Objective

Customers of a large North American bank were complaining about high false-positive rates in the banks’ payments fraud framework. The bank used a third-party decision tool to process or stop payments, supplemented with customized rules. The objective of the engagement was to reduce customer complaints and improve account fraud capture rates by revamping the system.

CRISIL's Solution

The CRISIL team started with a thorough analysis of the current system and results. It found:

• Decision scores were based on past transactions.
  
• Sudden changes in characteristics were not captured.
  
• Genuine transactions were tagged as fraudulent.
  
• Good profiles were built through seemingly genuine transactions.
  

Based on those findings, the team designed and implemented a new and enhanced system by:

• Developing new transaction rules for authorization and case management;
  
• Following segmentation approach for customization of rules;
  
• Reducing customer complaints and improving account fraud capture rates;
  
• Monitoring rules to modify parameters proactively.

Client Impact

• False positive rates for certain rules reduced by 30–50%.
  
• Changes in account fraud rate were minimal.
  
• Case management operations were reduced.
  
• Monitoring helped uncover new modus operandi quickly.
  

Questions

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