Fraud & Security Securing Digital Payments with Less Friction and Fraud


At the grocery store the other day, I paid using ApplePay. With just a tap of my iPhone and a chipper (payments humor!) musical chime, my payment was accepted. A few seconds later, after touching a few buttons on the payment terminal screen, I was walking out the door. What just happened? I experienced two things: a frictionless digital payment, and a mild customer experience victory.* Bringing down, or rescuing, the house Best of all, I wasn’t dealing with the “swipe or dip” decision point, and I certainly wasn’t putting myself at risk for knocking out the store’s POS devices. (Check out the blog in the tweet below for another payment expert’s hilarious, deeply personal tangle with EMV.) Based on my newfound confidence from the grocery store, I then marched into the local CVS pharmacy, brandishing my iPhone near the POS terminal only to hear the cashier say, “Oh, are... [Read More]

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Customer Engagement Analytics That Fuel Loyalty – A Client Success Story

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We’ve been blogging about a Canadian grocer that is changing the game with its analytics-driven loyalty program. For its +9 million loyalty members, personalized offers are so relevant, it’s almost like having an old-fashioned relationship with the corner grocer. In this new-fashioned relationship, however, members can redeem their offers at more than a thousand stores of various types, in many locations across Canada. What’s this grocer’s secret to success? Here’s a peek inside the analytics. Understanding customers as more than strings of transactions Delivering a personally unique set of relevant offers every week on such massive scale is a computationally demanding, mathematically intense undertaking. The heavy lifting is performed by over 4,000 time-to-event (TTE) predictive models, generated and updated every four months by a FICO-built analytic “factory.” Each TTE model predicts the propensity of a customer to purchase a particular product — say, a specific brand of laundry detergent —... [Read More]

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Customer Engagement Case Study Spotlight: Thinking Differently About Loyalty

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Retail loyalty programs are ubiquitous and predictable — except in the Canadian grocery space. Here, a large retailer is changing the game, transforming what customers expect from loyalty programs and what retailers can accomplish with them. In 2013, when a major Canadian grocer was preparing to launch its first loyalty program, millions of Canadians already had loyalty cards from other grocers — yet grocery sales dropped 0.4% industry-wide. Clearly, there had to be a better way than the largely indistinguishable approach taken by competitors. The grocer decided to take a different path, turning to FICO for advanced analytics to fuel its loyalty program. Predictive and prescriptive analytics determine how to make the best use of available marketing funds. Instead of indiscriminately dispensing points for every dollar spent, the program gives offers and rewards to customers based on a multidimensional understanding of individual shopping behavior. Instead of cross-selling aimed at loading... [Read More]

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Analytics & Optimization Video: Protecting Drivers and Toyota with Optimization

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Ever wonder how Toyota Financial Services keeps 10,000 drivers from hurting their credit? When delinquencies spiked after the 2008 financial crisis, Toyota Financial Services realized it needed a markedly different approach to collections. As Jim Bander of Toyota Financial Services explains in the video below, the company turned to FICO prescriptive analytics and optimization, allowing it to become more flexible and scientific about collections decisions. Now, Toyota Financial Services can reach financially strapped customers sooner and have a conversation that makes a difference. The resulting benefits have been numerous, including helping many customers avoid repossession and stay in their cars, and preventing thousands from reaching a stage of delinquency that would affect their credit. For more information on this success story with Toyota Financial Services, read the following blog posts: Toyota Financial Drives “Data Science for Good” with FICO Analytics Toyota FS Wins InformationWeek “Best in Analytics” Award FICO Optimization Helps Toyota Keep... [Read More]

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Customer Engagement Facing the Facts: Are You as Customer-Centric as You Think?

