How Novo reduced unauthorized disputes by over 90%
Novo is a comprehensive financial platform built for small businesses, helping them manage operational expenses, access faster payments, and grow with confidence. A multi-time honoree of the Inc. 5000 list of fastest-growing companies and Forbes Fintech 50, Novo has served more than 250,000 small businesses and processed billions of dollars in transactions. For Novo, trust is not just a feature — it is a core part of the value proposition they deliver to their customers every day.
The challenge: Industry-standard fraud performance was not good enough
Like any fintech, Novo understood that onboarding and user activation are critical to growth. But the tradeoff between user experience and fraud performance is a delicate one. Too much friction damages growth. Too little damages trust.
Before working with Sardine, Novo met fintech industry-standard volumes of disputes and chargeback-related fraud losses. To better protect their customers, the team increased two-factor authentication challenges and added card friction. While this helped reduce fraud, it came at a cost: false positive rates climbed and legitimate transactions were being blocked.
The default resolution for a false positive was a call to customer support, creating time and cost burdens for both Novo and its small business customers. That kind of friction is an unwelcome interruption for a business owner trying to manage their day.
"A lot of companies put security cameras at the front door [account opening] and the back door [payment screening] but if a thief breaks into your house wouldn't it be great to know what they're up to? Would it also be great to know what good users do inside the house so you had a baseline of what good and bad looked like?"
Novo believed their small business customers deserved higher levels of security and fraud protection, without the friction that typically comes with it.
Why Novo chose Sardine to raise the bar on fraud prevention
Sardine's approach offered something meaningfully different: the ability to add targeted friction only where it was needed, rather than applying broad controls that affected everyone.
Rather than blocking suspicious transactions outright, Sardine recommended adding step-up friction such as SMS approval or OTP verification to potentially fraudulent card transactions. This allowed legitimate users to immediately confirm valid transactions in the moment, rather than facing a hard decline with no recourse.
Beyond the transaction layer, Sardine's device intelligence and behavioral biometrics gave Novo visibility into user activity across every touchpoint, from account opening and account funding through to ongoing transaction monitoring. For the first time, Novo could monitor behavior outside of discrete transactions, identifying signals that were both good and bad, and acting on them in context.
The platform also appealed to Novo's in-house data engineering team. Sardine is built to give technical teams direct access to machine-learned features, signals, and models, enabling Novo's fraud and ML talent to enrich their own internal models with Sardine's data rather than operating in a black box.
"The basic fundamentals of data infrastructure and modern warehousing is the thing that unlocks all of the behavioral biometrics and other cool stuff we talk about in fraud prevention."
The solution: Behavior-based intelligence across the full customer journey
A key differentiator for Novo was Sardine's ability to monitor the full user journey, not just individual transactions. By deploying device intelligence and behavioral biometrics at account opening, account funding, and transaction monitoring, Novo gained a continuous, context-rich view of its customers. Suspicious behavior could be flagged and acted on at the right moment, and legitimate customers could be identified and cleared just as quickly.
The step-up friction approach transformed how false positives were handled. Instead of blocking transactions and routing customers to support, Novo could now prompt a quick OTP or SMS confirmation, letting real customers verify themselves instantly and continue without disruption.
Sardine's rule engine also gave the fraud team a meaningful operational edge.
"My favorite feature of Sardine is that I can create a new, complex rule set to try and catch a new fraud pattern, I can then test that against the last 30, 60 or 90 days to see how it would have performed. Then, if I like it, I can push it to production instantly. That's game-changing."
The results: 90% reduction in disputes and best-in-class chargeback performance
Since implementing Sardine, Novo has achieved a best-in-class chargeback rate on debit cards, beating industry benchmarks and reducing unauthorized disputes by more than 90%.
Critically, those gains did not come at the expense of customer experience. By replacing hard declines with targeted step-up challenges, Novo now recovers 84% of previously blocked transactions, turning what were once false positives into confirmed legitimate sales.
Operationally, the fraud function evolved alongside the product. With access to richer data and faster tooling, Novo's team shifted from reactive investigation toward a more proactive, intelligence-driven approach, one that scales with growth rather than creating headwinds against it.
Building a fraud function that stays ahead of emerging threats
Novo's fraud capability is now a competitive advantage, not just a cost center. As AI-driven fraud techniques grow more sophisticated, the team remains clear-eyed about the threat landscape.
"The scale, quality and sophistication of phishing, identity masking and deep fake attacks has increased dramatically in the past 12 months since the rise of Generative AI. It is now trivial to create a believable deep fake that can pass selfie and liveness checks used at account onboarding and for KYC. This is a threat we're hypervigilant to."
The response to that threat is machine learning, not just rules.
"Machine learning is a different class of technology sometimes confused with Generative AI, yet it has proven remarkably successful in detecting these new attacks."
Novo's in-house data engineering expertise, combined with access to Sardine's machine learning feature store, means the team can continuously improve its own models using the richest possible signals, detecting non-human behavior and device usage patterns that legacy tools cannot see.
A partnership built for continuous improvement
One of the most important factors in Novo's success has been the nature of the partnership itself. Sardine ships hundreds of new features every month, always in collaboration with customers. New capabilities like Auto Disputes, which pulls together structured evidence for chargeback disputes automatically, reflect the kind of ongoing investment that keeps the platform ahead of evolving threats.
For Novo, that alignment matters. Long-term performance depends on partners who share outcomes and remain invested in getting better over time.
What's next: Scaling world-class fraud performance with growth
As Novo continues to grow, the team knows that complacency is not an option. Looking ahead, Novo plans to deepen its use of Sardine's platform across additional use cases, continuing to leverage machine-learned features and behavioral intelligence to stay ahead of emerging threats while keeping the experience seamless for the small businesses that rely on them every day.
Takeaway: Better fraud performance and better customer experience are not a tradeoff
For fintechs navigating the tension between fraud prevention and user experience, Novo's results make the case clearly: with the right data and the right platform, you do not have to choose.
Broad controls and hard declines protect against fraud losses but create a different kind of damage, lost customers, lost trust, and lost revenue. Sardine's behavioral intelligence and targeted friction approach allowed Novo to raise the bar on both fronts simultaneously, achieving dispute reductions that far exceed industry benchmarks while recovering the vast majority of transactions that would previously have been blocked.
"The way to continue to find the delicate balance is partnership. It's critical to reach outside the walls of your organization to improve performance and grow."
