FICO's tools to fight financial fraud

Financial fraud is a serious threat to banks and financial institutions worldwide. As technology advances, fraudsters find new ways to circumvent security systems, making financial monitoring and fraud protection an important aspect of modern banking. Fraud detection has become more challenging as transaction volumes increase and new digital solutions are introduced.

FICO, a leader in data analytics and artificial intelligence, offers innovative tools to help fight fraudsters. Its anti-fraud solutions ensure banking security through real-time risk assessment, transaction analysis, and behavioural analysis.

What is FICO and its main anti-fraud products?

FICO is a leading analytics software company that has helped businesses in more than 90 countries make better decisions for more than 60 years. Its products transform industries by using big data and mathematical algorithms to predict consumer behaviour, manage risk, fight fraud, optimise operations and comply with regulations.

Key products include the FICO® Score, the standard for assessing credit risk in the United States, and FICO® Falcon® Fraud Manager, which provides effective fraud prevention across payment processing channels. FICO makes extensive use of cloud-based technologies and open-source standards, enabling flexibility, rapid deployment and lower costs.

With advanced technologies such as predictive analytics and business process management, FICO helps organisations improve the accuracy and agility of their decisions. The company serves more than half of the world's top 100 banks, leading insurance companies, retailers and all the top 100 credit card issuers in the United States.

FICO works across many industries, including financial services, healthcare, insurance, telecommunications, retail, pharmaceuticals and others, influencing billions of business decisions annually.

Let's take a closer look at FICO's fraud solutions.

FICO's main products for combating financial fraud:

1. FICO® Falcon® Fraud Manager. This is a powerful fraud detection and prevention solution that provides comprehensive customer protection and minimises financial loss across all channels. Using innovative artificial intelligence (AI) and machine learning technologies, the system can detect fraudulent activity in real-time, ensuring maximum efficiency on a global scale. Falcon Fraud Manager is a leader in its segment, having been recognised as a leading fraud detection solution in the Chartis RiskTech Quadrant for Enterprise Fraud Solutions 2023 report.

Key features:

• Broad coverage. Falcon Fraud Manager protects more than 65% of the world's card accounts, making it one of the most comprehensive solutions on the market.
• Multiple channels. The solution supports fraud detection not only for credit and debit cards but also for digital payments such as P2P applications (e.g. Zelle, Venmo, CashApp), account-to-account transfers and international bank transfers.
• Reduce false positives. Falcon Fraud Manager improves the accuracy of the fraud detection system, ensuring the best possible customer experience and reducing the negative impact on financial institutions' reputations.
• Innovation. The system holds more than 100 AI and machine learning patents, giving it a competitive edge in fraud detection.
• Adaptability. The solution allows for flexible rule customisation and rapid implementation of pre-built models for different portfolios and geographies, enabling rapid response to changing fraud schemes.

With FICO® Falcon® Fraud Manager, financial institutions can offer their customers a high level of protection, improve the customer experience and reduce the risk of fraud by implementing the most advanced fraud detection and prevention technologies. The system not only reduces financial losses but also increases overall customer confidence in financial institutions, helping to strengthen their reputation in the marketplace.

2. FICO® Card Alert Service is an innovative debit card fraud risk identification service. The system uses powerful big data analytics to help financial institutions identify suspicious transactions in their ATM and POS networks. The service was developed in response to the growing threat of debit card fraud, including ATM attacks and counterfeit cards.

Features:

• Protect customers from counterfeit card fraud. FICO® Card Alert Service uses powerful predictive analytics to identify cards that may be at risk of fraud, including those subject to skimming attacks or fraudulent transactions at POS terminals.
• Daily monitoring of payments on EFT networks. The system analyses transactions in real-time, covering more than 60% of the US transaction volume. This allows us to detect suspicious activity early and prevent potential losses. 
• Timely reporting for card blocking and reissuance. Once suspicious transactions are detected, FICO quickly provides reports on compromised cards, enabling financial institutions to block and reissue cards, preventing significant financial loss.
• Support for fraud teams through the dedicated FICO Fraud Alert Network. This network provides a secure environment for financial institutions and law enforcement to share information and respond quickly to fraudulent activity.
• Prevent debit card fraud with early detection. FICO Card Alert Service detects compromised POS terminals and ATMs with potential skimmers, minimising the risk of fraud before it becomes apparent.
• Round-the-clock monitoring. Network activity is monitored around the clock and has been for over 25 years. Users receive same-day reports of suspicious activity, allowing them to respond to potential threats promptly.