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The late Steve Jobs did not have a monopoly on the reality distortion field. The truth is that we all live in one of our own creation. As human beings, we’re self-centered—we see the world through our own eyes, and that experience becomes our truth. But what is true for us might not be true for someone else. This can be seen in the massive disconnect between how companies see their level of customer centricity compared to how their customers see it. In a recent American Marketing Association report, here’s how marketers rated their company’s level of customer centricity: 76% of companies ranked themselves in the top two-fifths (61 and higher). Wow! Companies must be doing a great job of being customer-centric and providing outstanding customer experiences, right? Not so fast! Customers don’t rank companies nearly as well. In a July 18, 2016 blog post on, vice president and... [Read More]

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Fraud & Security European Fraud Trends Point to Online Payments Risk

European Fraud Map 2015

FICO has just published the interactive European Fraud Map infographic, based on data from Euromonitor International. The following is a guest post from Kendrick Sands, Senior Analyst – Consumer Finance at Euromonitor, on the trends shown for European card fraud in 2015. As a share of total card payments for the researched markets in Europe, total value lost to fraud declined from .08% to .06% from 2010 to 2015, reflecting innovation in card payment security. However, the method of value lost to fraud is shifting to target the transition to online retailing. The UK, Denmark and France were among the researched markets where the value lost to fraud as a share of total card payment value did not decrease and will benefit the most from additional security measures for card payments. The US$1.3 billion lost to fraud in these three markets in 2015 provides an incentive for merchants and issuers... [Read More]

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Fraud & Security “Humanware” Is the Weak Link in Cyber Defenses

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When FICO hosted the Business Continuity Institute Forum covering the South and East of England at our London offices last month, you might have expected technology to top the agenda. But what dominated the discussion among more than 40 business continuity and cyber security experts was not malware but “humanware” — that is, people. Social engineering remains one of the most effective ways to get past an organisation’s defenses. Most delegates had to concede that their business operations conventions probably led to inadvertent exposure. Look how easy it is: A common email address structure ( means a criminal only has to know someone’s name to target a successful mail. Outsourced IT support that routinely use remote access services to remediate staff IT problems means that staff are quite likely to permit “IT personnel” to access their systems. Visitor handling routines generally permit a well-presented and well-informed stranger to be provided... [Read More]

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Risk & Compliance How FICO Score Open Access Can Help Credit Counsellors

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More than 100 million credit accounts in the US are now getting free FICO® Scores from their lenders through the FICO® Score Open Access program. This program is helping consumers understand their financial picture — but how can it help credit and financial counsellors in their work with consumers? That’s where FICO® Score Open Access for Credit and Financial Counseling comes in. Through this program, credit and financial counseling providers in the US can share FICO® Scores they have already purchased — for example, for initial customer contact or for financial management plan review — with their customers with no additional score fees or program fees. (The sharing of FICO® Scores with counselling customers is otherwise not permitted by the credit bureaus or by FICO.) Knowledge about FICO® Scores may support a customer’s progress and commitment to more responsible financial health management, and reinforce behavior changes that last long after... [Read More]

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Fraud & Security UK Card Fraud Jump Is Largest in Europe

European Fraud Map 2015

Today we released our interactive European Fraud Map for 2015, showing card fraud trends for 19 European countries. The big news was the 18 percent rise in UK card fraud, largely driven by online transactions. The rise in UK card fraud equates to an additional £88.5 million lost. Some 75 percent (£66.7 million) of that increase was in card not present (CNP) fraud, and £42.4 million of CNP fraud came from e-commerce. The UK contributed about 43 percent of the total card fraud losses across the 19 European countries studied. Why was the UK’s rise so steep? My colleague Martin Warwick, who provided the commentary in the map, surmises that cyber crime and the theft of personal data was one culprit. But card issuers’ desire to make online shopping easy may also be playing a part. “We cardholders are very demanding, and if we don’t get what we want then... [Read More]

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Customer Engagement Why Is Customer Experience So Hard to Explain?

Customer experience hard to explain

When I tell someone what I do—customer experience consulting or customer experience management—the most common reaction is a nod. Sometimes the nod is accompanied by a murmured, “Mmmm…” But I’ve learned that, more often than not, a miscommunication has begun to take place. Customer experience is one of those topics that people hear mentioned and often think is something else. A lot of people think customer service, or customer support or simply being nice to customers. If I’m speaking with someone who knows something about design or product management or engineering, they might connect with user experience. And if they’re an executive who is concerned with better use of data to retain customers, then customer success may be what comes to mind. In actuality, customer experience is none of these things, but it encompasses all of them. While company leaders and employees often misunderstand what customer experience is all about,... [Read More]

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