Monday, August 31st16.4°C
27214
24949

St. John's, N.L., firm Verafin a growing force against fraud, money laundering

ST. JOHN'S, N.L. - In 2003 Brendan Brothers was a 25-year-old graduate student designing robots at Memorial University of Newfoundland for dangerous mining jobs deep underground.

But he and two other researchers, Jamie King and Raymond Pretty, were hampered by a small market for such technology with few companies looking to use it.

"They likely weren't going to buy software from three guys in a lab in the middle of nowhere in Newfoundland," Brothers recalled in an interview.

The trio leaped at the chance to be part of a fledgling project at the university. Its aim was to develop a product that would help banks and credit unions catch fraud and money laundering.

"We thought the kinds of things that we were doing for these vehicles to make decisions for themselves would apply very directly to the problem of trying to find suspicious activity in transactions," Brothers said.

Today, the three former students are co-founders of Verafin, a St. John's-based company that's already a global leader in financial security technology. It's also poised to grow in a big way.

Verafin just landed earlier this month a $60-million buy-in from Spectrum Equity, a private equity firm based in Boston and Silicon Valley. The investment gives Spectrum a substantial minority stake in Verafin. Brothers declined to confirm the exact size of that share, but said bankers have described Spectrum's commitment as the biggest such cash injection ever in an Atlantic Canadian startup.

He said the money will fund the next growth spurt for a company that has seen revenues, forecast to reach about $30 million this year, rise by more than 50 per cent annually in recent years.

"It's a fast-growing industry."

Verafin fraud and money laundering detection software is now in more than 1,100 financial institutions across North America, he said.

The company plans to add to its 210 employees, most of them in St. John's, with others based in Alabama and Toronto. It will expand and improve its sales and marketing services while refining its product, Brothers said.

"It's a large problem but it's also an ever-changing one," he said of fraud and money laundering that together are estimated to involve trillions of dollars each year.

"Fraudsters don't stay and keep the same methods that they've used year after year. They're constantly tweaking and tuning their methods, the same with money launderers."

Brothers said the key to Verafin software is its ability to catch unusual or abnormal transactions by creating customer profiles and tracking them.

A simple fact applies to criminals ranging from street corner drug pushers to terrorists, Brothers said.

"At the end of the day, people need to move money around the financial system in order to pay for these kinds of things, in order to use the proceeds of their crime. So being able to monitor suspicious activity is very important because it's this underground economy that runs and operates.

"And it hurts normal people the same as it hurts big corporations."

Brothers said it's hard to gauge the extent to which Verafin software has cut crime.

"We have anecdotal evidence from our customer base that we've prevented thousands of frauds."

He said it's especially gratifying that the company created in 2003 has had such success from St. John's, a city usually linked to other ventures such as the oil sector and ocean industries.

"It should open people's eyes that there is opportunity here," Brothers said.

Chris Mathers, a former RCMP officer who worked undercover as a gangster and drug trafficker, is now a crime and risk consultant.

"The problem with terrorist financing and money laundering is that it's almost invisible unless you're equipped with the kind of software that a company like Verafin and other companies provide," he said.

"This affects our economy. This affects our personal safety. It's absolutely important that we try to control this."

Follow @suebailey on Twitter.

The Canadian Press


Read more Business News

26744


Recent Trending




Today's Market
S&P TSX13859.12-5.95
S&P CDNX559.48+3.49
DJIA16528.03-114.98
Nasdaq4776.51-51.82
S&P 5001972.18-16.69
CDN Dollar0.7608-0.0005
Gold1140.80+9.20
Oil47.83-1.37
Lumber233.00-1.20
Natural Gas2.694+0.005

 
Okanagan Companies
Pacific Safety0.185+0.020
Knighthawk0.010.00
QHR Technologies Inc1.23-0.06
Cantex0.04-0.01
Anavex Life Sciences1.35+0.01
Metalex Ventures0.05-0.00
Russel Metals22.11+0.70
Copper Mountain Mining0.63-0.01
Colorado Resources0.075-0.005
ReliaBrand Inc0.0045+0.0005
Sunrise Resources Ltd0.02-0.01
Mission Ready Services0.085+0.015
Decisive Dividend Corp2.75+0.14

 





FEATURED Property
2253030370 Gibson Road
4 bedrooms 4 baths
$1,495,000
more details
image2image2image2
Click here to feature your property
Please wait... loading


Agree to ask questions

Photo: Thinkstock.comThe STORY: I think, said Janet to herself, that I just figured out a solution to my problem of letting the prospect run the meeting.With that thought in mind, she got out of her c...


Your business is not a bank

Photo: Thinkstock.comYour plumbing business is not a bank. But when you are giving terms to customers that exceed what you get from your suppliers, you become one. And every time that someone does not...


Begin with the end in mind

Photo: ContributedWe humans love our dates: birthdays, anniversaries, 9/11, the Ides of March - our lives are intimately woven within the tapestry of the calendar. So it should come as no surprise whe...

_



26509




Member of BC Press Council


26916