Business Monday

Tech company Easy Solutions out to stop financial fraudsters in their tracks

Company founder and CEO Ricardo Villadiego at Easy Solutions’ global headquarters in Doral on Nov. 4.
Company founder and CEO Ricardo Villadiego at Easy Solutions’ global headquarters in Doral on Nov. 4.

Inside its Doral headquarters, fraud-fighting tech company Easy Solutions has deployed another weapon against the bad guys: The Rock, its new Anti–Fraud Response Operation Center.

Anyone who has ever been duped by one of the official looking emails seemingly from a big bank or well-known company asking for personal information knows at least one of the many schemes that Easy Solutions’ fraud and threat intelligence team inside the Rock obliterate. Rogue mobile apps are another. The center, which opened a few months ago and works together with the company’s existing center in Bogotá, is part of the company’s comprehensive solution to fight fraud.

“Alcatraz used to be called the Rock, a high security facility with little chance for escape. We like to tell customers attacks don’t stand a chance against our Rock,” said Ricardo Villadiego, founder and CEO of Easy Solutions.

Easy Solutions provides around-the-clock proactive detection, analysis, mitigation and shutdown of sophisticated fraud-related cyber-attacks from around the globe for more than 280 financial institutions and other companies.

Easy Solutions provides around-the-clock proactive detection, analysis, mitigation and shutdown of sophisticated fraud-related cyber-attacks from around the globe for more than 280 financial institutions and other companies.

“We put together a strategy that aims to help financial institutions fight fraud attacks all along the evolution of a fraud cycle,” Villadiego explained. That means stopping fraud in the early stages — when criminals are planning the attacks, stealing credit card numbers and launching phishing attacks against a brand — as well as at the end stage when criminals are attempting to convert stolen personal information into transactions — in other words, when they are trying to steal the money.

At the end stage, Easy Solutions’ proprietary technology will identify transactions that deviate from the known activity of users and stop the fraudulent transactions in their tracks, Villadiego said.

The near-daily reports in the media about yet another security breach or attack seem to confirm the need for such solutions. MarketsandMarkets expects the global fraud detection and prevention market to grow from $9.62 billion in 2014 to $21.4 billion by 2019, at an average annual growth rate of 17.4 percent.

Villadiego, who is Colombian, founded Easy Solutions in 2007, and his small team in Bogotá had the big dream of building a global electronic fraud protection company. Before starting the company, Villadiego worked for Internet Security Systems, a cyber-security company that had grown to $300 million in annual revenue and was acquired by IBM. Before that, he worked at Unisys. “I got the inspiration for building something global from those companies but I also love the entrepreneurial environment of a startup,” said Villadiego in an interview in Easy Solutions’ Doral office.

Back then, Villadiego said, other anti-fraud companies were focusing on the transactional stage, and Easy Solutions’ strategy was to be a one-stop-shop for fraud protection. In 2010, the Easy Solutions team received its first round of startup financing — $2.2 million from a Latin American VC firm. “That money gave us the gas to build what we call today the Total Fraud Protection Platform and acquire our first 65 customers in Latin America,” Villadiego said.

But the U.S. market represented a much bigger opportunity. For instance, Aite Group estimated that in 2014 fraud against payment providers in the U.S. cost an estimated $8.6 billion — and the research and advisory firm believes that’s slated to rise, a tab community financial institutions cannot afford to pick up.

“With 7,000 banks, 10,000 credit unions, plus insurance, airlines, healthcare, they are all bigger here,” Villadiego said of the U.S. market. “We are doing what we need to do to make sure we capitalize on this opportunity.”

In 2012, Easy Solutions began seeking out growth capital in the U.S. venture capital market, and Villadiego met with Miami tech entrepreneur and investor Manny Medina and his Medina Capital team. By then, Easy Solutions had grown to about 100 customers, mainly in Latin America. Medina Capital invested $11 million in Series B financing in early 2013 to fund Easy Solutions’ expansion.

Since then, Easy Solutions has more than doubled revenues and nearly tripled its customer base to 280 financial institutions and businesses serving 75 million end users worldwide, Villadiego said. Today, Easy Solutions has about 170 employees among its offices in Bogotá (its biggest operation with more than 100 employees, most of which are in research and development), Doral, Atlanta, London and Tokyo.

