How SMB neobank Nearside fights fraud with LogicLoop

Nearside is hiring! Check out their Careers page here.

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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 fraud needs are focused primarily on application screening and account monitoring. Upfront screening was required to filter out bad actors, and ongoing monitoring to identify suspicious activity.

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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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With growth, the engineering team started maintaining automated risk rules in code. However, the dynamic nature of fraud meant that rules needed to be constantly updated. Adding a new rule or changing a threshold took a lot of resources. Nearside’s VP of Engineering, Brian Delahunty was looking for leverage, so that risk analysts could update rules without involving engineers. This would be key to reducing the pressure and thrash on his organization. 

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Using LogicLoop

The VP of Risk at Nearside, Emily Young started evaluating LogicLoop for her team of risk analysts and operations to write fraud and compliance rules themselves. This way, they could automatically create review cases in their internal case management system without doing it manually or waiting for engineers. 

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A large part of the decision to use LogicLoop was integration speed and flexibility: Emily’s team was able to get integrated in 1-2 weeks, which they considered a welcome change compared to the several months that were being quoted to them by vertical software. Since Nearside was in hypergrowth, they also needed a system that could scale to new data sources and processes. LogicLoop’s modularity made it easy to achieve that. 

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‍Emily’s team wrote rules 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

Results

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.