PRISM : Intelligent Fraud Monitoring

muscleblouseAI and Robotics

Oct 19, 2013 (3 years and 5 months ago)

231 views

PRISM
®
: Intelligent
Fraud Monitoring

Presentation to


<Customer Name>





<name>

<title>

<email@red
-
usa.com>



Retail Decisions, Inc

+1 401 228 2355

www.red
-
usa.com



<date>


<Customer
Logo>

Retail Decisions, Inc


Confidential and Proprietary

Agenda


What is PRISM?


Why do I need it?


How does it work?


What are the Benefits?


Why would I buy it from ReD?


Retail Decisions, Inc


Confidential and Proprietary

Retail Decisions, Inc


Confidential &
Proprietary

What is PRISM


PRISM

is a software solution or hosted service to financial
institutions, processors and switches for prevent payment fraud
prevention



ReD protects transactions in Real Time (RT) or Near Real Time
(NRT) and works against any acceptance channel


The PRISM Product Suite combines:


Complex Business Rules Engine with full business user control


Custom trained Neural networks


Alert Case Management


Workflow


Monitoring and Reporting


Analytics products for strategy development


CPP/POC detection

Retail Decisions, Inc


Confidential and Proprietary

Where does PRISM Fit?

Retail Decisions, Inc


Confidential &
Proprietary

Consumer Shops and
Makes Purchase

Merchant Sends
Authorization

Request to

Acquirer

Acquirer Sends Auth request
(via Networks) to Issuing Bank

Authorization Response
Generated and Sent by Issuer

Acquirer sends
response to Merchant

Consumer Notified
Purchase Complete

Statement

and Billing

Payment or
Chargeback

Acquirer

Merchant

Issuer

Cardholder

Retail Decisions, Inc


Confidential and Proprietary

PRISM


Complete Solution


Rule based systems


Focus on what we know about fraud control


Known fraud schemes can be prevented easily with rules


Challenges


If the rules are too tight … we catch nothing


If the rules are too loose … we drown in reviews


Rules don’t adapt to evolving fraud patterns


Statistical solutions


Focus on understanding fraud


Fraud trend analysis


Helps create complex rules for fraud detection


Challenges


Not a “dynamic” solution … doesn’t keep pace with changing schemes


Neural Networks


Focus on what we don’t know about fraud


Earliness of detection


Easy control of caseload
vs

false positive rates
vs

percentage detection


Increased fraud savings


5

Retail Decisions, Inc


Confidential and Proprietary

PRISM
®

Products


PRISM
Real Time


Real
-
Time Transaction
Decisioning


PRISM
Credit and Debit


Credit and Debit Card Fraud Detection


PRISM
Merchant


Merchant Risk Management


PRISM
AML


Anti Money Laundering


PRISM

RulesPlus


Intelligent Rule Development and Testing


PRISM
PinPoint


Point of Compromise detection


ReD Shield


Real
-
time CNP fraud prevention


Retail Decisions, Inc


Confidential and Proprietary

The Problem Changed


Organization and Speed

The scheme included
money mules

who were hired to
withdraw the stolen money from ATMs and store it in safety
deposit boxes and luggage lockers at train stations.
Within a
12
-
hour period, $9 million in cash was withdrawn from
2,100 ATMs in 280 cities around the world

