Fintech Valley Interview – CashShield – a company profile

FintechValley is proud to present you the third part on our series of Fintech companies’ profiles. We move back to Asia to introduce “CashShield”, a company out of Singapore, which provides fraud prevention services “…designed for sales optimisation” with an “… optimized fraud risk algorithm…programmed to look for positive aspects in transactions, or reasons to accept transactions rather than to reject them.” Further information about CashShield under: http://www.cashshield.com

CashShieldLogo_HorizontalSmall

FintechValley: Could you please give a short description and history about CashShield for those companies and audiences that are not familiar with the company and the products?

CashShield is a real time fraud prevention solution that is designed with big data, machine learning and optimized through a self developed risk management algorithm. It was soft launched in 2013, and has gained traction since then, gaining clients from various industries from telecommunications, gaming and more. Different from traditional fraud prevention solutions, CashShield bears full responsibility of preventing fraud for its merchants, being the first in the world to provide a 100% Chargeback Protection for both physical and digital goods, as well as a fully managed service that does not require merchants to self-configure their risk template.

FTV: What are the Unique Selling Points of CashShield, what value do you bring to your target audience?

There are a few unique selling points that distinguish CashShield from other fraud prevention solutions. Firstly, we are the only solution in the world able to provide a 100% Chargeback Protection for both physical and digital goods. Any unauthorized transaction that is undetected by the system will be automatically refunded to the merchant.

Secondly, CashShield is able to completely eliminate manual reviews, with the entire fraud screening process fully automated. Up to 98% of the incoming transactions are automatically verified and set for instant delivery. Our fully managed service tailors and configures the merchants’ risk templates for them, while providing only two straightforward optimized decisions: accept or reject.

Lastly, our self developed risk management algorithm is designed to view all transactions as a portfolio, and therefore more proactive than other solutions, which are often too risk adverse. The system takes calculated risks to maximize the merchants’ revenue while minimize losses, effectively boosting the business potential for our merchants.

FTV: Where is the CashShield Headquarters? Is there a special reason for settling the company here? Do you have regional offices in other countries?

CashShield is owned by CashRun, which is headquartered in Singapore. Other than the convenience that the founder, Justin Lie, is born and bred in Singapore, Singapore is extremely business friendly, with support infrastructure for developing businesses and startups. At the same time, in recent years there has been a growing e-commerce boom in the APAC region, especially in SEA, and it is definitely strategic to be located in the heart of it.

Since CashShield is a global solution that may be applied to various industries, we have also set up various regional offices in Switzerland, Germany, USA and China.

FTV: What has happened in the last years to the main Financial Corporations to finally adapt new technologies? Do you believe they are reacting quick enough?

In the payments landscape, the most recent major technological advancement is perhaps the global adoption of the EMV chip, which is specifically designed to combat the flaws of the magnetic stripe system on traditional credit and debit cards. The new EMV chip makes it more difficult for fraudsters to forge cards and monetize from stolen credit cards.

While this technological breakthrough has benefitted card present transactions to reduce fraud, it has pushed fraud to shift online towards card not present transactions instead, where fraud syndicates exploit recent major data breaches to collect and monetize the stolen data by launching coordinated fraud attacks on online businesses. In this backdrop, banks, card issuers and payment service providers have instead made policy changes to push the responsibility of preventing fraud back to the merchants, reducing the liability on them.

When we discuss combating online fraud for merchants, fraudsters will always continue to change up their strategies for their illicit activities and develop more and more sophisticated tools to assist them in their fraud attacks. Yet in the question of whether financial corporations are reacting quickly enough, it seems more evident that they are more relatively concerned with ensuring that the liability on them is quickly reduced even as (and if, in future) the fraud landscape changes. Merchants themselves see a gap in the knowledge and expertise available in fighting fraud even as they scramble to react quickly to prevent losses to fraud. Perhaps if financial corporations took back some of the liability, they could have new technologies to alter the card not present fraud landscape on their own terms – just like what they did with the EMV chip.

FTV: In your option, how relevant are the following 5 factors in the success of a Fintech Company. Can you please grade them with a percentage of relevance. (20% for each one of them, for example, would grade all of them as equally important.) Please feel free to add an extra factor that you believe could be important:

Consumer adoption: 15%

Technology: 30%

Marketing budget: 20%

Human talent: 25%

Investors: 10%

FTV: Has it become easier for you to reach Finance corporations and make them hear what you have to say in terms of finance innovation?

CashShield had originally started off as a third party fraud solution helping merchants to prevent online fraud, and therefore has no need to reach financial corporations as we are able to assess transactions solely via the merchant’s website and (if any) available platforms.

Currently, however, CashShield will be productized and designed to suit various industries and for finance corporations as well. Finance corporations themselves are also seeing the problems of data breaches and online fraud, and are looking for means within and outside of the institutions themselves to deal with the situation. Therefore, finance corporations have been interested in what CashShield has to offer. With goodwill, good arguments and good technology, it is not impossible to reach out to finance corporations.

FTV: What is the most important market for CashShield? What are the next plans?

Originally, CashShield was only geared towards e-merchants who were facing fraud issues on their online businesses, and these online merchants will still continue to be the most important market for CashShield. However, as previously mentioned, CashShield will also be undergoing productization, and will be designed to suit various industries and even finance institutions.

In addition, the company will be opening a new branch office in San Francisco, to focus more efforts in launching and promoting CashShield in the Americas.

FTV: In your point of view, when is regulation good for Fintech and when is it bad for Fintech ? Is regulation helping or deterring financial innovation?

There is a common concern that regulation will inevitably stifle innovation, which is the hallmark of Fintech. However, considering that not all Fintech technologies are completely foolproof and do in fact have their own problems and risks for its users, it is important to have some regulation to reduce the risks of potential failures or breaches.

As addressed by the Monetary Authority of Singapore (MAS), regulation should be designed specific to different technologies and based on the different levels of risk that the technologies have. Here, regulation will be proportionate to the risk posed. The MAS’ regulatory sandbox is intended to ensure that Fintech corporations can continue to experiment and innovate, but in a safer environment such that a failed experiment will not be overly costly or with dire consequences.

FTV: Which is the Fintech capital of Asia in your point of view? Why? Is there a recipe or formula for being a successful Fintech capital?

Singapore is definitely the Fintech capital of Asia. Not only has the government strived to make it easy for businesses to be set up in the country, they have also pumped money into grants and policies to assist tech startups and perfecting the support infrastructure for businesses and startups. Moreover, Singapore has long directed its efforts in developing itself as a finance hub, with several finance institutions themselves keen to boost the Fintech sphere as well. It’s hard to say that there is a definitely recipe or formula into having a successful Fintech capital, but at the minimum, the government must take conscious effort to promote the tech startups and provide opportunities, all of which require much energy and money.

FTV: Singapore has innovated tremendously as finance market, what can other Asian capital cities learn from them?

As addressed previously, other Asian capital cities could strive to provide a more business friendly environment to encourage tech startups within the city and provide the necessary support infrastructure and opportunities, rather than simply supporting the larger players.

FTV: Thank you very much to CashShield

More about them under: www.cashshield.com

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