Subscriber Computing Inc. is acquiring a small Dallas company that has developed a fraud detection system using U.S. military defense signal analysis technology.
Intelligent Object Solutions Inc. was formed in 1995 and is just rolling out its MicroProfile and Intelligent PIN products commercially.
Both SCI and IOS are private companies. The acquisition price was not disclosed.
Irvine, Calif.-based SCI provides management information systems for the wireless communications industry. It provides post-call analysis that helps in fraud detection and debt control. SCI also has deployed a product called FraudWatch, which it will continue to support.
But IOS has two fraud products SCI considers advanced and is anxious to market.
The MicroProfile focuses on unique human behavior rather than on thresholds or alarms, said Bob Fike, IOS chief executive officer. The idea comes from Department of Defense signal intelligence analysis, which IOS licensed from Sanders, a company belonging to defense contractor Lockheed Corp.
Unix-based MicroProfile collects and stores months of home and roaming call detail records for every subscriber. The system profiles the individual behavior of each subscriber. Deviations in the behavior can trigger automatic action-which IOS calls interdiction-during the pre-call validation process.
That’s when IOS’ Intelligent PIN program steps into the process. When a call is attempted that is inconsistent with the user’s behavior, the system demands personal identification verification, denies the call or does whatever the carrier chooses to do.
“The carrier using the system decides how he wants to treat those deviations,” Fike said. IOS has a patent pending on the Intelligent PIN.
Customers don’t have to enter PINs regularly, only when a call is attempted that is outside of the usual pattern, and that is good news for carriers, said Mark Nielsen, SCI chief executive officer.
“It’s less intrusive and limits the burden on the consumer,” Nielsen said. And it means a customer’s phone number doesn’t have to change if the number is cloned; the system will just intercept bad calls, he said.
Plans call for the product lines of SCI and IOS to become a single product line supporting multiple platforms. IOS will become a part of SCI’s real-time business division.
The acquisition of IOS and its two fraud products puts SCI ahead of other players, Nielsen contended. “There will be a little crossover between products, but primarily, our offerings are complementary. They have the capability in Advanced Intelligent Network and Signaling System 7,” Nielsen said.
IOS will stay in the Dallas office, which will be expanded. Research and development will continue to be supported. Also, SCI would like to build a platform and create a bureau in Dallas that could provide fraud service for carriers interesting in avoiding the capital equipment expense of doing fraud detection themselves, Nielsen said.
Many start-up carriers are focused on building their networks and marketing in a competitive atmosphere, and fraud detection service would be something they could outsource to SCI, Nielsen said.
The MicroProfile and Intelligent PIN integrated solution also will be available on a software license basis.
SCI recently closed a private equity placement totaling $15 million. The placement was funded by Advent International and GE Capital as the leading investors.
“The funding will allow us to complete future releases of our products on multiple operating platforms, improve our infrastructure and testing lab facilities and expand SCI’s marketing presence including possible strategic acquisitions,” Nielsen said.