Retail Decisions, Inc


Confidential and Proprietary

The Problem Changed
-

Easy to get

Retail Decisions, Inc


Confidential and Proprietary

Purpose Built Skimmers

Retail Decisions, Inc


Confidential and Proprietary

…Even instructions on YouTube

Retail Decisions, Inc


Confidential and Proprietary

2005 vs 2010 Fraud Type Breakdown

Description

Category Code

Percent of Reported Fraud

Average Dollar Loss

Gas Stations and Service Stations

5542 and 5541

14.50%

$77.28

Discount Stores

5310

5.50%

$304.30

Grocery/Supermarket Stores

5411

4.75%

$231.27

Same industries are taking the pain…

0
1
2
3
4
5
6
7
8
9
2004
2007
2008
2009
Basis Points of Fraud

Debit Fraud Trends

Pin
Signature
Retail Decisions, Inc


Confidential and Proprietary

How does PRISM Work

Retail Decisions, Inc


Confidential &
Proprietary

Authorization
Request

Authorization

Response

PRISM
Real Time

Decline
Alerting

NRT Rule
Alerting

PRISM

Score

Post Auth
Rules

Post Auth
Rules

PRISM

Score

Extract

Retail Decisions, Inc


Confidential and Proprietary

PRISM Scoring Engine

Retail Decisions, Inc


Confidential and Proprietary

c

a


Learned

solution


Solution accurately models the underlying patterns in the data


Iterates to converge on a global error minima


Captures non
-
linearity and inter
-
feature dependence


Incremental Learning


Adaptive systems which learn from new experience


Reinforces existing trends and learns new trends



Reasons

for decision making


Localized neural networks provide exact reasons



Real
-
world

tested


In commercial applications since early
1980s


Used successfully in reducing card fraud worldwide


Capable of processing large amounts of data

ReD
-

Key features of Neural Networks

15

Retail Decisions, Inc


Confidential and Proprietary

Transaction Fraud Scoring

SCORING ENGINE

Authorization

Read
Merchant

Data Object

Merchant

Database

Customer Account

Non
-
Monetary Activity

Transaction Activity

Chargebacks

Events

Derive

Features

Change in
Individual
Merchant
usage
patterns

Retail Decisions, Inc


Confidential and Proprietary

Transaction Fraud Scoring

SCORING ENGINE

Authorization

Neural

Network

Fraud Score (0
-
999)

Derive

Features

Compare this particular

change in usage with

Neural Memory of

legitimate & fraudulent

changes in
account

Read
Merchant

Data Object

Merchant

Database

Alert

Retail Decisions, Inc


Confidential and Proprietary

PRISM Real Time

Retail Decisions, Inc


Confidential and Proprietary

Immediate Response

Entrance Criteria

Screening
Database

Neural Score

Business Rules

As defined by the customer,
these are the rules on which
transactions need to be
scanned in real time.

Positive and Negative
database. Accounts and
terminal are checked against
this list to determine if they
should be approved or denied
immediately based on this
information.

Transactions are scored relative
to cardholder profiles of activity
using neural model.

User defined Rules are
executed against the
transactions. Transactions can
be approved or denied, but no
ALERT is generated by this
system

Excluded

Found Card or
Terminal

Included

Rules
Result

PRISM Real
-
Time High Level System Flow

Not In

DB

TXN +

Score

Retail Decisions, Inc


Confidential and Proprietary

PRISM Real Time Decisioning


Customized implementation based on your authorization system


Suite includes


Browser based administrative controls


Service Based Architecture including


Configurable Entrance Criteria


Full control over what is “
decisioned
” or responded to immediately, with full logging of
account history


Real Time Neural Engine


Real Time neural score


Positive/Negative Database


Allow data elements like Account Number or Terminal ID to be entered in
Positive/Negative lists


Complex Business Rules Engine


Standard rules


Velocity rules


“Block Account” interface for requests to add/remove


15 day historical database


Integration to NRT system for alerts or decline management



Retail Decisions, Inc


Confidential and Proprietary

PRISM RT Database

(all Score + Decision data)

PRISM

Real
-
T
ime

System

All Transactions

PRISM Alerts


(NRT)

System

Score

(Optional)

NRT Rules

Queues

Workflow

All approved and denied
transactions are shipped from
the RT system to he NRT
system.

Neural Score may have been
calculated in Real Time.

NRT Rules may have higher
false positive, slower
executions or different criteria
for alerting to send to agents or
automated contact systems.

Existing workflow of alerted
accounts and transaction is
utilized to increase efficiency.

