Switzerland is often seen as the ultimate bastion of financial security when it comes to banking and vaults; however, payment cards need protection too, and UBS and Fico think they have cracked the solution. Patrick Brusnahan writes
Switzerland averages two payment cards per inhabitant, according to GlobalData. And with an 8.6 million strong population, that is a decent number of products to keep secure.
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PostFinance has the largest share of debit cards in the market, with 3.08 million in circulation and a transaction value of CHF22bn ($21.6bn) in 2018. Following PostFinance is Credit Suisse with 1.64 million debit cards in circulation and a transaction value of CHF11.7bn, and UBS with 1.46 million and CHF14.1bn.
Credit cards are different, though. UBS holds the highest in circulation in Switzerland with 1.58 million cards and a transaction value of CHF11.3bn over 2018. Credit Suisse has the same number of credit cards in circulation, but with a slightly lower transaction value of CHF10.6bn.
One thing reducing the amount of fraud write-offs per compromised card is the UBS Card Centre, which processes roughly 25% of all credit cards in Switzerland. It utilises the Fico Falcon Platform, a solution that currently protects approximately 2.6 billion payment cards worldwide.
In 2018, the processor successfully stopped 84% more fraudulent transactions than in 2015. This was attributed to leveraging the latest AI and machine-learning capabilities of the Fico Falcon Platform, aided by the Fico Fraud Predictor’s adaptive analytics. Fraud experts at UBS used free-form writing within Fico’s technology to create complex rules.
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By GlobalDataThese deployed both the AIenabled Falcon Fraud Score and innovative adaptive analytics to fine-tune the neural network models in Falcon. Furthermore, these custom rules, added with the analytics, were the best way to improve false-positive and fraud-detection rates. A new approach was also attached. For the first time, the Card Centre directly declined transactions that appeared to be fraudulent, rather than creating an alert to be reviewed by the customer.
As a result, UBS was able to manage far more fraud cases, while also saving on manpower and costs. Only if there is further fraudulent activity will a customer be contacted after an alert.
Thanks to this, the UBS Card Centre managed a 42% increase in fraud cases without bringing in more resources. Losses were kept low, as were false positives, and customer satisfaction remained high.
Fico across the globe
It is not just in Switzerland where Fico is aiding security; the firm has a global reach. After adopting Fico’s Blaze Advisor decision rules management system, African Bank’s strategies were launched 35% faster and at 25% lower cost.
That, however, was just the first test; now, Vere Millican, group executive – credit at African Bank, believes it is “close to double those numbers, especially in terms of speed”. African Bank looked for a working partner after realising it was “inflexible from a change perspective”.
The South Africa-based firm approached various vendors, including Experian, but Fico won it over. Millican explains: “Firstly, Blaze Advisor, as an architecturally sound piece of software, was far superior to us, and it met our needs.
“Secondly, from the start we were not treated like another client. They took the time out to listen, and there was never a huge sales pitch. That’s when you start building trust, when they treat you as a partner rather than a client,” he adds.
“We’ve received a massive amount of support from Fico to deliver this product. It was just superior to any other engagement I’ve had with a third-party system supplier.”
Elsewhere, Belgazprombank in Belarus adopted Fico’s Tonbeller solution. Belgazprombank executive director Irina Kalechits says:
“Our process for choosing Fico Tonbeller was complex. It should be noted that the software was chosen on a competitive basis. What worked in favour of Fico Tonbeller were the quality of its solutions, how those solutions matched our requirements, the company’s reputation and its considerable experience in working with AML solutions.”
The Belarusian lender turned to Fico, but it was not the only option on the table. In the end, two solutions were selected: Siron@ Embrago and Siron@KYC, which perform both online checks and retrospective analysis.
Both parts are built on a single database and share access to downloaded or external and internal lists, such as National Bank lists and the Dow Jones database. Information about high-risk customers is also available, enabling Belgazprombank to identify and analyse transactions more accurately.
