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    What is the best financial fraud detection software?

    Innovative technologies such as artificial intelligence (AI), IoT, and cloud computing are enabling banks, insurance companies, wealth management firms, and other financial institutions to enhance their customer experience, as well as streamline internal processes.

    Innovative technologies such as artificial intelligence (AI), IoT, and cloud computing are enabling banks, insurance companies, wealth management firms, and other financial institutions to enhance their customer experience, as well as streamline internal processes. This is resulting in better client retention, lower operational costs, greater scalability, and increased revenue.
    However, as more financial services undergo digital transformation, the threat of fraudulent activity continues to grow. Cybercriminals are constantly finding new ways to steal sensitive data from companies, like their customers’ credit card information, bank account numbers, or login credentials. And when these cyber attacks are successful, the consequences can be devastating. Financial institutions that fall victim to fraud experience reputational damage, a loss of customer loyalty, and a wide range of legal troubles.
    Without implementing modern financial fraud detection software, your business may face problems that far outweigh the benefits of digital transformation. But there are many different solutions available, so how do you know which one is right for your company? To help you get started with picking a solution, we’ve put together a list of the best financial fraud detection software companies in the world, along with the pros and cons of each.
    But before we get to our list, let’s make sure we fully understand what financial fraud looks like in the digital era, and the various methods for preventing it via cutting-edge tools.

    Common types of financial fraud

    Financial fraud comes in many different shapes and sizes, which is why every business needs a system that aligns with their unique processes, technologies, and industry standards. In most cases, online banks and other digital financial services employ fraud detection software to combat these common cybercriminal activities:
    Credit card fraud: Cybercriminals target unsecure websites to steal credit card information from customers. Then, they use that information to make unauthorized purchases.
    Identity fraud: Using stolen IDs, passports, login credentials, and other private documents, a fraudster will gain access to a customer’s account, then make unwanted purchases under their name.
    Mobile fraud: Mobile fraud involves the theft of customer information from mobile-banking apps. Most commonly, cybercriminals gain access to a customer’s mobile bank account, then deposit phony checks using remote deposit capture (RDC) technology.

    How does financial fraud detection software work?

    Generally speaking, financial fraud detection software uses predictive analytics to identify suspicious activity, which can then be further investigated by risk managers and other personnel.
    Powered by AI, the software is trained to distinguish regular user behavior from potentially fraudulent activity—and these controls can be customized based on the business’ unique services and client base. This allows financial institutions to get in front of cyber attacks before they occur, without expending significant time and resources.
    An advanced financial fraud detection software system should provide the following benefits:
    Confirming user identities: Before a customer can engage with your business’ platform, fraud detection software uses sophisticated algorithms to confirm that the user is who they claim to be.
    Ensuring compliance: Financial institutions must comply with various governmental regulations related to preventing identity theft, money laundering, and other schemes. Modern fraud detection solutions are developed with these standards in mind and are updated frequently, helping businesses to avoid fines and other legal consequences from regulatory entities.
    Protecting customer data: When a customer creates an account with your business, it’s your responsibility to protect their data. Using AI-powered identification and authentication tools to monitor user behavior, risk managers can better prevent fraudsters from gaining access to customer data.

    Best financial fraud detection software solutions

    Again, there’s no one-size-fits-all solution for avoiding cybercriminal activity. And choosing the right financial fraud detection software will depend on your organization’s unique goals and requirements.
    With a digital transformation partner that understands your business, its customers, and the surrounding market, you can find and integrate tools that help prevent cyberattacks and maintain industry compliance—without compromising the customer experience.
    Let’s take a look at some of the best financial fraud detection software solutions available today:


    ThreatMetrix is a popular fraud detection solution among personal finance organizations, insurers, non-profits, and pension companies.
    With access to 78 billion data records, including blacklisted IP addresses, this tool effectively distinguishes legitimate customers from fraudsters. The software also provides intuitive data visualization, so risk managers can get a clear picture of various user activities across their platform.
    One downside of ThreatMetrix, however, is its non-transparent pricing. The monthly or annual cost of this solution will depend entirely on the size and scope of your organization’s cybersecurity needs.


    Developed for enterprise financial institutions, Featurespace uses adaptive behavioral analytics to spot cybercriminal activity—specifically money laundering and identity fraud.
    This software can be installed either on-premise or in the cloud and is considered an end-to-end solution—which means you have to pay for the whole tool, even if you only plan on using certain features.
    For large finance companies that need support complying with strict anti-money laundering (AML) regulations, Featurespace is a great option. Otherwise, it may not be worth committing to an expensive, multi-year contract.


    SEON provides risk managers with a wide range of user data—extracted from IP addresses, emails, phone numbers, and social media profiles—to help them better understand their customers.
    By recognizing suspicious activity early, companies using this software can confidently reject risky customers and bring down their fraud rate over time. This is made possible through a process called “device fingerprinting,” which categorizes users based on their unique IP address, browser history, installed plugins, operating system, and so on.
    SEON also provides transparent pricing, a free demo of the solution, and the ability to cancel your contract at any time. However, this software is not ideal for AML, and cannot be installed on-premise.


    With open machine learning algorithms, Feedzai enables risk managers to create distinct profiles for suspicious accounts, in conjunction with their own data science tools. And with a fully-integrated visualization tool, you can analyze the relationship between certain accounts and cyber attack vectors. This tool is used as a key risk management solution for retail banks.
    Unfortunately, Feedzai is on the more expensive side. And the software is complex—with many different features and capabilities—so the learning curve can be steep, depending on the technical background of your staff.

    Experian Hunter

    Known mainly for its credit scoring products, Experian offers an application screening solution called Experian Hunter —designed to help financial companies detect fraud in its early stages.
    This software leverages Experian’s extensive database, which includes years of aggregated financial data from around the world. The tool is highly flexible, so you can configure it to match your organization’s unique cybersecurity requirements. Many financial institutions—from traditional banks to neobanks—use this tool, as it integrates seamlessly with their other Experian products.
    However, if your business doesn’t use any other Experian products, Hunter may not be the best fit. The pricing is opaque, and you won’t be able to see a quote unless you book a demo with the sales team.

    Implementing the best financial fraud detection software for your business

    As your organization embraces digital transformation to gain a competitive edge, choosing, integrating, and maintaining the best financial fraud detection software should remain a top priority. But finding the right solution and effectively integrating it into your company’s technological ecosystem can be a long and challenging process. That’s where Codal comes in.
    While you focus on running your business, our team will plan and execute a strategy that enhances the customer experience, drives internal efficiencies, and optimizes revenue—all while preventing fraud and maintaining industry compliance. By implementing the right tools and processes, you can sleep better at night knowing that your customers’ private data is secure.
    Codal has over a decade of experience building cutting-edge digital solutions for banks, insurance companies, wealth management firms, and other organizations in the financial sector. For example, our team recently worked with Charles Shwab—a leader in the financial services industry—to transform its outdated web application into a fast, intuitive, and secure platform.
    In our experience working on projects like this, we’ve learned a lot about fraud detection software. And with extensive industry resources and expertise, we know how to provide our clients with the highest value possible when integrating various fraud detection tools, such as the ones discussed above.
    Interested in learning more about how Codal can help your financial organization thrive in the digital space? Reach out to a member of our team today!

    Written by Gibson Toombs