Real
-
Time and NRT Interaction

Retail Decisions, Inc


Confidential and Proprietary

PRISM Alerts (NRT)

Retail Decisions, Inc


Confidential &
Proprietary

Retail Decisions, Inc


Confidential and Proprietary

PRISM High Level Processing Flow


Retail Decisions, Inc


Confidential &
Proprietary

Retail Decisions, Inc


Confidential and Proprietary

Retail Decisions, Inc


Confidential &
Proprietary

PRISM Alerts System
-

Benefits


Case Management


All account, transaction and customer interaction data on one screen


Improves
quality of customer care



Workflow


Alerts are prioritized and routed to analysts for immediate review


Sophisticated queuing software


Improves
operational efficiency



Strategy Software


“Test drive” rules and measure performance before production “roll
-
out”


Instant deployment of rules without IT involvement


Implement and monitor
risk management policies



Monitoring and Reporting


Comprehensive suite of performance reports


Report Wizard to construct, schedule and deploy customized reports


Continuous fraud loss and trend
measurement

and
mitigation



Retail Decisions, Inc


Confidential and Proprietary

Retail Decisions, Inc


Confidential &
Proprietary

A&R


Rule Queue Relationship

PRISM

All Transactions

All alerts: 0.1%
-

1% of
volume

Rules Engine

Purpose: Identify fraud

Queue Facility

Risky MCC
queue

Risky city
queue

High amount
queue

. . .

2

1

Purpose: Targeted alert
distribution / Facilitate reviewer
expertise

Retail Decisions, Inc


Confidential and Proprietary

PRISM Rules Engine


PRISM Rules engine allows complicated business rules to be run on
transaction receipt to detect fraud events



Rules can be written by
Business Users
,
not IT staff


PRISM supports many types of near real
-
time rules


Transaction
-
centric
rules


Rules employing the neural score in isolation and in combination with non
-
neural data
elements


Rules requiring account history


Velocity
-

Number of transactions on card / account in user
-
defined time period


Aggregated amount
-

Average / total amount per card / account in past X days


Hybrid combinations


Examples: Support all standard SQL operators (<,>, etc), Booleans (AND, OR, NOT, etc),
string operations (IN, etc), wildcards (%)


Rules requiring negative tables


Geolocation



Implemented as pass
-
through features


Average distance between merchants for all purchases in past 30 days


Average distance between CDH home and merchant in past 30 days


Any valid SQL condition which does not prohibitively impact throughput


Retail Decisions, Inc


Confidential and Proprietary

PRISM 8.x Thin Client Main Screen


Tool
Bar for
quick access to
standard
functions

Quick highlights
of account
status

Information on
Account
holder,
account
relationship
andnon
-
monetary
activities can
be displayed
here in a
single view

Display of funds
at Risk and
Fraud Already
Reported

90 Day
account
activity
history


All
transactions

A single
account may
have multiple
cards. Click
here to see
status of all
associated
cards.

If there are
Fraud
Transactions on
this account, use
this button to
quickly access
the screen to
Mark Fraud
Transactions

History of all
agent and
system activity
on this account

Charting of
trends on the
account

Button to
expand “panes”
of the view.
Extensive
account
information can
be displayed on
these screens
including
financial info,
account history
or information
from external
sources

Retail Decisions, Inc


Confidential and Proprietary

Analysis and Review System
-

Benefits


Case Management


All account, transaction and customer interaction data on one screen


Improves
quality of customer care



Workflow


Alerts are prioritized and routed to analysts for immediate review


Sophisticated queuing software


Improves
operational efficiency



Strategy Software


“Test drive” rules and measure performance before production “roll
-
out”


Instant deployment of rules without IT involvement


Implement and monitor
risk management policies



Monitoring and Reporting


Comprehensive suite of performance reports


Report Wizard to construct, schedule and deploy customized reports


Continuous fraud loss and trend
measurement

and
mitigation



Retail Decisions, Inc


Confidential and Proprietary


Browser Based


… flexible queuing

functionality



prioritization
of alerts


… iterative review and
workflow


… all with “
point and
click
” navigation

PRISM
®
Fraud Review Workstation

Retail Decisions, Inc


Confidential and Proprietary

PRISM Analytical Tools

Retail Decisions, Inc


Confidential and Proprietary

PRISM PinPoint

-

CPP / POC Detection & Mitigation



Benefits



Dramatically
reduce

your counterfeit fraud losses



Identify
merchants unknowingly targeted by skimmers


Isolate
cards which are about to be used fraudulently


Automatically
detect

in minutes what takes you weeks of manual
review


Protect

your cardholders confidence in you


Retail Decisions, Inc


Confidential and Proprietary

Common Point of Purchase


Typical Counterfeit Activity


Skimming
: The fraudster secures a number of credit or debit
account numbers at the original Common Point of Purchase, this
location is known as the Point of Compromise.


