Fraud & Security How to Help Customers Avoid Vishing


Vishing is a real problem, with often the most vulnerable customers being exploited. Targeted communication in order to defraud individuals, often using the trust banks have spent years to build, can be achieved with little more than a phone number. In a recent article published on the BBC, the Financial Ombudsman Service (FOS) said that banks are not responsible for any vishing-related losses in approximately two-thirds of cases. In 63%, targeted victims have been left without compensation, being deemed to have simply given their money away. For banks, good news from a liability perspective can be a real headache when it comes to customer interaction. There will always come a time when customer engagement is necessary to confirm abnormal activity, and to protect accounts from potential abuse. But with customers being told they’ll probably be held liable if the interaction turns out to be vishing, what can you do to... [Read More]

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Analytics & Optimization Can All Sides Win the Pension Reform Battle?

NAV Graphic

In the US, pension reform is one of those topics that, like abortion and gun control, have people from all backgrounds and belief systems gesticulating wildly and arguing endlessly. Take this recent article about pension reform in New Jersey, where both sides accuse the other of either not making enough concessions (the unions), or reneging on their promises (the government). While the fiscal realities of this era ultimately force a move to some point between the axes, supporters and detractors will fight for every last inch until the deal is done – and even then, parting with a sense that they will be back to the negotiating table the next time around. In fact, anywhere in the world where increased life spans strain pension funding coffers, the debates can be as boisterous as what Americans have come to expect. The government of Norway realized it had a longstanding problem that... [Read More]

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Fraud & Security How Much Is European Card Fraud Rising?

Map of Europe showing card fraud loss rises and gains

Heightened awareness of card fraud has undoubtedly brought consumers into the fight, teaching them to be more careful with their PIN entries. But it may also have led to the perception that card fraud is out of control. In fact, card fraud growth across Europe is not high, as new data from FICO and Euromonitor International shows. Our new white paper on European card fraud shows that, across the region, card fraud rose just 6% last year. In the UK, card fraud losses rose by £29 million in 2014, also a 6% rise. Of course, that’s not the end of the story. Some countries fared far better than others. And even in the UK, the low overall rise masks large shifts in so-called “cross-border” fraud, where criminals use data on cards from one country to commit fraudulent transactions in another country. In the UK, FICO previously reported a 25% increase... [Read More]

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Fraud & Security Big Changes Ahead for Cyber and Fraud Teams


At the recent FIS International Client Conference in Vienna, I spoke in two sessions, one on cybersecurity analytics and the other fraud analytics. Interestingly, there were notable differences between the two conversations. At the cybersecurity session, it was clear that many banks now view cybersecurity not as an IT function, but rather as a financial risk (like fraud) that rolls up to the CRO. I reviewed several FICO streaming analytics technologies, which work together to monitor the network for early signs of hacker or malware reconnaissance. These analytics include transaction profiles of client and server IPs that monitor FLOWS, DNS, DHCP and Websecurity events, as well as FICO’s multi-layered self-calibrating analytic models and adaptive models that produce a score from 1-999 to rank-order cybersecurity threats. Many in the cybersecurity session were unaware that the fraud sides of their businesses had been using FICO’s real-time self-learning analytics for years. They were... [Read More]

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Risk & Compliance Model Risk 101: Fortify Your Three Lines of Defense

Model Risk 101 Chalkboard #1

As banks use increasingly more analytic models in their decisions, regulators are asking increasingly more probing questions about them – specifically, how these tools are being leveraged for risk management, capital requirements, customer decisioning and other activities. Regulators demand transparency, consistency and comprehensive documentation around areas such as model design, data quality, sample construction, model validation and risk policy reviews, just to name a few. Stress testing and capital adequacy reviews pressure banks to address the “new normal” of additional scrutiny and increased demand on their analytic resources and systems. Collectively, banks need the processes, people and technologies to enable comprehensive model risk management – similar to how an organization would architect a comprehensive risk management program to support all aspects of their day-to-day operations. Some leading banks are focusing on how to best use their scarce resources to help ensure checks and balances are in place to drive the... [Read More]

