A New Era in Fraud Prevention and Compliance: Sardine’s Unified Data Fabric Tackles Evolving Threats

In an AI-first world, where enterprise and financial services fraud and compliance risks have become more complex and pressing than ever, the ability to continuously monitor data streams and identify emerging threats in real-time is critical. Sardine’s platform not only helps businesses mitigate risks but also positions them to seize opportunities that arise from effectively understanding and managing those risks. That’s why we’re excited to announce our investment in Sardine, a company that’s redefining the approach to fraud prevention and compliance for the financial services and enterprise sectors.

The Growing Threat of Fraud and Compliance Risks

With the rise of digital transactions, cryptocurrencies, and sophisticated cybercriminal techniques, the threat landscape has expanded dramatically. In 2023 alone, the Office of Foreign Assets Control (OFAC) fined 17 firms a staggering $1.54 billion for compliance violations. This underscores the urgent need for more effective solutions.

Moreover, the rapid growth of fintech and enterprises embedding financial offerings has introduced new vulnerabilities. Regulators are increasingly focused on mitigating the compliance risks associated with rapidly scaling fintechs. Traditional fraud prevention methods are struggling to keep pace with these evolving threats, often resulting in high false positive rates that can reach up to 95%.

Sardine’s Comprehensive Platform: A Game-Changer in Fraud Prevention

What sets Sardine apart is its comprehensive, end-to-end platform approach to fraud prevention and compliance. Unlike point solutions that address only specific aspects of the problem, Sardine offers a unified data fabric that powers fraud, risk, and compliance use cases across the entire customer journey.

Sardine’s platform combines several key elements:

1. Device Intelligence and Behavioral Biometrics: Sardine uniquely integrates device intelligence and behavioral biometrics in a single SDK. This allows for a more comprehensive risk assessment by correlating signals from both user behavior and device characteristics.
2. Real-Time Risk Operations: The platform offers superior real-time risk management capabilities, enabling businesses to detect and prevent fraud as it happens, rather than after the fact.
3. Modular Architecture: Sardine’s platform is designed with a modular approach, allowing customers to use and pay for only the capabilities they need. This flexibility makes it suitable for a wide range of businesses, from small startups to large enterprises.
4. Comprehensive Data Approach: Along with its extensive proprietary data, the platform integrates data from 40+ enrichment sources, providing a holistic view of user behavior and risk factors. Critically, its Sonar Fraud consortium is now the largest independent data-sharing network enabling real-time intelligence sharing across industries.
5. Advanced AI and Machine Learning: Sardine leverages cutting-edge AI and machine learning techniques to continuously improve its fraud detection capabilities and adapt to new threats.

This comprehensive approach allows Sardine to consolidate multiple-point solutions into a single platform, significantly reducing integration complexity and improving overall effectiveness in fraud prevention and compliance management.

A Deep Expertise in Fraud and Compliance Risk Management

One of the most compelling aspects of Sardine is the depth of expertise within its team. Co-Founder/CEO Soups Ranjan has a following of over 25K fraud and compliance professionals. His cofounders (Aditya Goel, Zahid Shaikh) and the broader team is composed of individuals who have built risk and AI/ML infrastructure at leading companies such as Coinbase, PayPal, Revolut, Uber, Chase, Fifth Third Bank, and Early Warning Systems.

This firsthand experience in dealing with complex fraud and compliance challenges has informed every aspect of Sardine’s platform design. The team’s deep understanding of the nuances in the space is evident in the platform’s features, such as: advanced user device screening to identify when VPNs or proxies are masking a user’s true location; sophisticated behavioral analytics to monitor device usage patterns and characteristics; as well as comprehensive watchlist screening and ongoing monitoring capabilities, just to list a few.

This expertise has made Sardine the preferred solution for Fortune 500 enterprises looking to strengthen their fraud prevention and streamline BSA/AML compliance.

Harnessing the Power of AI Across the Platform

Sardine’s use of AI goes beyond just fraud detection. The company is leveraging AI to enhance employee productivity, increase their capacity, and streamline various aspects of fraud and compliance management. Sardine’s vision is ambitious but a flavor of some of the AI-powered features include:

1. AI Agents: Sardine currently offers five AI agents, including Finley (a customer support and operations copilot), Max (for chargeback dispute management), Marley (for merchant risk assessment), Ruby (for SAR file generation), and a Customer Support Agent.
2. GenAI Copilot: This tool can convert text into SQL rules, automate batch jobs, and write SAR narratives, significantly reducing the workload on compliance teams.
3. Automated Enhanced Due Diligence: Sardine’s AI-powered system can automatically trigger enhanced due diligence reviews and step-up verifications, adding layers of security without compromising efficiency.
4. AI-Powered Case Management: The platform includes features like automated and bulk dispositioning, one-click SAR/UAR preparation, and AI-assisted investigation tools.

Why We’re Excited About Sardine’s Future

Our investment in Sardine is driven by several key factors:

1. Team: It is a zone of excellence for the founding team who have translated lived experiences to an opinionated problem-solving approach for enterprises and the financial services market. 
2. Market Opportunity: The fraud detection and prevention market is evergreen and expected to grow from $29 billion in 2024 to $63 billion by 2029, representing a 17% CAGR.
3. Proven Results: Sardine has already demonstrated impressive results for its clients. For instance, it helped a large consumer lender achieve a 7.2x ROI by accurately blocking high-risk applicants at onboarding.
4. Strong Customer Base: Sardine serves a diverse range of customers, including banks, fintechs, payment processors, sponsor banks, marketplaces, and merchants.
5. Innovative Approach: Sardine’s platform approach, combining proprietary technology with best-in-class third-party data, positions it uniquely in the market. 
6. Future-Proof Technology: With its focus on AI and machine learning, Sardine is well-positioned to adapt to future fraud and compliance challenges, including emerging threats like GenAI deepfakes.

Sardine.ai represents a significant leap forward in fraud prevention and compliance management. Its comprehensive platform approach, deep expertise, and innovative use of AI position it as a leader in this critical field. As the problems Sardine set out to solve are global in nature, Geodesic Capital is thrilled to help scale Sardine’s offerings in Japan and the US and support Sardine’s mission to make digital transactions safer and more efficient for businesses and consumers alike.