Insights From a Cybersecurity and Anti-Fraud Startup
Ransomware. Botnet armies. Cloud server attacks. Phishing.
As digital threats facing businesses and individuals have evolved and expanded, so has the level of specialization among cybersecurity providers. One such specialty is that of e-commerce (electronic commerce) cybersecurity, a service in high demand as fraudsters find increasingly hard-to-detect ways to intercept credit card data.
The recent arrests of several alleged members of a Magecart ring operating out of Asia -- thought to be the first arrests in this form of cybercrime -- show how seriously international law enforcement takes the threat.
Among those working to help businesses stay one step -- or three -- ahead of the criminals is cybersecurity provider NS8, whose technology enables e-commerce merchants to detect potential fraud and minimize risks.
SmartBrief on Cybersecurity recently spoke with Adam Rogas, CEO of NS8, who offered insights into the cyberfraud landscape, the types of businesses that face the highest risks, and why predictive analytics are vital to protecting e-commerce stores and their customers.
In your opinion, what new cybersecurity/anti-fraud technologies should industry players be paying attention to?
AI, machine learning and predictive analytics are technologies that are quickly gaining traction in the cybersecurity space. These real-time, automated technologies allow companies to fight fraud more effectively because they support a proactive strategy that doesn’t need to wait for manual input to adapt.
Reactive fraud strategies are slower and can result in businesses always being a step behind fraudsters instead of several steps ahead. For example, machine-learning models can be trained to detect fraud at the earliest stage possible, preemptively mitigate fraudulent activity, then automatically adjust for scenarios and in real time based on the threat and its context. It’s faster and more streamlined.
Are certain kinds of companies more susceptible to cyberattacks and data breaches than others? Why?
Any connected company can be targeted by a cyberattack, but those that collect and store personal information or facilitate financial transactions are more susceptible to cyberattacks than those that don’t. [Personal] data breaches are lucrative for cybercriminals because the information can be used for identity theft and other types of fraud.
Let’s talk about NS8. Can you tell us a bit about what your company does and what sets you apart from the competition?
NS8 helps merchants (online retailers) defend against online fraud. By utilizing our platform’s behavioral analytics and real-time user scoring, merchants can minimize risk and automate fraud management more effectively by building processes and workflows designed for their unique needs.
What sets us apart from our competitors is that we score actions earlier. We don’t just review payment information and user behavior. We also include pre-session data and identify how users came to the site, which allows for deeper fraud analysis.
Additionally, other fraud solutions require a waiting period to gather data or require extensive development time, but we built our software to be implemented quickly, so merchants can solve fraud issues immediately. And by offering integrations for e-commerce platforms, our solutions are available to small to medium-size businesses, not just enterprise-level companies.
What are the primary types of e-commerce fraud?
Clean fraud, friendly fraud, account takeover, identity theft and triangulation fraud. There are lots of threats in e-commerce, but those are the most prevalent.
Can you tell us about MACH37 and your experience working with them?
The National Capital region has an incredibly dense population of cybersecurity talent. There are more cybersecurity experts there than any other comparable geographic region on the planet. Since MACH37 is based in Northern Virginia, it just made sense for us to launch NS8 there.
At MACH37, we were able validate our technical capabilities by leveraging MACH37’s substantial network of cybersecurity experts. Additionally, the MACH37 program allowed us to align our product strategy with the needs of customers in market segments we believed we could win. Getting to solid product-market fit early has been incredibly critical to our success to date.
In early 2019, you were able to secure $26 million in venture capital funding. How are you allocating those resources now?
The early 2019 funding round (and subsequent capital) is being used to accelerate product development, expand NS8’s global reach through channel distribution and scale our operations in the United States, Europe and Asia. Much of that is being accomplished through the hiring of exceptional talent, which has made the past year a very exciting time for our company.
Since the beginning of 2019, NS8 has essentially quadrupled its staff size to more than 100 people. The majority of funding allocated to personnel has been used to build out our engineering, sales and marketing teams, while making key additions to our executive staff, who are focused on strategic growth and finance. Their work has collectively evolved around enhancing the utility, availability and extensibility of NS8’s services to meet the growing global demand for enterprise-level fraud prevention technology.
You’ve had an extensive career, with time spent at numerous companies across multiple industries such as health care and education. Which role taught you the most about the cybersecurity landscape?
I really started to see the detriment that fraud could have on a business when I was working with a health care-focused marketing company. We spent a significant amount of money and resources on promotion, advertising and trying to reach our customer base, but I kept finding cracks in the system that would allow outsiders to take advantage of this spend.
Seeing a well-capitalized organization have these fundamental risk and fraud issues, I knew there was a better way to prevent and mitigate these types of risk, and this point of view helped shape our approach when we began developing our solution in the cybersecurity space.
Lastly, what was your favorite moment of 2019 for NS8?
For me personally, seeing our employee count increase significantly over the course of the year was probably the most rewarding aspect of 2019. At the beginning of the year, we were still operating with a couple dozen employees. Fast forward to our companywide all-hands meeting in December, when NS8 had over 100 employees from Las Vegas and our other offices tune in. That day really stood out to me that we had made great strides in a relatively short amount of time.
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Sarah Nessel is technology editor at SmartBrief, where she oversees production of digital newsletters focusing on cybersecurity, consumer technology, information technology and software development.
Evan Lauterborn, manager of audience development at SmartBrief, also assisted in this interview process. Connect with him on LinkedIn.