Sift, LexisNexis Top Digital Fraud Management Forrester Wave – Source: www.govinfosecurity.com

Artificial Intelligence & Machine Learning
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Finance & Banking
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Fraud Management & Cybercrime

Newcomer, Established Vendor Lead Efforts to Stop Fraudulent Payment Transactions

Michael Novinson (MichaelNovinson) •
September 18, 2023    

Established provider LexisNexis Risk Solutions remains atop Forrester’s digital fraud management rankings, while upstart Sift broke into the leaders category for the first time.

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Many providers in the space have expanded from payment transactions to account takeover fraud as well as handling scams, policy abuse and items-not-received fraud, said Forrester Vice President and Principal Analyst Andras Cser. Understanding what’s happening and making accurate decisions is harder than ever as friendly scams and similar scams involve customers who’ve been behaving well up until then.

“They don’t want to spend time on individual stolen card numbers and make payments with those individually stolen card numbers,” Cser told Information Security Media Group. “But instead, they want to log into somebody’s account like another retailer and buy multiple items in one shot. For them, it’s: ‘How can you steal as much money in the shortest period of time?'”

Cser said, the digital fraud management Forrester Wave replaced the risk-based authentication Forrester Wave, which was last released in spring 2020. LexisNexis once again earned the highest rating for strategy. TransUnion and Signifyd received the second and third-highest scores, and Kount and Sift tied for fourth. In 2020, LexisNexis, IBM and TransUnion received the three highest scores, respectively.

“For them, it’s: ‘How can you steal as much money in the shortest period of time?'”



– Andras Cser, vice president and principal analyst, Forrester

LexisNexis also received the highest score from Forrester for its current digital fraud management tool, and Sift, Accertify and Kount got the second-, third- and fourth-highest rankings, respectively. In 2020, IBM and Kount tied for the highest ranking among risk-based authentication offerings, and LexisNexis edged out Appgate for the third-highest score (see: Strategies to Fight New Fraud and Money Laundering Schemes).

Opportunity Around Generative AI, Cryptocurrency

Cser said generative AI hasn’t has much effect on the digital fraud management landscape so far, but in the long run, he anticipates AI technology will allow data scientists and other less-technical personnel to formulate natural language queries. Combining reporting, auditing and chatbots with other types of generative AI could improve rules-based risk queries, according to Cser.

Going forward, he expects providers to double down on tracking and understanding how cryptocurrency payments are linked to both fraud and money laundering, which can be a problem for banks, insurance companies and online marketplaces. Fraud management requires vertical-specific expertise, so customers should consider how much experience providers have in baking, insurance or e-commerce.

“It’s not enough just to have nice and shiny generative AI algorithms,” Cser said. “You really need to have domain-level experts and history.”

Outside of the top two, here’s how Forrester sees the digital fraud management market:

• Strong Performers: Kount, TransUnion, Signifyd, Accertify, Forter, Outseer
• Challenger: Riskified, Experian, Cybersource, Human, Radial, Appgate, Callsign

How the Digital Fraud Management Leaders Climbed Their Way to the Top

LexisNexis Risk Solutions Boosts Platform With ML, M&A

LexisNexis Risk Solutions has enhanced its machine learning configurations and dynamic decision platform to strengthen its rules management and configurability, said Kimberly Sutherland, vice president of fraud and identity. The company offers both rules-based and analytics decision models to give customers flexibility, and they can combine digital risk and physical risk intelligence for a more holistic view, Sutherland said.

Acquisitions of BehavioSec and Emailage have helped the company enhance its authentication risk signals by strengthening risk intelligence around everything from email addresses and behavioral biometrics to digital transactions and e-commerce. Offering the capabilities on a single platform and using a single API model enables companies to quickly incorporate the tools into workflows and policies (see: LexisNexis, Experian, IBM, F5 Top Fraud Reduction Tech).

“One thing that we are very proud of is that we’ve tried to address new account openings, logins and payment transactions for that full customer journey,” Sutherland told ISMG. “We also have a very large and diverse customer base, so we learn a lot from different industries.”

Forrester criticized LexisNexis for lacking chargeback management, lagging others in ROI and general reporting, and having insufficient configurability with AI/ML-based risk scoring. Sutherland said LexisNexis partners for chargeback management, will enhance its reporting and business intelligence tools and is looking for new ways to support midsized customers with limited resources.

“We have extremely good value for the types of fraud that we help prevent,” Sutherland said. “That’s a calculation which we actually determine at the customer level.”

Sift Takes on Workflow Management, Account Takeover

Sift introduced starter workflows to help fraud and security analysts in large enterprises manage new workflows with additional user management capabilities, CEO Kris Nagel told ISMG. The company can now route transactions automatically and prioritize transaction types based on the size of the vector, allowing fraud analysts to work through handling transactions in an automated and simplified way.

Defending against account takeover attacks has been a high-growth area for Sift as ChatGPT and other generative AI platforms contribute to a 427% year-over-year increase in account takeover activity, Nagel said. Sift is the first vendor to apply machine learning at scale to address fraud, which Nagel said has become increasingly democratized as the tools needed to do this become more and more accessible (see: Sift Snags Former Ping Identity COO Kris Nagel as New Leader).

“We are a fraction of LexisNexis’ size, but we are running a huge volume of transactions to the platform,” Nagel said. “I believe our long-term differentiator is the data set, our global network and our machine learning capability.”

Forrester criticized Sift for lagging competitors in scale and technical employee staffing as well as providing insufficient insight into risk-scoring methods. Nagel said Sift is quite proud of the level of innovation the company offers regardless of employee count and is actively working on providing more insight into risk-scoring methods, so that customers can see in the console how transactions are scored.

“Our focus on what we do best is reflected in the kind of the innovation that’s coming out of Sift today,” Nagel said.