FICO® Enterprise Fraud Management

© 2016 Fair Isaac Corporation. Confidential. This presentation is provided for the recipient only and cannot be reproduced or shared without Fair Isaac Corporation’s express consent.

Enterprise Fraud Management

Cindy WhiteSenior Director Product [email protected]


www.fico.com/enterprisefraud

http://www.fico.com/enterprisefraud


© 2016 Fair Isaac Corporation. Confidential. 2

Agenda

• Introduction • Recap Priorities for CROs• Need to Adopt Holistic View• How Do We Get There?• Conclusion


Fraud and Financial Crime Trends

535 million consumers acrossthe globe will make a purchase

via mobile this year.1

Account Takeover now attributes for

40% of eCommerce Fraud.2

US eCommerce fraud losses will increase to approximately $3.6

billion by 2018.3

Every two seconds,there is a new identity

fraud victim in the U.S.3

1Goldman Sachs2Forrester Research: eCommerce Fraud Management Solutions 2014 3 2015 Identity Fraud Study by Javelin Strategy & Research3 Forrester Research: The Forrester Wave: Enterprise Fraud Management, Q1 2016


Fastest-growing Channels Are Also the Ones Most at Risk

Online MobileTablet and Smartphone


The Million Dollar Question

So how then do webalance reduction of fraud losses with protecting customer experience?


Risk Officers Take on Diverse Challenges

CustomerExperience

Reduce customer

impact and include

consumers as an extra layer of

defense

Operational Efficiency Reduce my operating expenses through

automation, shared

capabilities and self service

FraudRisk

ManagementProtect my

organization and my customers from financial crimes while allowing my

business to grow

Compliance and Reputational

RiskHelp me to be

more compliant and reduce brand risk


Top Technology Incentives for 2016

1Respondents were asked how likely their firms are to work on this initiative and how confident they are in their firm’s ability to execute it in the next 12 to 18 months.Respondents ranked Likelihood and Confidence on a 5-point scale (5 = Extremely Important / Completely Confident and 1 = Not at All Important / Not at All Confident.)The graph shows the percentage of responses who selected 4 or 5 on the scale.n = 152Source: 2016 CEB Retail Banking Technology Agenda Poll; 2016 Retail Banking Leadership Council Agenda Poll.

86% 83% 79%70% 68% 68% 64%

47%45%

30%

Improving digital

account origination

and onboarding (i.e., online and mobile)

Using analytics for marketing and sales

Delivering useful

smartphone push

notificationsto customers

Upgrading the online banking

solution to handle more

complex customer

tasks

Using analytics for

fraud detection

Integrating customer

information siloes

Implementing next-

generation digital

authentication solutions

Selecting a mobile

payments platform

Modernizing core banking

systems

Working with start-up financial

technology companies

Likelihood and Confidence in the Firm’s Ability to Execute Key Technology Iniviatives1

Percentage of Retail Banking Executives, Global, 2015LikelihoodConfidence


How Can We Leverage What We Know Across New Channels?

Cards

Savings

Lending

Retail Banking

Customer

Organizations Need to View Customers in the Context of Their Entire Relationship


A Holistic Approach

Enterprise-widefraud management

Prevention

Detection

Resolution

ReputationRegulationCustomer ExperienceOperations


How Can We Leverage What We Know Across New Channels?

Decision Points

Savings

Lending

Retail Banking

Cards

Business Units Data WarehouseMarketing

AuthorisationsLimit

ManagementCollections

Fraud

Pre-delinquency

Re-issue

CustomerLevelData

Organizations Need to View Customers in the Context of Their Entire Relationship

Option 2


“What impressed us most, was that even as an industry leader, FICO has notbecome complacent, but continues to innovate.” CEB Tower Group

Innovative Analytics Solve Complex Problems Across the Enterprise

Neural network

Patented Profiling Technology

Outlier Models

Device Profiling

Analytics

Collaborative Profiles

Adaptive Analytics

Text Analytics

Behavior Sorted Lists


“FICO Falcon will helpmake our customers’everyday lives easier by improving security and protecting them against fraud.This is a milestone for us, our partners and our customers.”Freddy Syversen, Chief Executive Officer,

EnterCard, Nordic Card Issuer

Customer Opinion


Analyst Opinion

…This moves away from a ‘monolithic’ approach and focuses on providing channel- and business line-specific information to different users in a way that aligns to their use and management of the Falcon solution.”

