SAS and HSBC have developed a new real-time card fraud detection system
LONDON – SAS and HSBC have launched a new card fraud detection system that promises to cut card crime by analysing all transactions for potential fraud in real time.
SAS has developed the Fraud Management system, code-named Raptor by HSBC, in partnership with the global bank. The system is in operation in the US, and benefits have already been seen in the short time it has been in place. There has been an 87% increase in the number of data items processed, with a corresponding reduction of 12% in the mainframe processing overhead. This has resulted in a 53% decrease in the mainframe processing cost for each data item, according to HSBC and SAS. The new system has also achieved a 30% decrease in the computing resource cost of processing card transactions flagged as potentially fraudulent, and a 10% increase in efficiency by agents investigating potentially fraudulent cases, when compared to the proprietary case management system. The replacement of the three previous software applications has also helped to reduce IT support costs.
SAS claims Fraud Management improves fraud detection, lowers false-positive rates and increases case-handling efficiencies, while enabling HSBC to uncover fraudulent transactions more quickly and with greater accuracy.
One of the most exciting aspects of the enhanced analytics used in this system is its potential to expand to all payment methods, including internet, phone and mobile phone banking. Also, because the system allows the bank to build up a better, more complete picture of the customer, it also has the potential to be used as an accurate and efficient marketing tool. This added benefit is likely to appeal to banks that are eager to leverage benefit from compliance-led initiatives such as fraud prevention.
Derek Wylde, head of group fraud risk at HSBC, says: "Our success with this partnership and with SAS Fraud Management shows that SAS understands and shares in HSBC’s long-term goals and can work with us to deliver improved solutions. In a constantly changing fraud environment, SAS technology helps us keep ahead of criminals. We believe the SAS solution takes us a significant way forward in our fight against fraud."
"SAS is proud to have produced, alongside HSBC, a system that will truly change the landscape of transaction fraud detection across the financial services industry," says Jim Goodnight, CEO of SAS.
"SAS Fraud Management enables banks to continually adapt to the ever-changing fraud situation in order to improve the protection of banks, businesses, and customers. This system could revolutionise how the industry tackles fraud now and in the future."
SAS Fraud Management has been adopted as the exclusive transaction fraud solution across HSBC’s US credit card operations. It is now being implemented in the UK and Asia.
More on Regulation
Banks chase 5.2 million customers who are still to complain
Regulator announces reforms in response to financial crisis failings
Matherat to Deutsche, O'Malia to Isda - regulatory moves worry some
Record-breaking settlement between Bank of America and US federal and state entities
Sign up for Risk.net email alerts
Watch highlights of this year's London conference
Operational risk and the challenges of defining and dealing with conduct risk
Watch discussions and speakers from our North America conference
In the February 2014 editorial video, OpRisk's latest industry survey finds room for improvement in risk management
There are no comments submitted yet. Do you have an interesting opinion? Then be the first to post a comment.