Financial institutions (FIs) supporting global payments must remain vigilant in the face of rapidly-changing risks and fraud. With consumer demand, payment options, channels and places to shop evolving at a dizzying rate, fraudsters act before risk practices can catch up. Hundreds of acquiring and commercial banks, and their value chain partners, turn to G2 Web Services for help.
Industry Innovator
G2 is a Seattle-based global information and services business providing merchant risk insight that helps financial institutions conduct safer, more profitable commerce. Founded in 2004, G2 derives its name from intelligence community jargon that describes mission-critical, risk-reducing intelligence.
G2 is growing and innovating to help clients work smarter and face emerging risk challenges. Recently, G2 improved its industry-leading merchant monitoring solution, Persistent Merchant Monitoring (PMM), by expanding into new hazards. PMM is the industry’s leading solution to monitor merchant websites for non-compliant, illegal and brand damaging content. This month, G2 will unveil to a group of pilot clients the next-generation PMM portal, which offers significant speed, functionality and benchmarking improvements.
Pioneer of G2
Allison Guidette, CEO of G2 Web Services is responsible for setting the strategic direction and for driving customer-centric innovation and growth. Allison brings nearly 20 years of general management experience in information and technology for professional services industries. Allison is one of the few women CEOs in the Fintech industry. In two years she has built deep client connections as well as launched award-winning services solving pervasive risk issues. As a result of Allison’s leadership and her support for a flexible workplace environment, G2 has won the When Work Works Award, recognizing its employee-centric HR policies, for the past two years.
“Initially, G2 focused solely on helping acquiring banks spot illegal and brand damaging content in websites of their e-commerce merchants. Over time we’ve expanded our services, namely into identifying risk at onboarding of new merchants and transaction laundering detection,” says Allison. “Today we also serve risk and compliance teams at commercial banks and third-party payment processors (TPPPs) by exposing unknown risk in their business customer portfolios,” she adds.
Preventing or Removing Merchant Risk
The foundation for G2’s merchant risk intelligence solutions is the G2 Merchant Risk Platform™, which combines web crawling, processing, classification and modeling to provide the most comprehensive view of merchant risk available in the market today. The platform houses the Merchant Map®, a proprietary risk history database built through over a decade of partnership with acquiring banks around the world. The Merchant Map powers G2’s customer due diligence, compliance and fraud detection solutions, with data on millions of merchants and connections made through data science. The Merchant Map helps banks and processors discover bad actors and determine the likelihood that a merchant will engage in fraudulent activity. G2’s combination of technology, data and experienced analysts allows financial institutions to improve regulatory and card brand compliance, gain portfolio transparency, and transform the way they monitor and manage merchant and business risk.
G2 also pioneered Transaction Laundering Detection (TLD), which identifies illegal merchants that are processing transactions through known merchants. Since the launch of TLD, G2 has continued to innovate detection techniques, leveraging data science and proprietary merchant risk history data, and has rolled out a new client portal.
G2’s Know Your Customer (KYC) Solutions help commercial banks and third-party payment processors improve their regulatory compliance, increase their operational efficiency and better manage risks that are difficult for financial institutions to detect with commonly used KYC tools. Applying its industry expertise, technology platform and expert analysts, G2 exposes hidden risks that could subject an FI to regulatory scrutiny and fines.
In one recent example, G2 used its Business Classification solution to uncover numerous businesses lurking in a bank’s portfolio that were on its “prohibited” category list. These included a military-grade arms seller misclassified as a “hardware store,” a gambling business classified as “food and drink”, an adult entertainment business classified as “catering” and a bank that had warnings about excessive debit card fraud classified as “other.” The bank had far more risk in its portfolio than it was aware of, creating a disconnect on how it treated and monitored those businesses—and exposing itself to regulatory action.
In another case, G2’s Negative News solution revealed banks unwittingly doing business with individuals convicted of fraud related to reconstruction projects in the Middle East, a person on the Most Wanted List in Mexico for involvement in a major drug cartel and a company using deceptive and abusive advertising practices in violation of Federal regulations.
G2 offers these capabilities to acquiring banks through Portfolio Review, a menu of services that help banks validate merchant category codes and evaluate reputational risks with their merchants. Portfolio Review solutions help banks to Know Your Merchant, addressing regulator and sponsor bank requirements for periodic reviews of their entire portfolio.
A Future of Industry Collaboration
As Allison looks towards the future of G2 and the evolution of the payments industry, she is excited for the opportunity to help drive the collaboration needed to combat emerging threats. “Fraudsters increasingly use technology to commit their crimes as well as to network with like-minded organizations,” she explains. “G2 is committed to continuing to listen to clients, invest in innovation and partner with other “white hats” to ensure that our network and defenses are the strongest to meet these threats to the payments system head on.”
