Itaú Uses FICO's Cloud Fraud Solutions To Avoid USD$20M/m in Losses

Largest bank in Latin America wins FICO® Decisions Award for cloud deployment

Defending a third of all credit cards in Brazil

Itaú Unibanco, the largest private sector financial institution in Latin America, has migrated its fraud management and customer communication to the cloud, helping it to avoid over USD$20M a month in fraud losses. FICO's cloud fraud solutions have delivered a 15 percent cost reduction per customer account and a 20 percent improvement in fraud detection for online transactions.

“Itaú manages approximately a third of all credit cards issued in Brazil,” said Ulisses Okamoto, Fraud Risk Management Superintendent at Itaú Unibanco. “We processed more than 3 billion transactions in 2021. When you are dealing with these sorts of volumes, any competitive advantage is worth pursuing, so we decided to move to the cloud to enhance the customer experience, increase security and reduce losses and costs.”

You can read more about this story in the full media release.

Looking to cloud for increased performance

Prior to the implementation, Itaú had been well-served for many years by FICO® Falcon® Fraud Manager on-premise but saw an opportunity to gain increased performance, agility, efficiency and cost savings by moving to the cloud. The project also allowed Itaú to compete more effectively during the pandemic.

“Fraud attacks across the Brazil market increased about 70 to 80 percent over the lockdown months,” said Okamoto. “This was considerable, given we are usually exposed to fraud levels exceeding three digits in terms of base points. FICO Falcon Fraud Manager and FICO Customer Communication Services were crucial in keeping the impact within our risk appetite without affecting the customer’s experience.”

Customer engagement is key

FICO® Customer Communication Services for Fraud (CCS) was chosen as the primary communication service for transaction confirmation, offering high-quality and frictionless digital self-service for the bank's customers. The use of CCS during the pandemic delivered substantially to the business results and critical indicators. There has been a 25 percent increase in CCS usage, which represents a significant jump in participation by cardholders in the resolution process. The bank now receives response rates above 40 percent for regular accounts and above 50 percent for premium accounts. Itaú also used CCS to offer a self-service solution for customers to confirm suspected fraud transactions through SMS and Mobile App Push notifications.

The combination of FICO® Falcon® Fraud Manager and CCS has also modernized Itaú’s approach to fraud by incorporating other advantages of the cloud, such as the ability to quickly update software and predictive models that capture current fraud risks. Itaú has also seen a significant increase in operational efficiency and reduced the risk of outages and timeouts with a 24x7 operation promising 99.9 percent availability.

Banco Itaú has embraced customer-centricity through cloud-based decisioning that has allowed them to compete more effectively during the pandemic. The benefits of the cloud have helped their bottom line as well as providing increased protection for their customers.

For its achievements, Itaú Unibanco won a 2022 FICO® Decisions Award for cloud deployment.

“This project ticked all the boxes when it came to the potential benefits of moving to the cloud,” said Senthil Erulappan, director, product engineering for merchant, risk and collections at FIS and one of the FICO Decisions Awards judges. “Itaú landed a trifecta of benefits when it came to scalability, high availability and agility. When you are a large organization, there can be considerable complexity to these implementations, so they were well rewarded with some impressive, quantifiable benefits.”

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