Costa Rican company SmartSoft developed with the support of the Propyme Fund, the software “Dynamic Behavior Patterns” which detects and prevents fraud and money laundering and helps national and international financial institutions increase their security and protect their clients’ resources.

“Dynamic Behavior Patterns” is the result of the project “Determination of dynamic behavioral patterns for the prediction of fraud and money laundering in the financial sector”, promoted by Pablo Elizondo, CEO and founder of SmartSoft; this software does not use the traditional detection paradigms, but instead uses a unique system that is based in the analysis of the client’s behavior and the sector of the population to which he/she belongs.

“By knowing how frauds behave historically, similar transactions are identified and then they are analyzed to determine if they are or not new frauds”, explains Elizondo.

For instance, currently, credit and debit card fraud where the client’s data is used for e-commerce is one of the most common types of fraud taking place today; banks sometimes opt for blocking transactions and this could affect a client that has patterns of e-shopping similar to fraudulent transactions; the new software analyzes data but differently, from the perspective of the clients’ behavior.

The clients historical transactions are analyzed and based on this data a process of learning behavior patterns is generated, and the system learns, in the case of credit cards, the habits of consumption of a particular individual, the group he belongs to, which is determined by a number of variables, etc. The software therefore knows the client, his/her preferences, the average amounts usually spent, the places frequently visited, etc. This information is then used in fraud protection, by comparing the client’s behavioral patterns to new transactions.

“The system learns in a scientific manner of the clients’ regular behavior, this is the main difference with the rest of the systems existent, and from this point on, it alerts of unusual behaviors”, states the press release.

160 financial institutions in 15 countries will benefit of the use of this new software.