Haywood Talcove serves as a leader in LexisNexis‘ risk solutions group as CEO, Government and LexisNexis Special Services Inc, leading all product management, market planning and sales efforts for government customers.
Talcove joined the firm in 2008 from his previous post leading Juniper Networks‘ sales to all levels of government and education customers as vice president of Public Sector Americas.
At LexisNexis, Talcove’s organization uses tools featuring data, analytics and algorithms to combat criminal entities working to defraud federal programs and systems.
He spoke with ExecutiveBiz about structuring his organization around its four target markets, what we don’t know about future criminal activity, and utilizing a ‘rapid and agile’ development process to respond to new threats.
ExecutiveBiz: What was the opportunity with LexisNexis that made you want to join the company?
Woody Talcove: It’s really interesting. When I started at LexisNexis almost six years ago, the business was based around selling what we call ‘accurate seats’ to primarily help law enforcement locate individuals and identify relationships amongst individuals. The business has really changed considerably over the past six years.
We’ve evolved into a company that applies data, analytics, public record content, and other tools to stop people from stealing income taxes, to stop people from stealing social services, to stop people from taking advantage of our democratic systems, and to fight terrorists in a way that we never thought was possible.
ExecutiveBiz: What are your main areas of focus?
Woody Talcove: Our market has changed substantially. Working in the government market over the past three or four years has been really hard, because budgets have been challenged. So, part of what we did to help our customers was create these efficiency-generating solutions, primarily in two areas.
The first area is in tax and revenue. There isn’t a day that goes by that there isn’t a story out there about identity theft.
Lexis has a web page called fraudoftheday.com that has over 15,000 government subscribers, and that web page talks about how identify thieves are using identities to fill out tax returns at the federal, state and local levels, and we created a series of highly sophisticated solutions using algorithms and proprietary content that virtually eliminated that problem for our customers.
To date we’ve saved our customers over $500 million.
The second area is in social services. And again, it’s the same concept. A person applies for benefits that really isn’t a person. They’re using a synthetic identity or they are using a stolen identity. We use our tools, technologies and algorithms to ensure that they can’t get access to those benefits because they’re not entitled to them.
Part of the reason why these solutions have worked so well in the marketplace is the government market shifted five-to-seven years ago. In the old days, if you wanted to get unemployment insurance, if you needed to get food stamps; you filed a tax return. You usually did it by hand and then you went to an intake office then you mailed it in.
Government became more efficient by putting things all online, and a lot of people process transactions online, and as a result this gave fraudsters an opportunity that they don’t have in the private sector, because the private sector has controls and processes in place.
What happened is these fraudsters have taken advantage of this opportunity and they’re stealing money at scale.
And it’s different for the agencies that provide social services or tax relief as they are set up to provide a benefit. They’re set up to do the right thing, to help people when they need the most help.
They’re not set up to deal with these organized criminal groups that infected these systems by taking advantage of the fact that they can manipulate identities to get benefits at scale.
ExecutiveBiz: Where are these criminal entities evolving their capabilities?
Woody Talcove: The biggest opportunity in the public sector, if I’m working in the private sector right now, is to make sure the systems are locked down via some type of identity proofing, because that’s where the fraud is happening today. Right now there are so many opportunities for criminals to take advantage of the systems and they’re going to do that for some time until that stuff is closed.
The other part of it is, what they’re going to do in the future? The answer is we don’t know. They are organized, they’re sophisticated, and they’re going to continue to figure out ways to exploit systems so that they can get money. These are sophisticated groups that are trying to steal at scale, and some of them aren’t even located in our country.
There was a congressional hearing about a year and a half ago where one of the congressmen said that the level of identity theft is equivalent to what crack cocaine was in the early 90s. That it is so ubiquitous, and so destructive, that government’s rules and regulations aren’t keeping up with it and are putting them at a disadvantage to these criminal organizations.
ExecutiveBiz: How do you align your internal resources and efforts to continually work to improve your capabilities?
Woody Talcove: Innovation is the most important thing as we’re not in a thin market anymore. We’re in an evolving market that is changing because how our customers deliver services is changing and how people are attacking them is changing.
In the old days, it might take 18 to 36 months to get a product built. Now, when a new exploitation comes out, we don’t have 18 to 36 months. We have like, 18 days because the amount of money that can be stolen.
So, one of the things that we’ve done is we created this rapid development, agile development process, so that we can get these products to market much quicker. We have been doing this for a long time and we have thought of a lot of these concepts before and we have tons of domain expertise here. We have seen all types of fraud, and as a result, we have these really smart people that work with our really smart developers, and we can get these things to market really quickly.
If you’re losing $50 million to a fraudster, how much is it worth to your organization to have a solution that stops it? That’s going to be pretty important. The world’s different now. When you’re selling this stuff, you’re really making a difference.
The key to it is being innovative. The key to it is going fast. The key to it is getting to these markets from a competitive standpoint before others do. The other key to it is work with great partners, like IBM who have staff that have incredible relationships with our customers.
The old world where you had a product that lasted 10 years, it’s over. Especially in our space. The cycles are going quicker and quicker and quicker.
ExecutiveBiz: What is Lexis’ position in the market and how do you differentiate yourself from your competitors?
Woody Talcove: There are a couple things that differentiate us. The first is our organization and our structure. We focus in several markets including law enforcement; social services; and tax and revenue. We’ve organized our marketing, subject matter experts, sales organization, and product development all around those markets. So, it’s a continuous feedback cycle.
Secondly, we have long and deep existing relationships within the market. We do business with virtually every single state, almost every government agency, and probably 75 percent of the local governments. They’re using our services on a daily basis.
As a result of all that, we understand how fraud takes place and understand how to use these new tools based upon data, analytics, and algorithms to stop it in a way that others don’t. Lexis was there when this market was emerging and we’re able to leverage that background and experience. Others don’t have that opportunity.
ExecutiveBiz: How does your current position continue the trajectory of your previous executive roles and what are you most excited about moving forward?
Woody Talcove: I started my career in telecommunications working with a company called Cabletron for a great guy named Craig Benson and I learned a lot.
This reminds me of telecommunications in the early 90s. This industry is just starting to figure out how data and analytics can be used to fight fraud, to make organizations more efficient, and to maybe find the cure to cancer, or to maybe find child predators who couldn’t have been found before.
This is the beginning. This is the next decade of where market opportunity is. And I’m just really excited to be in the middle of that opportunity because there isn’t a day that goes by that someone doesn’t come into my office and give me what I think is just a phenomenal idea.
Something that we can take into the market that will help our customers, protect their assets or maybe save a life or stop money from going out to people that don’t deserve it. I mean, it’s just beginning.
It’s been a really tough economic time in the market, but because of these innovative new solutions we’ve developed and the ones that are in the works, we’ve been able to go grow, and I’m really proud of that.
We’ve been adding head count, we’ve been making investments in product development, we’ve been making investments in salespeople, and we’ve been making investments in the business because what we’re doing is really helping our customers in a way that’s helping them with their own economic challenges.