How neobank Nearside does fraud and compliance reviews with LogicLoop

‍Nearside is a fast-growing fintech company that provides accessible financial and lending products to help small businesses start and grow their businesses. After their Series B raise, rapid business growth was outpacing their ability to monitor fraud in real time.

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Since Nearside's primary product is a business bank account , their compliance and fraud needs are focused on application screening and account monitoring. Upfront screening was required to filter out bad actors, and ongoing monitoring to report and thwart suspicious activity.

Before LogicLoop

Before LogicLoop, tracking and reviewing suspicious activity was very manual. Relevant data needed to be pulled into a single place and cases needed to be tracked by hand. This was not scalable. 

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The VP of Risk at Nearside, Emily Young was looking for a system to manage the alerts that were being created. As a fast-growing startup, they were looking for a few things:

1. Integration speed: they did not want to spend 2-3 months integrating a vendor to write rules and manage cases
2. Engineering lift: they wanted to be able to write and modify rules themselves, even when the data changed
3. Flexibility: they didn’t want to be locked in to data sources, business logic or actions over time

Deciding to use LogicLoop

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Emily’s team was evaluating case management systems like Unit21, Hummingbird, Alloy etc. but wanted more modularity than they offered. Plus, they did not want to spend engineering resources transforming their transaction data to the vendors’ schemas, since that encouraged lock-in. Instead, they decided to build their own case management and write rules with LogicLoop on top of their transaction data. 

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She found that LogicLoop exceeded all her evaluation criteria:

1. Integration speed: it took 2 days of engineering time to integrate with all enterprise security considerations, instead of months vendor softwares were quoting 
2. Engineering lift: once LogicLoop was integrated, risk analysts with SQL knowledge were able to directly connect to transaction data, write rules to flag alerts and trigger cases
3. Flexibility: not only could analysts create cases, they could also auto-approve/reject transactions, reach out to customers automatically etc. 

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With LogicLoop

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Emily’s team wrote rules in LogicLoop for:

• Identity verification failures: data mismatches between vendors and product data, OFAC/PEP compliance, etc. 
• ACH transfers: velocity, excessive declines, recent activity, unusual spikes, etc. 
• Suspicious balances: structuring deposits, consistent negative balances, etc. 

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Once Nearside started writing rules, they realized that having a rule writing interface was only part of the success story. Now that they were over dozen Nearside users on the LogicLoop platform running hundreds of thousands of rule runs a month, they found value in: 

• Meta rules: Combining data from different sources, writing feature tables to databases, understanding rule effectiveness to prune out ineffective rules
• Deduping alerts: Snoozing, prioritizing and deduplicating alerts makes for a less noisy experience 
• Action logs, permissions and version history: Following engineering best practices
• Dashboards: Visually understanding anomalies as an operational guide

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Today, Nearside is a happy customer and is exploring beyond the initial fraud use case in their adoption of LogicLoop: 

• Loan monitors: Besides fraud and compliance, Emily’s team also monitors loan activity to ensure smooth operations
• Customer success and growth: Automate sending customer emails on milestones 

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Using LogicLoop, Nearside has been able to shave several months off engineering roadmaps while iterating towards the best fraud policies 5x faster. Risk analysts and operations are much more empowered as well. Concretely, Nearside has:

• Productionized new lending and banking products faster than ever before – they launched 10+ features in the last six months.  
• Scaled headcount much less than increasing app volume – so they’re getting way more out of each risk and operations hire. 
• Reduced time to review by 75% – providing a better user experience without compromising on risk.  

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