Fighting Fraud: Network International and FICO Partnership
Network International integrates FICO fraud solution to help clients combat card-related fraud
In the expansive domain of the Middle East and Africa's payment processing landscape, Network International holds a prominent position, boasting over 30 years of expertise across 50 countries. With a staggering 3 billion transactions processed annually, and credentials managed for 20 million cardholders, Network International's influence is profound. Now Network International has extended its use of FICO solutions to include fraud management.
A Strategic Collaboration to Meet New Challenges
FICO’s partnership with Network International plays a crucial role in this landscape as they have, for the past three years, integrated FICO’s market-leading FICO Falcon Fraud Manager solution into their platform to help their clients combat card-related fraud effectively. This partnership has proven successful in navigating the realm of digital transactions and e-commerce, where risk of fraudulent transactions is on the rise.
The Middle East and Africa region is experiencing a digital shift; the transition from cash to cards and further to e-commerce has intensified the need for robust fraud prevention mechanisms and effective decisioning solutions. Like many financial institutions, Network International's banking clients are typically challenged with siloed systems — distinct platforms managing different decisions. This complexity prompted Network International to seek a comprehensive solution that transcends these silos.
FICO’s Decisioning-as-a-Service Provides a Paradigm Shift
FICO’s decisioning-as-a-service is a paradigm shift in addressing the fragmented landscape of decision-making platforms within banks and fintechs. These institutions often employ, for example, separate systems for credit decisions, marketing offers, and collections. FICO's approach consolidates these disparate workflows into a single platform, providing a unified perspective of the customer. This not only streamlines operations but also enhances the ability to analyse customer data holistically.
As this partnership has matured further, decisioning-as-a-service has emerged as a pivotal component. Larger clients, in particular, have expressed a keen interest in this unified data platform for various decisions such as risk scoring and collections. The ability to break down silos and offer a singular platform for diverse decisions adds significant value to Network International's financial institution partners. The recent World Retail Banking Report by Capgemini highlighted the fact that a siloed approach is preventing banks from fully leveraging customer data to increase customer engagement.
“When we talk to our partners, the biggest problem that they have is they have different systems using different technology. Now we’re able to combine workflows and rules and look at the customer holistically,” said Navneet Dave, Managing Director & Co-Head of Processing, Middle East, Network International.
The Case for Fighting Fraud
The partnership success story has extended further as Network International, equipped with FICO's solutions, has navigated the challenges presented by an increase in fraud, driven by the new digital landscape, to implement an enterprise-wide fraud solution. This solution, powered by an AI-based machine learning algorithm, extends beyond traditional card transactions and offers a holistic view of the customer, covering the full spectrum of banking products and channels.
This evolution to an enterprise-based approach has also opened up new business avenues for Network International. Traditionally focused on card payments, FICO's solution extends to new channels such as e-commerce and the increasing use of mobile phones and digital wallets. This expansion into previously uncharted territories represents not only new business opportunities but is also a testament to the adaptability and future-proof nature of FICO's solutions.
“Traditionally as a payment processor, we have been just focusing on card payments. Now, with FICO Enterprise, obviously the solution goes beyond card payments, it goes to other banking products,” said Navneet Dave.
In the complex landscape of digital payments, where fraudsters are continually devising new methods, FICO's artificial intelligence -based solution positions Network International on the frontlines of predictive prevention, with access to the Falcon Intelligence Network consortium score enhancing the value offered to financial institutions, enabling them to stay a step ahead in identifying and mitigating potential risks.
The Partnership Goes from Strength to Strength
The success of this collaboration is not just measured in technological achievements but also in the trust and satisfaction it instils in both Network International and its financial institution clients. FICO's transparency, support and expertise have contributed to the seamless integration of solutions, ensuring that consumers experience secure transactions and financial institutions witness a tangible reduction in fraud.
The partnership between Network International and FICO exemplifies not just a response to the current challenges but a forward-looking approach that addresses the dynamic landscape of digital payments in the Middle East and Africa. It underscores the power of collaboration in driving innovation and securing the future of financial transactions.
Learn More about Fighting Fraud with FICO
- To learn more about Network International’s partnership with FICO for enterprise fraud detection and prevention, see our in-depth case study.
- Read about Network International’s FICO Decision Award
- To learn more about partnership opportunities with FICO, please visit our website.