“My investors are excited because I tell them fraud protection creates a perpetual business, and it is because the bad guys also have a perpetual business. They come back with a new attack. We are always researching new methods they are using and come back with new weapons to protect our financial institutions,” Villadiego said. “You have to implement a fraud protection strategy that is flexible and allows you to evolve because that is what the bad guys are doing — they are evolving all the time.”

You have to implement a fraud protection strategy that is flexible and allows you to evolve because that is what the bad guys are doing — they are evolving all the time.

Ricardo Villadiego, CEO of Easy Solutions

Growth is accelerating, too: In the first half of this year, the company said it doubled its overall bookings over the same period of 2014. In the all-important U.S. market, bookings hit an all-time-high, up 257 percent from the same period the year before, Villadiego said.

“When we met Easy Solutions, they already had many of the prestigious banks throughout Latin America as customers. Easy Solutions was providing real value to these customers and we felt that was a great foundation for the company’s future,” said Nelson Fonseca, the partner at Medina Capital who works most closely with the company.

Fonseca said Medina Capital invested in Easy Solutions to help grow the company in the U.S. and Europe and believed Miami was the logical place for this expansion.

Since then, Easy Solutions has signed multiple U.S., European and Asian banks, Fonseca said. “They have achieved this success through maintaining great customer service while continuing to innovate the technology that is the foundation of their solutions. The biggest challenge for any company experiencing rapid growth is to attract the best available talent and to maintain its focus on solving customer problems. Medina Capital has helped Easy Solutions attract and maintain the best team in the industry and stay ahead of the competition.”

City National Bank of Florida has been an Easy Solutions’ customer since March 2014, said Marshall Martin, co-general counsel of City National who has been part of this industry for more than 20 years as a regulator, bank examiner, attorney or risk executive.

“They monitor the use of the City National name and the establishment of fraudulent sites. They bring down phishing and pharming sites literally within moments,” Martin said. “Not only does it protect City National’s reputation but it protects our clients that could be duped into potentially putting account numbers and sign-ons into these fraudulent sites. They do this for us 24 hours a day.”

Martin said Easy Solutions offered attractive pricing, but the real reason City National signed on as a customer was the company’s willingness to customize. “It wasn’t that they were just going to give us a box solution and what you get is what you get. We’ve helped them develop and modify products... You have a true partnership — that’s something you don’t get with the bigger players.”

To be sure, it’s a tough market to break into for a smaller player competing against the likes of NICE Actimize and other companies. That’s because banks want to work with well-established companies that bigger banks are already using, Martin said.

“That’s the reality,” he said. “But while Easy Solutions has services that are clearly targeted at the financial arena, the company has services that any business can use, such as where they are looking constantly at the threat landscape, protecting from corporate account takeovers and making sure there are not rogue mobile apps or websites. Think about it, what business can’t benefit from that service?”

Indeed, although the solutions were primarily developed for financial institutions, about 16 percent of Easy Solutions business comes from companies in e-commerce, insurance, healthcare, and other industries, Villadiego said.

Back inside the glassed-in room called the Rock, Villadiego and Michael Lopez, Easy Solutions’ director of operations for the U.S. and Canada, give the Miami Herald a tour. At this time, the Easy Solutions team was fighting about three phishing attacks, rather sophisticated ones, launched against their customers, said Lopez. The fraud intelligence team was also monitoring for fraudulent activity associated with social media or unauthorized applications. When someone is copying a website, “the technology will identify them and we will get them removed,” Lopez said.

The Bogotá office also has a fully staffed Rock, and both centers see, monitor and can act on the same information around the clock. That way in the case of a natural disaster in one location, anti-fraud operations will continue uninterrupted.

All of this is about winning battles for their customers, because when the bad guys are thwarted at one bank they will try another one, said Villadiego. “It’s crazy out there.”

Nancy Dahlberg; 305-376-3595; @ndahlberg

Easy Solutions

Business: Easy Solutions’ products protect against phishing, pharming, malware, Man-in-the-Middle and Man-in-the-Browser attacks, and deliver multifactor authentication and transaction anomaly detection.

Year founded: 2007

Headquarters: Doral, with offices in Bogota, Atlanta, London and Tokyo.

Founder and CEO: Ricardo Villadiego

No. of employees: 170

No. of customers: More than 280; mainly financial institutions but also insurance firms, e-commerce companies, healthcare firms and others.

Primary investor: Miami-based Medina Capital