Editorial Team

The Braintrust: Soups Ranjan (Sardine) on Fraud and What It Means For Fintech's Future

Soups Ranjan has been consumed by cybersecurity for almost two decades. Back in 2005, after presenting his PhD dissertation on the prevention of application-layer denial-of-service attacks, he began to work at a startup that sold cybersecurity tools to telcos. From there, he worked at multiple companies, including Flurry (acquired by Yahoo) and Yelp, where he used machine learning to root out click fraud.

But it was during his time at Coinbase that he truly got consumed with fraud in the financial sector. The cryptocurrency exchange — which just went public at a $100 billion valuation this week — was a constant target for the most sophisticated fraudsters. Ranjan knew he had to learn everything there was to know about the financial cyber-fraud space, but it soon became clear there wasn’t any one person or company to lean on. 

After four years at Coinbase, Ranjan founded Sardine, a Fraud-Prevention-as-a-Service startup that works with small and established players in the Fintech and crypto space. He’s used a half-decade of financial cyber-fraud experience and a lifetime of obsession about cybersecurity to build the service he was looking for when he started at Coinbase. “The whole time I was learning how to fight fraudsters, I always felt that the fraud space could have been much better if there was someone helping us figure out how to do it from the start,” Ranjan says. “That's what sparked the idea for Sardine.”

Unifimoney has partnered with Sardine to help ensure that our customers’ money is protected by the best fraud prevention service on the market. We spoke with Ranjan to learn more about why he started Sardine and how it can change the way the average consumer interacts with their bank and their money. 

What sparked the idea for Sardine?

The whole time that I was working at Coinbase, which was 2015 to 2019, I got exposed to some of the most sophisticated fraud and account takeover attempts because crypto is one of the most attractive things a fraudster can steal — it’s instantly transferable, irreversible and highly liquid. . And I always felt that there was no one true partner that I could have gone to ask for advice. Remember: I was new to payment fraud; I had done cybersecurity and click fraud, but not payment fraud. And there's no textbooks written about how to deal with payment fraud. There's no graduate course or even an undergraduate course on how to fight payment fraud. I had to quickly become an expert and I didn't have any resources to tap into. 

So, I started a few efforts around bringing people in the community together. I started Risk Salon in 2015 where we would host monthly meetups with risk leaders from different companies in the Valley. Eventually, we expanded it to 2,000+ members across multiple locations including Seattle, New York, and Israel. That became a great venue for me to learn from my peers. 

My whole time at Coinbase, I always had in the back of my mind that I want to start a company geared around fraud prevention. And the whole time I was learning how to fight fraudsters, I always felt that the fraud space could have been much better if there was someone helping us figure out how to do it from the start. That's what sparked the idea for Sardine. 

At this moment of massive growth in Fintech, how do you think fraud-prevention-as-a-service can be a boon for neobanks like Unifimoney to take on incumbent banks?

The biggest thing when it comes to money is that you have to earn people's trust. That means you have to make sure that your customers know that their money is secure all the time from hacks and attacks. A lot of Fintechs and neobanks getting started in this space think that payment fraud is just a bottom-line problem. But it's more than that: it's completely tied in with both trust and customer experience. 

One of the best things that a neobank like Unifimoney can do is to make sure that trust is central to your product. Preventing fraud on your platforms will not only earn your customers' trust, but also will keep your brand attractive to future customers as well.

It’s fascinating to see how an incumbent bank like Wells Fargo, which has a history of questionable practices, still has this built in trust from just being around for so long. In your view, if a Fintech is working with Sardine, are they actually going to be ahead of some of the big banks when it comes to fraud?

Yes. Absolutely. We offer a fraud prevention platform which offers the most sophisticated AI signals and models to detect a variety of fraud, ranging from identity fraud, detecting stolen payment instruments and preventing account takeovers. With Sardine, Fintechs and neobanks have a holistic fraud prevention solution that allows them to actually be competitive to the big banks from day-0.

We spoke with Anshu Sharma at Skyflow who similarly is building a data-privacy-as-a-service API that we think will be a must-have for neobanks going forward. Sardine seems to be another part of that suite of services to build a responsible, future-looking Fintech. What will it mean for the average consumer when the barrier to entry to launching a financial product is lowered with the entrance of Credit-Card-as-a-Service, KYC-as-a-Service, data-privacy-as-a-service, fraud-prevention-as-a-service as well as services like Plaid?

So, with Sardine, we have customers on all ends of the spectrum, from small, up-and-coming Fintechs all the way to the more established neobanks and crypto exchanges. The animating idea is that we are going to be your trusted partner at preventing fraud, while also working to balance fraud prevention with user friction. 

Every Fintech essentially crosses a few different chasms as they expand. The first is at the time of launch: if fraud doesn't kill them, then they'll survive. The second is when they're going through the growth phase. They may have a leaky funnel where either they're spending way too much money on acquiring customers, most of whom are fraudulent, or they may have added so much friction that the money spent on acquiring customers goes to waste, because most of the people just drop off of the funnel. So, that's another place we come in to help balance fraud with friction. 

Then, at the last stage for the more established companies, fraud becomes a margin game. Because in payments, for instance, margins are really, really low. For crypto companies, the margins are high, but the fraud rates are really high as well. And therefore, when folks use Sardine, we can help them truly enter profitability by minimizing the dollars lost to fraud.

My last question is: with so much of banking and finance moving online, do you see fraud prevention as table stakes for startups going forward?

Yeah, absolutely! If you think about it, whenever I swipe my Chase card or Bank of America card at a merchant, there's an army of data scientists who have built algorithms to decide whether to trust this purchase or not. When I move money into my Chase account via ACH, they have an established system which looks at whether to trust the bank account on the other side of the transaction. 

Now, if you fast forward to the moment a16z projects where every company will be a Fintech company, then that means that you will have embedded finance all over the place — Uber trying to become its own bank for drivers; Shopify building checking accounts for its merchants, et cetera. For any of these previously non-Fintech companies, when they start providing financial services, they will have a hard time figuring out how to do fraud prevention or KYC or any of the other necessary steps that banks and Fintechs take on every day. 

That's why fraud-prevention-as-a-service and KYC-as-a-service is such a fascinating and growing space. Sardine can become the trusted partner to help navigate Fintechs like Unifimoney through this exciting financial moment.

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The above does NOT constitute an offer, solicitation of an offer, nor advice to buy or sell specific securities. The opinions listed above are not the opinions of Unifimoney Inc. or Unifimoney RIA, Inc. but represent the opinions of independent contributors. These contributors may or may not hold positions in the stocks discussed. Investors should always independently research any stocks listed and form their own opinions, while recognizing that any investments made may lose value, are not bank guaranteed and are not FDIC insured.