DIGITAL ENVOY ACQUIRES TRANSACTION MONITORING TECHNOLOGY COMPANY CYDELITY

Atlanta – March 2007

Digital Resolve Business Unit Will Marry Complementary Online Anti-Fraud Solutions to Bridge a Gap Between Front-End Access and Back-End Activity

With consumer fears driving increased security for the online channel, organizations will add additional layers of security such as transaction monitoring to most effectively protect online users. Digital Envoy’s acquisition of Cydelity, a California-based technology provider specializing in real-time transaction monitoring, enables organizations in all industries to protect sensitive online data and online financial transactions, closing a gap that exists between front-end access authentication and back-end transactional activity monitoring. By linking its powerful and robust access behavior profiling technology to Cydelity’s transaction monitoring, Digital Resolve creates the most comprehensive risk-based authentication solution available.

The Cydelity product line, including its patent-pending eSentry transaction monitoring solution, will be marketed by Digital Resolve, a business unit of Digital Envoy, Inc., which already offers the award-winning Fraud Analyst® risk-based authentication technology platform as well as other leading anti-fraud tools.

“The continued focus on securing the online channel means organizations are looking for more comprehensive fraud detection and risk-management solutions because criminal attacks are becoming more sophisticated and malicious,” said Bill Calpin, President and CEO of Digital Envoy, Inc.

Dennis Maicon, Executive Vice President of Digital Resolve adds, “The combination of our two complementary technologies marries user access and transactional activity monitoring in a way that synergistically evaluates access and transactional behavior, giving customers total end-to-end protection for the online channel. This solution provides our customers an extensive view of their online channel unlike anything they’ve ever seen – from log-in to log-out, across every online user session and touch point.”

Combining what Digital Resolve already offers – robust, patent-pending user behavior profiling and risk-based authentication – with Cydelity’s data collection and analysis for user activities and transactions creates a solution to further improve upon the 90 percent fraud reduction rate already experienced by current Fraud Analyst customers. The combined transaction monitoring and behavioral profiles will indicate signs of fraud events happening across multiple user sessions and give real-time detection and intervention on risky transactions, both at the individual and enterprise levels.

“We are bringing together two companies with synergies in both technology as well as market philosophies,” said Bob Ciccone, president and CEO of Cydelity. “We are pairing two excellent solutions to create an exceptional online risk management solution that addresses fraud detection and authentication throughout the enterprise. This would not have been possible without the shared vision of creating technology that is transparent to end users, yet seamless for customers to implement.”

Avivah Litan, vice president at Gartner, Inc. in Stamford, Conn., states that banks will spend more money on consumer banking security solutions in 2007 than they did in 2006 as they layer on more security applications and fine-tune those they already have1.

“To effectively prevent fraud and unauthorized data access, enterprises must secure both the front and back doors into their accounts," noted Litan in a Gartner report on complementary security methods2. "This can help ensure that no matter how an impostor gets into an account - for example through insider activity, the phone, a store or automated teller machine - the illegal activity can be stopped in its tracks."

According to George Tubin, research director, delivery channels, at TowerGroup Inc. in Needham, Mass., as fraud continues to migrate and change, the ever-increasing degree and nature of fraud attacks should drive companies to look deeper than initial log-in authentication.

“Banks should treat the initial login as a high-risk transaction and use multifactor authentication for all online account access. But the initial authentication should not be the end of it,” said Tubin3. “Certainly a bank can improve its security by continuing to monitor the online session for fraudulent behavior. Because no authentication approach is 100 percent effective, session monitoring is an approach that can potentially detect fraud by identifying behaviors that typically lead to fraud (e.g., login, change password, set up new bill payee, make payment to new bill payee, logout) or behavior that is uncharacteristic for a specific user based on the individual's transaction history.”

Digital Resolve will immediately offer a combined Fraud Analyst and eSentry solution in addition to offering each solution as a standalone. This will allow companies to quickly deploy fraud protection and leverage advanced research, analysis and reporting tools at both the access and transactional levels. Due to the extensible nature of Digital Resolve’s Fraud Analyst platform, the company expects to quickly incorporate eSentry, offering the industry’s only integrated, modular platform for online fraud detection and prevention.

Digital Envoy will retain the Cydelity staff and offices in California, further strengthening the company’s West Coast presence. Additionally, Cydelity brings over a number of financial and service provider customers.

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