With billions of dollars, corporate reputations and valuable customer relationships at stake, outsmarting fraudsters is vital to banks.
Using  SAS Fraud Management –  a comprehensive, analytics-based enterprise fraud management system featuring real-time scoring of accounts, including purchases, payments and nonmonetary transactions – banks can better detect, prevent and manage fraud across multiple products, lines of business and channels.
The latest SAS Fraud Management version, from the leader in business analytics software and services, provides faster, more versatile and accurate enterprise fraud detection. Enhancements include an integrated application programming interface (API), superior rule management configuration, increased operational management and true real-time transaction scoring all built on advanced, patented SAS Analytics.
“Real-time transaction and behavioural monitoring is critical component of Internet fraud prevention due to the increased ability of fraudsters to compromise an authenticated session,” says George Tubin, senior research director for TowerGroup.
“This will be especially important as financial institutions are getting prepared for pending updates to the Federal Financial Institutions Examination Council (FFIEC) authentication guidelines.”
“The next version of SAS Fraud Management is already being used in our Asia operations and we are confident that with SAS, we have the best anti-fraud models the marketplace can offer right now,” says Derek Wylde, head of group fraud risk, global security and fraud risk for HSBC.
“The proof is in our fraud numbers – our detection rates are up and our false-positives are down – which continue to meet our aggressive goals.”
With assets of approximately US$2,6-trillion, HSBC Holdings is one of the world’s largest banking and financial services organisations, serving more than 95-million customers through 7 500 offices in 87 countries and territories.
A development partner with SAS since 2007, HSBC deployed SAS Fraud Management as the foundation for real-time fraud detection and ongoing fraud management across its global network. SAS helps HSBC reduce global losses from fraudulent transactions and rapidly changing threats.
HSBC uses SAS Fraud Management in the US, Europe and Asia, protecting 100% of credit card transactions in real time, and will expand to encompass fraud across multiple lines of business and multiple sales channels.
“We’ve seen quite exceptional improvements that exceeded the results we achieved with previous systems,” says Wylde.
“SAS is committed to ensuring that HSBC continues to have a leading-edge anti-fraud solution. We are very pleased with the results. Fraud analytics can bring significant benefits, and that’s certainly been our experience with our partner SAS and the SAS Fraud Management software.”
SAS Fraud Management is an integral component of the SAS Enterprise Financial Crimes Framework for Banking. With its integrated API, SAS Fraud Management has improved its real-time processing to deliver alerts for key products and channels, especially emerging entities such as automated clearing house (ACH), wire, phone and Internet banking, and broker surveillance.
Financial services firms can more quickly and aggressively monitor and detect emerging fraud threats, whether a simple attack through a single channel or an organised assault across multiple channels aimed at stealing millions of dollars.
For example, “money mule” and the Internet “Zeus Trojans” attacks – a malware virus that has infected more than 2 000 financial institutions computer systems and more than 3-million consumer PCs in the US – can steal account credentials.
The fraudster contacts a call centre to get access or open accounts, and then wires money overseas or to other domestic accounts. This scheme, relatively small incidents of high monetary value, can go unnoticed unless an organisation proactively monitors accounts holistically and across multiple types of payment channels.
SAS recently received patent approval for “Computer-Implemented Data Storage Systems and Methods for Use with Predictive Model Systems” for analytic technology in the new version of SAS Fraud Management.
The software can intelligently store raw information in signatures, which captures the history for different types of entities (such as card, account, customer, terminal ID or IP address) involved in transactions, amplifying accuracy in detecting customer behaviours that fall outside the norm during point-of-sale (POS) transactions.
This information can be used by multiple predictive models, for fraud detection and credit risk assessment.
This analytic technology and SAS’ patented enhanced neural network modelling methodologies are behind the performance of the SAS fraud models that provide superior protection to card issuers and customers.
“The ability to store intelligently chosen raw data for multiple entities is key to addressing many fraud and risk problems effectively,” says Revathi Subramanian, primary patent inventor and R&D director in the SAS Fraud Modelling Department.
“SAS’ innovation is very exciting not only from a technology perspective, but also in terms of the benefits to the financial industry.”
The new release also delivers superior rule management configuration to monitor and track historical behaviour patterns at different entities based on business needs. The multi-organisation configuration helps a financial institution deploy and manage the enterprise solution to break down organisational silos.
When paired with SAS’ patented advanced analytics, SAS Fraud Management significantly reduces the number of false positives. Customer service becomes more efficient by reducing delayed transactions. Through better use of staff for alert management, organisations realise greater operational efficiency while having fewer false positives saves time and enhances customer experience.