GIACT / LSEG Account Verification

Type: Bank-account, payment, identity and fraud-verification provider.
Legal history: Giact Systems, LLC was acquired by Refinitiv on December 8, 2020 for $610 million plus an earn-out of up to $13.5 million. Refinitiv is now part of the London Stock Exchange Group (LSEG).
Pandemic role: Off-the-shelf verification vendor in Blueacorn's PPP stack.
Current status: Operates within LSEG's risk and account-verification products.

Pandemic-role map

Reader shorthand: account-verification and payment-fraud vendor.
What GIACT did for applicants: did not deliver PPP money. Its tools helped platforms check that a bank account existed, who owned it, and identity and payment-risk signals.
What GIACT sold to other companies: account verification, payment validation, OFAC screening, identity verification and authentication, used by banks, lenders, insurers, retailers, payment processors and government agencies.
Where responsibility sat: Blueacorn and its lenders of record decided how to use GIACT's results in their PPP workflows.

Before the pandemic

GIACT was founded in 2004. About a decade later it announced a majority investment from the private-equity firm Tritium Partners, saying it served more than 1,000 customers and had helped secure and process more than a billion transactions. Its co-founder and chief executive at the time of the 2020 sale was Melissa Townsley-Solis. Refinitiv's lawyers at Simpson Thacher described the company in November 2020 as headquartered in Allen, Texas, with nearly 1,000 customers. Equifax had a partnership with GIACT from 2019, and Citi used GIACT to launch its Citi Verify service.

During the pandemic

The House Select Subcommittee on the Coronavirus Crisis's December 1, 2022 fintech report, "We Are Not the Fraud Police," names GIACT, spelled "Giact," as one of four "commonly used third party software products" that Blueacorn relied on to "help improve our risk posture and mitigate fraud." The other three were Plaid, Onfido and IDology. The report says Blueacorn "largely relied on off-the-shelf fraud and KYC technology software subscriptions" while routing PPP applications to its lenders of record, Prestamos and Capital Plus. The report's account of Blueacorn setting one of those tools aside to approve more applicants concerns IDology, not GIACT.

The sale happened in the middle of the pandemic. Refinitiv agreed to buy GIACT on October 19, 2020, announced the deal on November 2 and closed it on December 8. According to Refinitiv's prospectus for its sale to LSEG, the price was $610 million, plus an earn-out of up to $13.5 million payable after the end of 2023. Phil Cotter, who ran Refinitiv's risk business, said GIACT's payment analytics would help customers tackle fraud threats "accelerated by the economic downturn and the Covid-19 pandemic."

After the pandemic

On August 9, 2021 Refinitiv made GIACT's EPIC platform and its World-Check risk database available through a single API. In May 2021 the trade publication Mergers & Acquisitions named Refinitiv's purchase of GIACT from Tritium Partners its "Fintech Fraud Detection Deal of the Year." LSEG's 2021 annual report said revenue in its Customer & Third-Party Risk Solutions unit rose 34.6%, "primarily driven by the acquisition of the GIACT and RedFlag businesses in 2020." It also said World-Check and Qual-ID had been built into the GIACT platform and had made their first sales.

Source notes

Blueacorn