The FICO® Card Alert Service provides timely identification of compromised cards and breaches, reducing the risk of financial loss and protecting financial institutions' customers. This service is the best defence against debit card fraud, helping financial institutions effectively combat fraudulent schemes and keep their customers safe.

3. FICO® Customer Communication Services is an intelligent, omnichannel digital communication management system that automates two-way customer interactions across voice, SMS, mobile apps, email, social media and other channels. The service is designed to improve customer communications in a variety of areas, including financial fraud management, debt collection, loan application processing and customer engagement.

Features:

• Intelligence. The system uses powerful analytics and machine learning to adapt to changes in consumer behaviour. This means FICO® Customer Communication Services can identify new patterns, helping to detect fraudulent activity and improve risk management.
• Omnichannel. The platform provides a single, integrated system for all communication channels. This allows organisations to communicate seamlessly with their customers, enabling consumers to interact through their preferred channels - be it SMS, email or social media. It is reported that 90% of incoming contacts are handled automatically, significantly increasing the efficiency of communications.
• Flexibility. FICO® Customer Communication Services provides customisable business rules, templates and scripts that allow organisations to tailor communications to meet specific business needs and requirements. This enables controlled experimentation with different communication sequences to determine the most effective strategies.
• Cloud-based solution. With cloud-based technology, FICO® Customer Communication Services offers scalability and minimal administration. Organisations can easily expand their communication capabilities while reducing infrastructure and management costs. This solution allows them to respond quickly to changes in demand and increase transaction volumes without significant hardware investment.

These features make FICO® Customer Communication Services a key tool for organisations looking to improve their customer experience, increase the effectiveness of their communications and adapt to new challenges in the digital world.

 4. FICO® Falcon® Compromise Manager is a fast and accurate fraud detection solution that identifies compromised terminals, ATMs and data breaches. It focuses on proactive fraud prevention to help financial institutions protect their customers and reduce financial losses.

Key features:

• Rapid fraud detection. FICO Falcon Compromise Manager uses powerful analytics to analyse billions of data points from the FICO Falcon Intelligence Network, a global network of more than 10,000 financial institutions. This enables rapid detection of compromised terminals and fraudulent transactions, reducing threat response times.
• Machine learning-based analytics. The system uses patented machine learning algorithms to prioritise risk for each potential threat. This allows financial institutions to not only detect fraud but also assess the level of risk, helping them to make informed decisions on how to proceed.
• Integration with Falcon Fraud Manager. Falcon Compromise Manager integrates seamlessly with Falcon Fraud Manager, enabling financial institutions to take operational actions such as blocking cards or monitoring suspicious transactions. This ensures seamless interaction between systems and rapid response to detected threats.
• Global insight for immediate detection and action. With data from more than 4 billion anonymised, tagged accounts, FICO Falcon Compromise Manager enables financial institutions to quickly identify compromised terminals and fraudulent transactions. This helps to protect customers before fraud causes damage.

This service helps to minimise losses and increase the security of your financial transactions by providing the following key benefits:

• Protect customers and cards before fraud occurs. Falcon Compromise Manager identifies potential threats early, enabling the fraud team to take action before fraudulent activity causes damage.
• Optimise credit card processing strategies. The system helps implement effective card processing strategies that improve the customer experience and reduce potential losses, including chargebacks.
• Leverage data for decision-making. With regular data updates, Falcon Compromise Manager enables financial institutions to identify when and where a card may have been compromised, helping them stay one step ahead of fraudsters.
• Ease of use for analysts. The system's intuitive interface allows analysts to streamline threat detection and take action on each affected card.

