Plaid has announced that after two years in beta, its machine learning (ML) risk engine, Signal, will be available to customers looking to enhance their automated clearing house (ACH) transaction services with fraud detection capabilities.
Signal operates through Plaid’s open banking platform and functions similarly to how card networks and financial institutions leverage network insights to manage risk and fraud. It provides real-time transaction analysis of ACH returns, utilizing data insights sourced from Plaid’s extensive network.
Employing over 1,000 risk factors, Signal implements a tiered scoring system to offer a clearer understanding of account interactions across the ecosystem. This feedback can be integrated into businesses’ risk programs to help diminish fraud incidents.
Plaid reports that several customers have utilized the service for over a year, currently protecting nearly $1.5 billion in transactions each month. Notable companies already employing Signal include Robinhood, Uphold, and Webull.
The announcement coincides with the introduction of John Anderson as Plaid’s new head of payments. In a blog post regarding his new role, Anderson emphasized that products like Signal will facilitate the expansion of ACH usage for applications that need quicker access to funds.
Anderson noted that Signal has enabled one investment platform to offer accelerated access to funds for up to 96% of its new users—dramatically improving user experience without raising its ACH return rate. This advancement allows new users to start investing almost immediately rather than waiting up to five days for funds to settle, thereby enhancing conversion rates and user engagement.
Omid Scheybani, director of product partnerships at Robinhood, commented on Signal’s impact, stating that effective risk and fraud management is essential for balancing the prevention of bad transactions with providing a seamless experience for trusted users. By integrating Plaid’s Signal with their internal solutions, they have been able to maintain fraud detection while improving model accuracy and reducing false positives.
Christopher Adjei-Ampofo, chief information officer at Uphold, also highlighted the significant benefits for users, noting that more Uphold users can trade instantly without enduring the usual four-day settlement period for ACH deposits, describing it as a game changer.