Dytrix
Mitigating Wire Fraud with End-to-End Counterparty Risk Management Support

In the current scenario, as companies accelerate their digital-first strategies, the pandemic-induced disruption has expanded the number and sophistication of attack vectors for cyber-criminals who are taking advantage of work-from-home modules, stay-at-home orders and business staffing challenges. Given the enormous scope of monetary transactions, the mortgage lending and real estate industry has emerged as one of the most attractive targets for wire fraud.

These transactions typically involve $3-400,000, making a successful attempt very rewarding.

At the time of closing, the malicious scheme is becoming an increasingly prevalent concern amongst Realtors, lenders, and consumers. In addition, lenders are subjected to significant risk to their reputation should their closing agent suffer a data breach that violates the customer’s privacy by releasing all the NPI information included in the final closing package.

"We have developed a SaaS solution that simplifies the process of identity authentication, qualification, and transaction validation services for mortgage bankers, lenders, and other parties making loans with high value electronic transactions"

Against this backdrop, Dytrix is not only helping businesses to address an ever-expanding attack surface rife with fraud but also combat it at the speed and scale that threat actors now operate. The leading financial technology company enables secure financial transactions through a state-of-the-art technology platform for wire/ACH transfer validation and closing agent management. Its SOC compliant, secure platform and supporting services are uniquely configured to client risk management requirements enabling them to achieve significantly lower fulfillment costs. “We have developed a SaaS solution that simplifies the process of identity authentication, qualification, and transaction validation services for mortgage bankers, lenders, and other parties making loans with high value electronic transactions,” says Regina Lowrie, CEO, and President of Dytrix.

According to a recent survey, wire fraud risks have soared by 90 percent from Q4 2020 to Q1 2021, as one in every three real estate transactions were targeted. Scammers have concocted a compelling but rather simple wire fraud scheme in the real estate industry, where susceptible financial information emails are typically exchanged with limited or no face-to-face interaction. Cybercriminals identify a pending sale transaction and build a profile of parties, including the title company, real estate agents, buyers, and sellers. By hacking into and closely intercepting the email exchanges of the parties involved, at the 11th hour, scammers pose as one of the participants and send false wire instructions that divert funds to fraudulent bank accounts.

“At Dytrix, we strive to stay ahead by assuming every third-party email a client receives is likely fraudulent. We use a multi-layer authentication process that authenticates contact information of closing agents/recipients before qualification and wire validation,” explains Regina. Dytrix mitigates counterparty risk management to secure lenders’ transactions and support the regulatory requirement of knowing your counterparty (KYC) by outsourcing a customized solution for lenders that helps them organize, authenticate and qualify their closing agents.

The company’s multi-layer authentication process enables lenders to establish and monitor a database of closing agents specifically qualified to their requirements, including background checks, license verification, exclusionary lists, and more, lowering counterparty risks and liability of misdirected funds of each transaction. Its secure database of closing agents also ensures meeting the requirements of CCPA, the Shield Act, ALTA best practices, and other laws/regulations regarding consumer privacy. Furthermore, Dytrix’s platform is designed to be seamlessly integrated into the lender’s Loan Origination System (LOS). The company’s transaction report provides closing agent data and supporting documentation, such as insurance declarations and validated wire instructions to the lender’s LOS, eliminating repetitive tasks to improve productivity while driving significant savings.

To further illustrate the efficacy of Dytrix, in one case, a major bank was targeted by cyber-criminals who created and posed as a bogus lender domain by adding an extra letter to the bank client’s name. The scammers rushed requests to qualify as the closing agent for a loan that was due to close in two hours via email and were able to forge the bank logo and employee signature too. However, owing to the multi-layer authentication process of Dytrix, the bank was able to thwart the fraudulent transaction in time. In addition, the company’s SOC compliant platform also helps the bank implement a flexible and automated approach that optimizes the loan manufacturing process resulting in significant ROI.

Over the years, we have gained a lot of experience in preventing cyber fraud and developing a SaaS platform. And one of the things that’s been clear to us is that there’s a transformation underway in the electronic payments marketplace where every real time payment transfer needs to be protected

The mortgage lending industry’s move to working from home was the remarkable success story of early 2021, offering a substantial boost to the entire economy, embracing the refinance boom, and keeping the American Dream of real estate ownership alive and thriving. But the pressure to innovate and adapt has never been greater as lenders are moving swiftly to incorporate technological advancements necessary to lower costs and remain competitive. “Over the years, we have gained a lot of experience in preventing cyber fraud and developing a SaaS platform. And one of the things that’s been clear to us is that there’s a transformation underway in the electronic payments marketplace where every real time payment transfer needs to be protected,” adds Anthony Schweiger, COO at Dytrix. As lending-based businesses increasingly move towards digitalization, Dytrix is at the helm of efficiently delivering secure transactions. The company is launching a range of new products, including Protected Wire ℠, a simple and low cost wire validation product for domestic and international transactions. Currently, Dytrix continues to invest its resources, in-depth experience, and state-of-the-art technologies to stay ahead of the regulatory and digitalization curve.