- Explore FICO’s fraud solutions
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<p>FICO’s latest research on <a href="http://www.fico.com/en/blogs/risk-compliance/us-credit-quality-rising-the-beat-goes-on/" target="_blank">national FICO® Score distribution</a> shows that US credit quality continues to trend upwards, with an increasing number of consumers scoring in the highest scores ranges. Given that, we decided it was time to refresh our study on “<a href="http://www.fico.com/en/blogs/risk-compliance/infographic-what-does-a-high-credit-scorer-look-like/" target="_blank">FICO® Score high achievers</a>,” where we examine the credit behavioural profiles of consumers with higher credit scores.</p> <p>As expected, our latest study showed that older people generally have higher scores, as has been the case in our <a href="http://www.fico.com/en/blogs/risk-compliance/age-before-beauty-credit-worthiness-before-youth/" target="_blank">past research</a>. This is largely because they have trade lines that have been open longer, which leads to higher scores (assuming the trade lines are in good standing and all other things equal). The most credit savvy among you will remember that length of credit history accounts for roughly 15% of the overall <a href="http://www.myfico.com/CreditEducation/WhatsInYourScore.aspx" target="_blank">FICO® Score calculation</a>.</p> <p>But for younger consumers, it isn’t too helpful to say, “just wait until you are 50 years old, and that will fix things!” Thus, I decided to dive deeper with our analysis, including looking at the credit behavioural characteristics of younger consumers with high FICO® Scores.</p> <p>In this analysis, I looked at credit characteristics for the two highest score bands, 750-799 and 800-850, which have about 16% and 23% of the population, respectively. I further broke this down by looking at the characteristics of the youngest 15% in each group, which occurs at age 29 for the 750-799 group and 43 for the 800-850. We used FICO<strong>®</strong> Score 9 for our analysis, and examined typical variables of the categories that go into the make-up of the score.</p> <p><a href="http://www.fico.com/en/blogs/wp-content/uploads/2016/10/FICO-Score-High-Achiever-table.png"><img class="alignnone size-full wp-image-29367" src="http://www.fico.com/en/blogs/wp-content/uploads/2016/10/FICO-Score-High-Achiever-table.png" alt="fico-score-high-achiever-table" width="715" height="747" /></a></p> <p>Since there’s a lot to dissect in this chart, I’ll highlight a few findings that struck me: <ul> <li><strong>Credit history.</strong> Higher scores are undoubtedly associated with a longer time on file. What’s striking is the higher average time on file for the 800+ group, both overall and for revolving accounts (the most common trade line). Clearly, it helps to start credit use early in life – but that’s not the sole determining factor for high scoring. The younger cohorts in both the 800+ and 750-799 groups have time on file medians significantly less than their older counterparts.</li> <li><strong>New credit.</strong> High credit scorers do, in fact, pursue new credit. We see little variation in months since last trade line opening and last inquiry among all groups observed.</li> <li><strong>Pay on time.</strong> As you might expect, the further in the past the delinquency, the higher the score – and that’s <u>if</u> a delinquency ever happened. 95% of the 800+ people and 72% of the 750-799 group have never been delinquent, which is a striking contrast to the 57% for the total population. The percentages for the younger groups are even higher, especially so for the 750-799ers. Collection items are also scarce for these high scorers. While 23% of the national population have collection items greater than $99, the figures are only 0.5% for the 800+ group and 3% for the 750-799 group. It is clear that, in conjunction with starting a credit file early, paying on time is a key trait of the FICO® Score high achiever.</li> <li><strong>Balance and utilization.</strong> Finally, we look at how credit is being used, focusing on revolving product use. (Since most people only have one mortgage or one auto loan, variation in instalment product figures is minimal and driven by payment history, which is near perfect for high scorers, as we’ve seen.) FICO® Score high achievers tend to have more open revolving accounts. While the % active trades and utilization are generally lower, by no means do high scorers avoid the use of credit products. What drives the difference here is the amount of <u>available</u> revolving credit utilized. The 800+ group is roughly 1/4 of the national median, both in total and on their highest utilized card; they also have lower balances and more cards<em>. </em>The 750-799 group is more active and higher utilized, but still only at 2/3 of the national figures. The young 750-799 group compensate with lower revolving balances and, as a result, lower utilization, which is in line with what we see for the 800+ group.</li> <li><strong>Benchmarks.</strong> I’d like to point out that while this study provides good benchmarks of the typical credit traits of the FICO® Score high achiever, individual credit profiles will vary widely. And keep in mind that when we sort groups of consumers as a whole by different behaviours, some results may look superficially odd. For example, the 800+ band has a longer median average open account time (128 months) than average revolving months on file (140 months).</li> </ul> So, what do we conclude? A huge takeaway is that high scorers don’t have too much in the way of serious delinquencies and negative public record data.</p> <p>In most respects, the young 800+ people are like their peer group. They really only differ markedly in their shorter credit history and higher non-mortgage balance, both of which are a function of life stage. Our results show that you don’t have to be a credit product hermit; these high scorers have more credit cards. The takeaway is to start credit activity early and maintain well-managed and moderate usage.</p> <p>In many ways, the young 750-799 people are more interesting because their age profile is much younger. Their credit characteristics differ more from their peer group, particularly in terms of length of credit history. They compensate by having almost pristine credit records and lower balances.</p> <p>Ultimately, 39% of US consumers are FICO® Score high achievers, which they accomplish by following common-sense credit practices. It ain’t rocket science!</p>
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