As many of us who have long been in the industry know, fraud remains a top challenge for debit cards. In 2019 issuers faced $4.2 billion in gross (attempted) debit card fraud and ultimately incurred losses of over $1 billion on debit and ATM transactions; the need for an effective solution to this problem has never been greater.
That’s why FICO and PULSE - a Discover® company and leading provider of debit/ATM networks in the US – partnered to implement a state-of-the-art fraud platform to provide real-time fraud detection on millions of transactions per day. All this while protecting network participants and addressing card issuers’ unique risk tolerances and needs.
As a whole, debit card payments are on the rise, as are cases of customer-not-present (CNP) fraud, due to the exponential growth of online shopping. Striking a balance between being tough on fraud and maintaining a frictionless cardholder experience is an ongoing challenge for issuers and retail banks alike. Falsely identifying debit card activity as fraudulent can lead to lost revenue and reputational damage, as well as decreases in transaction volume. To meet these challenges head on, PULSE invested in advancing their fraud detection platform that would adapt to the challenges posed.
With FICO’s AI and machine learning technology; supervised and unsupervised learning techniques, PULSE found it could meet the unique needs of its network and individual issuers leveraging the FICO® Falcon® Platform to form omnipresent coverage that continuously adapts across channels and consumer behaviours. The platform’s fraud model scoring is supported by a data consortium known as the FICO® Falcon® Intelligence Network, a key differentiator that allows PULSE to benefit from a cross-institutional view of transactional behavior.
“We consider FICO the experts on all things analytics and fraud. We turn to them for advice on a regular basis and rely on their vast experience in financial services and fraud detection and prevention,” said Jim Lerdal, Vice-President of Fraud Operations.
Overall, PULSE network participants have realized some outstanding benefits with FICO, including:
- 25% reduction in false positives
- 40% increase in fraud dollars blocked
- 50% increase in account detection rate
We are thrilled to partner with PULSE, and look forward to many years of partnership and wins against fraud to come.
To learn more about why PULSE chose FICO, see our case study.
To hear more about my thoughts on fraud and financial crimes, follow me on Twitter @dougoclare.