Actimize Acquisition Is a Good Fit for Nice Systems

Archived Published: 09 July 2007 ID: G00150134

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The acquisition will further Actimize's growth in the emerging enterprise fraud detection market. It will also help Nice meet its goal of improving the integration of analytics for customer transactions and interactions.

News Analysis


On 2 July 2007, Nice Systems, a provider of call center quality management and interaction analytics solutions, announced a definitive agreement to acquire Actimize, which focuses on transactional risk management, compliance and anti-money-laundering software for the financial services industry. Actimize will continue to operate as a wholly owned subsidiary with its own management team. The deal is for approximately $280 million.


Nice Systems' acquisition of Actimize represents further consolidation of the fledgling non-credit-card fraud detection market. Actimize has rapidly expanded within this market and claims several dozen blue-chip global banks and investment firms as clients, such as Bank of America, Morgan Stanley and Lloyds TSB. Actimize expects its revenue to approach $40 million in 2007, representing more than 50% growth over 2006. It has enjoyed a compound annual growth rate of 125% over the past five years and expects to see long-term growth of 30%. Nice, which has more than 24,000 customers — the majority of which are in financial services — will earn about $500 million in revenue in 2007. Nice is also growing rapidly, from $311 million to $418 million in 2006 non-GAAP revenue, of which approximately $50 million came from another acquisition.

Nice is on a quest to dominate the compliance-driven financial services risk management market. About 70% of Nice's business has been driven by financial services firms' needs to comply with various government regulations. Actimize's business model offered a good fit, as its sales to the financial services market are also largely compliance-driven. The worldwide fraud detection market has just a few players — most of which have been acquired by firms that have more diverse missions and place less focus on fraud than Nice (such as EMC and VeriSign). The sharp focus of the Nice/Actimize combination on serving this particular market should give it a competitive edge.

Actimize and its competitors — including Norkom, Neteconomy and ACI worldwide — have shied away from the credit card fraud market, where Fair Isaac is already entrenched. Instead, Actimize and other competitors focus on enterprisewide cross-account (excluding credit cards) fraud and cross-channel (including Web, phone and ATM) fraud perpetrated by customers or employees.

Actimize's fraud detection and compliance platform, based on transaction analysis, will now be able integrate the analysis of customer interactions (such as phone calls and e-mail messages) that Nice technology provides. The combined data streams will give the firm a further competitive advantage. For example, Actimize's upgraded fraud detection could detect a nervous caller changing an address right before an account is taken over, or a caller persuading a customer service representative to reset a PIN just before a large sum was withdrawn from an account.

Nice now has the ability to develop more granular Web services to take advantage of the transaction analytics provided by Actimize. Nice will be able to enhance its own core contact center workforce optimization (WFO) SmartCenter by integrating Actimize’s transaction analytics technology. Though the technology is currently used for some forms of fraud detection, by 2010 it could be applied to customer marketing, acquisition and retention activities. SmartCenter’s analysis sources are now limited to audio, call flow, emotion and screen content. This approach will make Nice’s horizontal contact center solution — which accounts for more than half of the company’s revenue — more competitive with Verint’s, its nearest rival.


Current and prospective Nice/Actimize customers

  • Expect stronger call center and/or fraud analytics that encompass both transactional and interaction data by 2008.

  • Pressure the combined firm to deploy more advanced system integration tools that enable faster deployments, and provide the ability to update models and rules quickly without assistance from the vendor.

  • Ensure that the Actimize case management system can manage workflow on customer interaction data that the Nice platform provides.

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