Charlie Kroll, CEO of Andera Inc., began his company out of his Brown University dorm room in 2000 as a Web-development firm.
The company eventually found its footing specializing in online customer-acquisition software for financial institutions and recently signed on its 500th customer.
The firm is now broadening its product suite with new fraud-detection software, helping banks with their online marketing, and expanding the kinds of accounts its customer-acquisition software can be used for.
Kroll says the real-time fraud-detection software, FortiFi, is the first of its kind and is stirring up a lot of interest. FortiFi prevents 99.5 percent of online account-opening fraud, the company says, noting that the average instance of fraud costs banks an average of $20,000 and can range to over $100,000.
Kroll recently spoke with Providence Business News about the company’s plans and the new software.
PBN: You mentioned at Providence Geeks in April that Andera had two choices: focus on extending its customer-acquisition product or creating new ones. Tell us how you made your choice. PBN: What’s next for Andera? PBN: You’ve hired 25 people since December. Will you continue hiring? PBN: Was it easy to fill those positions in Providence? PBN: Can you give me an “under the hood” look at FortiFi? What’s the technology behind it? PBN: Do banks not have an effective fraud-prevention system in place already? PBN: At an average cost of $20,000 per fraud instance, banks must be perking up at the idea of real-time protection.
KROLL: If you think about what a bank has to do when it signs up a customer – opening the account is only one of those things. They have to really understand a whole variety of different practices – for instance, they have to understand advertising and marketing; they have to understand optimization and analytics; fraud prevention; profitability… there’s a whole discipline around customer acquisition and what we noticed by doing this is that many of our clients are not that good at it. But there are some who are very good at it.
So what we’ve done is look at the best success stories in our customer base and then tried to package up those different aspects into the set of solutions that all of our customers can buy and we would manage for them.
KROLL: There are a few main directions that we are pursuing to get a broader suite. One of them is fraud prevention – the FortiFi product – the second one is extending from [focusing on customer acquisition for deposit accounts] to focusing more generically on all the accounts that a bank would offer, including loans.
Loans is a new direction that we’re going in this summer. We’re already out – it’s a little bit behind FortiFi – we’re actually already working with some pilot customers.
That system will support not just deposit accounts but also loans and commercial accounts and just a broader variety of account types.
The third area where we’re working on is improving application volume through online marketing. That program is called iCap or [the] integrated customer-acquisition program.
KROLL: We’re 85 right now; we’ll certainly slow down the pace of hiring [but] we’re hiring across the company, in Providence and Russia [where the firm has a small development office].
KROLL: No, they were very hard [to fill]. We have a very high bar here so I think we made it even harder on ourselves.
I get this question a lot – is it hard to hire in Rhode Island? And the answer is absolutely – it’s very hard but, you know, I have friends that run companies in Cambridge and it’s hard for them too but in a different way – it’s more competitive.
KROLL: The thing that I think is interesting about the technology of FortiFi is that it’s based on the network of 500 different financial institutions and the data about the customers.
Without going into too much detail about the technology … the nice thing about this is fraudsters are always changing their tactics and we built the system to be smart and to try to be one step ahead of them without us having to change configurations. The system will actually respond to changing patterns on its own and stay one step ahead.
KROLL: There are plenty of different fraud-prevention systems on the market right now but ours is actually a little bit different from all the rest.
The simple way to understand this is that before it was so easy to open accounts online … a lot of banks signed up for fraud services where they would wait until they experience the fraud and then they would contribute the data about that fraud to a centralized database. … That [system] worked really well when the process of opening an account was slow and manual. … We’ve now made it so easy to open an account [that] fraudsters can open up [lots of] accounts in one day. … We’re monitoring in real time the new account activity across 500 banks. If an identity is misused [at several banks] we see that as it is happening and we stop it before it gets very far.
KROLL: There is a huge amount of interest in this and my expectation is we’re going to have pretty rapid adoption.
We’re at a big inflection point. We’re going from a company that was focused on a single product to a company focused on a broader suite of products. •
