BY JON SHADEL
How one Portland startup tracks devices around the world, making the Internet a safer place for businesses and consumers.
Every day, iovation monitors the traffic of 2 billion consumer devices around the world.
BY JON SHADEL
“We’re virtual crime fighters,” says Greg Pierson, CEO and founder of Portland startup iovation. “More specifically, we support thousands of fraud managers who rely on us to stop bad guys.” Pierson, wearing khaki slacks and a tailored sport jacket, appears trendier than a hacker and more relaxed than a sleuth. But his security company, celebrating its tenth anniversary, helps hundreds of clients prevent fraud online.
Behind the scenes, virtual crime fighters at iovation’s headquarters analyze data and monitor online activity. And the numbers reveal the scope of their work. “Each day, we screen 10,000,000 transactions and stop 200,000 fraud attempts,” Pierson says. Unique to iovation is the network of 2 billion consumer devices (computers, tablets, phones, smart TVs and gaming consoles) it tracks around the world. The company uses this data to assess risk for leading brands in a wide range of industries.
The company does not need personal identity information like name or address to assess risk. Rather, iovation relies on what it terms “device reputation”: the online history of associated devices (belonging to the same individual or group of individuals) and the interaction these devices have had with iovation’s clients. Whenever a device interacts with a client online — via account enrollment, purchase, cash withdrawal or login attempt, for example — iovation is able to instantly determine the threat based on the device’s online history.
“We tell our clients who to trust online,” Pierson says. “In 100 milliseconds, we determine what the device is, how it’s related to other devices and whether the collective devices have hurt your business or another business, regardless of geography or industry.” By evaluating a device’s online reputation, iovation determines whether there is relevant negative history for a particular client. For instance, a history of financial fraud would concern a bank; a record of online scams would be a red flag for a dating site.
Companies like online retailers, telcos, financial services, gaming sites and social networks use iovation’s services to implement a wide range of fraud prevention strategies. “We’re essentially an extension of our client’s fraud management team,” Pierson explains. Fraud managers interact with iovation through two tools, ReputationManager 360 and the Fraud Force Community, an online B2B private forum for risk analysts. For clients, both platforms serve as a window into valuable data.
Clients receive an individualized risk score based on rules they set. These rules can include risk indicators like evasion detection (e.g. masking a device’s location to Canada rather than Nigeria), velocity triggers (e.g. too many new accounts created in a certain timeframe) and geolocation (e.g. activity from an unauthorized country). For each one of these risky interactions a device can have with a client, iovation provides a response—allow, deny or review—in real time.
A few clients have found unique ways to manage risk. “Dating sites are probably our most creative clients,” Pierson says. He explains how one leading dating site uses iovation’s tools to identify individuals causing problems. Rather than blocking the account, troublemakers are quarantined to their own server where they can only interact with each other. “When you inform bad guys that you’re onto them, they’ll work to find another way to break the rules,” Pierson explains. “It benefits everyone in the industry when our clients waste their time.”
The company’s 100 employees are driven by the importance of what iovation does for businesses around the world. This sense of duty is one reason the employee turnover is so low. More than 50% have been with the company for more than five years. “Every day, our clients face real, business-threatening problems,” says Pierson. “It’s cool to have a tangible mission like this.”
By enabling companies to stop online fraud, iovation provides an excellent return on investment for its clients—whether preventing millions of dollars in fraudulent purchases or preserving the reputation of a social networking site. And for this reason, the company boasts a 98% customer retention rate.
“We get up each day and fight the good fight,” Pierson concludes. “We help our clients protect their businesses and customers. And that feels good.”
iovation By The Numbers
14 billion protected transactions
2 billion devices tracked
19 million instances of client-reported fraud
10 million transactions scanned each day
200,000 fraudulent transactions stopped each day
3000 fraud analysts using the service
51% net promoter score
5-time honoree, Inc. 5000 fastest growing private companies
