perform unauthorized transactions.
• Malware and remote access tools obtained via trojans or social engineering are additional methods used in ATO.
• New Account Fraud often uses stolen identities or assembled personal data to create synthetic digital identities.
• Educational, financial, and medical records can be sources of PII used to assemble fraudulent accounts.
• Deduce was founded in 2019 in New York and is backed by Foundry Group and True Ventures.
• The Deduce Identity Network includes over 150,000 participating websites.
• The network contains 400 million U.S. identity profiles.
• Deduce observes more than 1.2 billion daily activities.
• Identity Insights provides four recommended “treatments”: Trust, Challenge, Review, and Block.

Notable Quotes

• “Fraud perpetrators are also continually diversifying and innovating their Tactics, Techniques, and Procedures (TTPs).”
• “Risk-based Multi-Factor Authentication (MFA) can eliminate a substantial portion of ATOs by increasing authentication assurance levels.”
• “Risk-based MFA often evaluates credential intelligence, device intelligence, user behavioral analytics, and behavioral/passive biometrics.”
• “Fraudsters attack any potentially lucrative target of opportunity.”
• “Deduce is an early-stage startup focused on aspects of fraud reduction.”
• “By working with customers in a broad online ecosystem, Deduce is able to collect and examine massive volumes of consumer data.”
• “Integrations of this type feed data back into the Deduce Identity Network providing instantaneous benefit to every other customer, delivering a true Network Effect.”
• “Identity proofing and bot detection are important components of FRIP but can be insufficient at detecting ATO and NAF attempts without enrichment by user identity and credential intelligence.”
• “Identity Insights examines pertinent details of users, devices, and networks in real-time.”
• “Customer Alerts provides a first-party, user-acceptable method for confirming legitimate transactions or blocking them in cases of fraud.”