Early Warning, the cooperative owned by five of the largest U.S. banks that provides risk management services to financial institutions and payment companies, announced their plans to acquire mobile-based authentication provider Authentify on April 7th while terms of the acquisition were not disclosed.
Early Warning is collectively owned by Bank of America, BB&T, Capital One, JPMorgan Chase and Wells Fargo banks. They specialize in helping financial institutions and other organizations assess fraud and bad debt risks with bank account based transactions. Their network of over 1,100 financial institutions and other organizations provides a community of consumer and payment data that can be used to authenticate information a consumer provides, detect fraud and assess the risk of an overdraft.
Authentify, which provides multi-factor authentication services primarily centered on mobile devices, was a natural fit for Early Warning as they have many financial institution clients that are increasingly seeing more account openings, other good business and fraud occur via mobile banking. Authentify provides services that are often used for performing additional authentication with online and mobile banking access, or even used to replace the use of username and password logins.
Authentify focuses on providing 2-factor authentication, identity access management as well as protection against man-in-the-middle attacks. Authentify xFA is their flagship product, which provides financial institutions with a flexible way of performing multi-factor authentication via the consumer’s mobile device. Consumers can complete the authentication step by taking a picture of a QR code on the organization’s web page from their confirmed mobile device, via voice biometric verification, fingerprint readers on their mobile device, or by using their swipe pattern similar to those used for unlocking mobile devices.
Following Early Warning’s planned acquisition of Authentify and their $10 million equity investment in Payfone in 2013, the organization is well positioned to assist financial institution clients operating in the eCommerce and mobile channels. Early Warning indicated these investments would complement their identity and payment solutions, offering an authentication solution suite that will leverage biometric and behavioral authentication to strengthen authentication events.
As both organizations are privately held, financial terms of the agreement did not require disclosure. Neither party revealed the value of the acquisition or when the deal is expected to close.
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