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We recognize that brief pause after pressing the enter key on the keyboard or clicking the mouse to make a financial transaction. Somewhere in the background, an algorithm hits the instant risk and the money is either transferred or there are more checks to follow.
The ritual is fast and smooth, without any errors. Little by little the automated process of a bank or insurance company verifying who we are or whether we’re lying about something on an application is coming in. The screen will flash and the workflow will be activated.
Identity verification and fraud detection grease the wheels of ecommerce and have become big business in their own right: billions of transactions are approved or declined each year. Proof of this is in the FTSE 100 index, where this week Relex started as the UK’s fifth most valuable company, ahead of BP. Data really is the new oil.
Relex is an unusual name for the former Reed Elsevier. Adoption Ten years ago. But the x corporate branding firm at Relux isn’t just lip service. He refers to LexisNexis, an online data business that has grown exponentially in size and scope. In the year In 1967, he became the financial guardian of many cell phones by putting Ohio laws online.
of History Relex’s digital transformation is well-known in business journals and scientific publications from Anglo-Dutch. Up on the FTSE 100 is Erik Engström, a low-profile Swedish CEO From 2009. Much of his activity is now online rather than in print, and his repeat subscriptions have paid off loyal investors.
But while the Elsevier name and LexisNexis legal information is known for science, its biggest division does something else entirely. LexisNexis Risk Solutions, as it is loosely called, contributes about 35 percent of revenue and is more than legal operations. “Are you who you say you are?” There is plenty of money to answer that question.
This is usually done quickly and quietly, as devices are scanned and users’ identities and financial statements are run through databases to check for breaches. Occasionally, it appears in public. “We will work with LexisNexis Risk Solutions when we lose contact,” UK insurer Royal London told customers who received an unexpected letter.
Relex Risk Segmentation is not the only provider of identity verification and analytics: from Experian and Verisk Analytics in the US to GB Group in the UK, the list of global competitors is long. But it has grown from its current size through acquisitions that are mostly too small to attract attention, adding more clutter to a data factory run by 3,000 software engineers and artificial intelligence specialists.
US auto insurance is one of the largest markets. Insurers run applications for new policies through the software to match personal identities with state records, bankruptcy court information, driving violations, and more. Much of the information is public, but this is combined with proprietary data and analytics to find personal stories, warts and all, to reduce insurers’ losses.
Relex expanded into banking in 2018 by acquiring ThreatMetrix, a Silicon Valley firm that connects online identities to digital devices and checks for signs that a computer or phone is being used for fraud. The phone may be in a suspicious location or at an unusual height. The user may be hitting the keys more often than the owner creates. All this can be seen from a distance.
The risk division now contains 290mn US unique identifiers, 13bn names and addresses, 8bn vehicle records, 9bn device records and 3bn digital IDs. That’s a lot of data, not to mention the 16bn keyboard, mouse, sensor and touch transactions it processes annually. 80 percent of its revenue comes from the US, where privacy laws are less stringent than in Europe.
Part of the reason the identity business is expanding and so profitable for Relex and its investors is that it’s transparent. An insurer or bank can verify payments by turning the technology on and off because these checks reduce fraud enough. There is enough crime to pay.
Engstrom deserves part of the credit for increasing the amount of x in Relex, but not all of it. An early breakthrough in identification came from his predecessor, Sir Crispin Davies. The result is the less attention paid, the more valuable the business. Follow the money and it will lead to your phone.
