Fintech Luminary Edelstein Signs on as BioCatch CEO

Edelstein took on the role earlier this week. Based in New York, he has been the chairman of the tech firm—which uses behavioral analysis to confirm the identity of users by drawing in hundreds of data points—since 2016.

“I’ve not seen anything so invigorating, exciting or valuable [as BioCatch] in years,” Edelstein says. “What I initially thought of as science fiction has become science over the past two-or-three years, and when the opportunity came up, I said it was the time to raise capital, to scale the business and turn it into something really special.”

BioCatch’s technology utilizes artificial intelligence and machine learning to analyze hundreds of data points about a user’s behavior, in order to determine whether or not the person accessing services is who they say they are. The company is firmly targeting the financial sector with a scattering of e-commerce clients, for now.

Some of these are standard, simple signals that can be used to authenticate users, but others are far more complex. The company has put an emphasis on behavioral biometrics over credentials—for instance, the way in which people use keyboards and enter information is highly personal, but you have to know the right traits and tells to look for in advance. Likewise, someone entering their own information, such as their name or social security number, into a loan application is far more likely to do so quickly and efficiently, without errors, than someone reading it off a data file containing personal information bought from the dark web.

“Sit down and fold your arms,” Edelstein tells WatersTechnology. “Now fold them the other way. It’s not so easy—and that’s what BioCatch does. Believe it or not, you have thousands of personal preferences, like folding your arms, which you’ll never do differently because your mind tells your body what it’s comfortable doing. You have the same kind of preferences for how you use your keyboard, hold your phone, tap on your tablet, and move your mouse.”

Edelstein claims that the technology has managed to tell, within five seconds of a user logging into an online financial account, whether that user is genuinely the person holding the account or not.

“These guys have analyzed and perfected a model where they have identified somewhere between 50 and 150-ish traits that are very strong. Is it as precise as a fingerprint? No, but it’s really consistent, and it evolves—it’s statistical, stochastic, and having a machine learning you means the machine will know it’s you logging in every time. This is the science fiction that has become science,” he continues.

The firm is in the process of a “significant” capital raise to scale the business, he says, and has a number of “major” clients proofing the technology.

Impressive Resume

In Edelstein, BioCatch has secured an industry veteran with enormous experience in financial technology. During the 1990s, he served as CEO of Thomson Financial ESG, which would later become Omgeo, the Depository Trust and Clearing Corporation-owned post-trade giant. He joined Radianz in the early aughts as its chief executive, and later developed something of a reputation as a turnaround king, taking control of the troubled vendor Nyfix and ensuring its relisting on the Nasdaq, as well as a corporate rebuild of BondDesk. Later, as chairman of Redi Technologies, he oversaw its carve-out from Goldman Sachs, and has also served as an entrepreneur-in-residence at private equity firm Warburg Pincus.

Recent appointments have seen Edelstein take on a chairman role at AcadiaSoft, which he will retain for now, and as a board advisor for fixed-income fintech Algomi, a role he has now resigned from in order to focus on BioCatch.

His early career was marked with stints at Telerate, Knight Ridder and CATS Software.