These features make FICO® Falcon® Compromise Manager an essential tool for financial institutions looking to protect their customers from fraud by reducing risk and improving security.

How FICO tools work in the fight against financial fraud

FICO tools take a comprehensive approach to fraud detection:

• Data consolidation. Gathering data from internal and external sources to create a complete picture. This allows you to detect the use of stolen or synthetic data.
• Machine learning analytics. Using algorithms to detect anomalies, such as falsifying information (e.g. income) to fraudulently obtain credit.
• Application and account monitoring. Continuous real-time analysis of user behaviour to identify 'sleeping fraudsters' or prevent 'spikes' in activity before large losses occur.
• Adaptive solutions. Building rules and workflows that automatically adjust to the level of risk. For example, identity checks adapt to a specific scenario, and case management includes prioritisation and automation.
• Simulation for improvement. Testing different strategies in a secure environment helps to select the most effective solutions, evaluate their impact and implement them without putting the main system at risk.
• Extending functionality. Use FICO tools not only to combat fraud but also for other tasks, such as credit scoring or combining information to create a single customer view.
• Expert support. FICO's experience working with a wide range of organisations enables us to provide best practice advice, accelerate solution implementation and help you get the most out of your investment.

This approach enables you to tailor fraud detection strategies to your specific needs, improving protection and reducing risk.

Key features of FICO tools

• Predictive analytics. Use of analytical algorithms to detect fraud.

• Large-scale data analysis. Identify connections between applications to detect organised group fraud.

• Identity verification. Integrate solutions to detect synthetic or stolen identities.

• Continuous Monitoring. Real-time transaction analysis for risk modelling and inactive fraud prevention.

Benefits of using FICO for financial institutions

1. Minimise losses. With early fraud detection, financial institutions can significantly reduce their financial losses.
2. Increase customer confidence. Secure financial transactions help build customer trust and loyalty.
3. Process efficiency. FICO tools help reduce the time it takes to process suspicious transactions and reduce staff workload.
4. Adapts to change. Continuously updated algorithms allow you to respond effectively to new types of threats.

Real cases of solution applicationFICO

Case Study: Mastercard's innovations in fraud prevention

Client: Mastercard

Challenge: leveraging advanced technologies to identify and prevent debit and credit card fraud.

Solution: integration of FICO® Customer Communication Services and FICO® Falcon® Platform solutions.

Results: by implementing the fraud protection platform, Mastercard significantly improved the customer experience and prevented millions of dollars in losses for its institutional creditors.

Case Study: Network International partners with FICO to simplify payments and prevent fraud

Client: Network International

Goal: simplify payments for customers in more than 40 countries across the Middle East and Africa, with a focus on fraud prevention.

Solution: implementing FICO® Falcon® Fraud Manager to manage fraud risk on a single platform.

Results:

• Ensured integration of multiple payment processing channels.
• Provided customers with tools to combat fraud using artificial intelligence and machine learning models.
• Increased flexibility and scalability of solutions in line with business needs and regulatory priorities.

Key approach: create a 360° view of the customer and optimise security for card and non-card products.

How to get started with FICO

1. System Integration. Select the right FICO product and integrate it with your banking platforms. FICO offers expert setup assistance.
2. Setting up modules. Tailoring the analytic modules to your business.
3. Testing. Conducting tests to verify the effectiveness of the system.
4. Support. Access to technical support and regular updates.

Conclusion

FICO is a leader in the fight against financial fraud. Its anti-fraud solutions help banks and financial institutions ensure the security of financial transactions and reduce risk. For four consecutive years, FICO has been recognised by Chartis as a leader in the Fraud Solutions category, recognising the company's innovative fraud detection, behavioural monitoring and powerful identity management capabilities.

With financial fraud on the rise, FICO is actively working to protect financial institutions' customers with innovative solutions. According to FICO research, 88% of consumers plan to increase their use of real-world payments, requiring even greater attention to security measures. Thanks to modern technologies such as artificial intelligence in cybersecurity and behavioural analytics, FICO is becoming the first choice for many businesses.

Find out more about FICO solutions and make your business more secure today! Contact the Solidity experts at info@solidity.com.ua.