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Collections & Recovery Collections 101 – How to Outsmart Your Agency Placement

Chalkboard for Collections 101

Remember when things were easy? Me neither, but it sure seems like they’re getting more complicated. Sometimes, things seem so complicated you just want to ignore them. That brings me to today’s topic — optimization. I know that’s a ten-dollar word that analytics companies like to throw at you as the answer to all your problems. A lot of agents ignore it because it just seems too complex. But they’re missing the boat. Let’s take debt placement. As my colleague Carol pointed out in her last post, first-party accountability for third-party debt collection agencies is growing. Today there’s more at stake than just how much money you can collect or recover — business reputations are on the line. This makes picking the right agency for your debt more important than ever. And that’s where optimization comes in. A lot of firms don’t even look at optimization because of the expense.... [Read More]

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Risk & Compliance Video: Global Lessons from US Credit Scoring History

Global Credit Scoring Video 2

Airing on the ABS-CBN News Channel (ANC), television show “On the Money” covered the history of credit scores in the US, and explained how adopting similar measures in the Philippines would help grow its economy and responsibly expand consumer credit access. The video includes an interview with FICO’s John Hadlow. View the video “Why your credit history matters.”

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Analytics & Optimization Video: How We Built the FICO Analytic Cloud

Red Hat Summit

Last month, at the Red Hat Summit, our Cloud engineering team gave a presentation walking through the technology we used to build the FICO® Analytic Cloud. Below is the video from the talk. We developed the FICO Analytic Cloud using Red Hat’s portfolio of products, such as OpenShift by Red Hat, Red Hat Enterprise Linux OpenStack Platform, Red Hat CloudForms, Red Hat Enterprise Linux, Red Hat JBoss Middleware, and Red Hat Ceph Storage. Thus, why we were invited to the Red Hat Summit. In the video, the team describes how this technology has helped drive more than US$10 million in sales in a short timeframe, winning business from companies that otherwise couldn’t have afforded the time or cost of implementing our sophisticated analytics solutions. Using the Red Hat technology, we reduced infrastructure operations staffing by 20 percent, saved hundreds of thousands of dollars in hardware costs, and improved time to market by 70... [Read More]

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Risk & Compliance The Impact of Medical Debt on FICO® Scores

Medical Collections - Banner Image

Recently, 31 states announced a joint settlement agreement with the three major credit bureaus regarding changes to the reporting and treatment of consumer credit data, including medical debt. The handling of medical debt is an extremely important issue as the adoption of FICO® Score 9 gains traction. As we explained in a prior blog post, FICO® Score 9 introduces two noteworthy changes in the way the FICO® Score assesses collection information (i.e., information about credit accounts that have been sent to third-party collection agencies), including medical collections. First, FICO® Score 9 disregards all paid collection accounts. Second, FICO® Score 9 differentiates between unpaid medical collections and unpaid non-medical collections. These changes were implemented based on extensive research showing they would improve the score’s predictiveness. Given the tremendous interest in medical debt, it’s worth taking a closer look at these two decisions. Ignoring Paid Collection Accounts As we prepared to develop... [Read More]

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Analytics & Optimization FICO World Goes to Washington

FICO World 2016

FICO™ World is the biggest event on the FICO calendar. And today we announced that FICO World 2016 is coming to Washington, DC, April 26-29, 2016. More than a thousand professionals in financial services, insurance, retail, government and other industries will be descending on the Washington Hilton to learn and exchange information about the latest strategies, technologies and ideas for applying analytics and decision management to business challenges. Do you want to be part of the action? One way to get to go to FICO World is by getting a talk accepted. Check out our call for session proposals which has just been announced. We are now accepting speaking proposals on topics including analytic innovation, decision management, fraud, cybersecurity, credit scoring, customer management, debt management, mortgage lending, regulatory compliance and small business lending. Preference will be given to session proposals submitted by August 14. We hope you can join us in Washington, DC.... [Read More]

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