“What impressed us most was that, even as an industry leader, FICO has not become complacent, but continues to innovate. It continuously evaluates and refines its strategy toward holistic enterprise fraud management…

Jason Malo, Research Director,Retail Banking and Cards Practice

CEB Tower Group


FICO’s Approach to Building the Holistic Solution

Fundamental• Agility• Integration• TCO

Infrastructure

Differentiation• New products• New services

Customization

Innovation• Channel specific• Dynamic• Customer

experience

Analytics


FICO® Falcon® Platform

ANALYTICSCUSTOMIZATION Infrastructure



Real time event monitoring and decision platform

Transactional payment processing and monitoring

Across channels:Payment and non-payment cards, deposits, mobile


FICO® Falcon® Platform Offer Details

What is included in the Base Falcon Platform?• Event Processing Engine (Falcon Scoring Engine)• Data Specification Support and Processing • Falcon Expert Rule Management Application• Falcon Programming Interface (FPI) to Interface with External

Systems• Standard UDV Profiling (Service, Account, Customer)• Reporting• Falcon Case ManagementWhat is NOT included in the Base Falcon Platform?Platform Modules • Analytic Models/Scores―consortium or custom models and

scores• Extended UDP Profiling (up to 10)Software Add-ons• Non Falcon Products (AFM, MMA, Etc.)• Adeptra, IRE, etc.Custom Solutions • Investigative Case Management, Simulation and Optimization,

etc.


FICO® Falcon® Platform Modules

Modules that can be deployed to run on the Falcon PlatformPackaged Consortium and Custom Analytic Modules• Analytic Modules—Credit, Debit, Direct Deposit

Accounts, Online Banking• Analytic Module Add-ons—Global Intelligent

Profiling, Fraud Predictor, Adaptive Analytics

• User Defined Profiles (profiles for merchants, IP addresses, etc.)

• Consulting Built Rule Sets


FICO® Falcon® Platform Software Add-ons

Software and tool add-ons that can be integrated with the Falcon Platform or run alongside the platform• IRE (Link Analysis)• Fraud Resolution Manager• Application Fraud Manager• Merchant Monitoring


FICO® Falcon® Platform Custom Solutions

Modules that can be built as complementary solutions or add-ons for use with the Falcon Platform• Custom Solutions• Investigative Case Management• Business Intelligence• Simulation and Optimization• Model Management



ANALYTICSCUSTOMIZATION Infrastructure


New Technologies Improve Customer Experience

Behavior Sorted ListsIdentify “favorites” in a cardholder’s favorite entities

AdaptiveAnalytical ModelSelf-learning models that understand changing patterns

Collaborative ProfilesIndividualized predictions, sensitive to collective behaviors

Self-Calibrating AnalyticsModels that don’tequire huge initial outlays of data

Product Technology• Adeptra Integration• Addition of Linux,

Tomcat and Couchbase


Benefits of Upgrading to the Falcon Platform

• Highest level fraud detection

• Wider fraud detection • Customer-level detection

Reduce Losses

• Total Cost of Ownership (TCO)—Single stack support for transactional fraud monitoring

• High performing stack with open source componentry

ROI

• Improved compliance and reputation management

• Customer-level fraud management

Customer Experience

• Budget certainty• Simplified contract • No volume limits

Operational Gains


1991 1996 2001 2006 2011 20150

5

10

15

20

Card Fraud

Year

Basis

Poi

nts

Falconintroduced

Fraud Analytics – Technology Underpinning

Percentage of credit card accounts in the

world that are covered byFICO Fraud Solutions

65%

The Nelson Report July 2015 Card Fraud Worldwide


Analysts Opinion

TONBELLER is complementary to FICO and provides a strong

strategic fit

2015

2016FICO is a leader in The Forrester Wave™: Enterprise Fraud Management, Q1 2016

2015Dominant Vendor in Enterprise Fraud Management Systems Market Update

A “Best in Class” Solution in Enterprise Fraud Management Technology Analysis’ Four Categories:• Fraud Detection• Workflow Management• Business Process Improvement• Enterprise Support

2015


Customer Opinion

“Our objective is to provide unsurpassed fraud protection to our customers. Falcon Fraud Manager gave us the real-time detection and it enables us to manage fraud for all customers’ cards from a single platform.”

Paul Mathias, Head of Fraud Risk ManagementABSA, South Africa


A Holistic Approach

Enterprise-widefraud management

Prevention

Detection

Resolution

ReputationRegulationCustomer ExperienceOperations


Thank You

Cindy WhiteSenior Director Product [email protected]


www.fico.com/enterprisefraud



FICO® Enterprise Fraud Management

Data & Analytics

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