Testing
: The fraudster makes purchases for small denominations
on an unattended terminal or e
-
commerce website to determine
which of the accounts are active thus creating a second Common
Point of Purchase.


Slamming
: Fraudster rapidly perpetrates repetitive fraud on each
active account.



Common Points of Purchase (CPP) and Points of Compromise
(POC)


Data Mining
:

Interactive data analysis to locate CPP


Triangulation
: Expand search and mining criteria to locate “testing”
terminals and POC


Prevention
: Block
-
and
-
reissue compromised cards that have not
been used search and mining criteria to locate “testing” terminals
and POC


Retail Decisions, Inc


Confidential and Proprietary

PinPoint

Screens


Retail Decisions, Inc


Confidential and Proprietary

What is PRISM RulesPlus?


Rule Performance Quantification


Create statistically measured
data samples
random,
or be a target subset, such as ‘all commercial cards’,
to target fraud in specific portfolios or data segments



Enables the user to
quantify the performance of rules
prior to releasing them into production



Enables the user to quantify rule performance on one
or more samples of data, allowing them to
accelerate
the rule optimization
process



Retail Decisions, Inc


Confidential and Proprietary

PRISM
RulesPlus

Features


Benefits


Sample
: Create random and targeted sample
segments to evaluate performance.


Evaluate
: Measure performance of single or a
family of rule sets.


Quantify
: Obtain fraud detection and false
positive rates of rules prior to deployment.


Retail Decisions, Inc


Confidential and Proprietary

Retail Decisions, Inc


Confidential &
Proprietary


Focus


This is our
core competency
. This is what we do and do it well


We are there for our customers as fraud evolves


Our competitor’s customers are converting to ReD

Why ReD ?



Financials


ReD

has
high earnings stability


Profitable and double
-
digit growth for the past five years



Global Presence


Fraud is an international issue without borders


We
learn and transfer knowledge

from each territory


We rapidly deploys our services as fraud evolves and migrates



Expertise


Some of the
top fraud managers

in the world are employees of
ReD


Our objective is to maximize valid transactions not just stop bad ones


We help our customers balance the trade
-
off between risk and
opportunity



Retail Decisions, Inc


Confidential and Proprietary

Benefits of PRISM Application


Complete Solution


Real Time and Near Real
-
Time
Decisioning


Fraud alert Case management


Reporting on agent and system performance


Integrated communications


Increase detection and lower false positives


PRISM Neural Engine


User defined business rules


Configurable


User defined workflow


Automated Actions


Tieback to other systems



Retail Decisions, Inc


Confidential and Proprietary

Benefits of PRISM


Partnership approach


Collaborate with Customer to demonstrate immediate and
measurable value


Ongoing application review to ensure performance


World wide and multi
-
channel fraud expertise


Consultative relationship throughout contract



Tailored and customized


Truly tailored solution for functions and verticals


Detailed and ongoing review of business objectives to ensure the
application meets the need


Customizable options for SMS, Email, and ARU integrations
available



Technology


Provides hybrid technology solution using Neural, Rules and Analytic
solutions.


Focused on developing products to help fraud managers


Committed to this solution as we use it for our own business



Retail Decisions, Inc


Confidential and Proprietary

Benefits of RD


Multi
-
channel Solution


Incorporates activity across all customer interaction channels


Monitors deposits and “non
-
monetary” transactions


Risk weighting for products


Risk weighting for risky merchant categories


Facilitates communication of Alert both inside and outside the organization
with multiple channels



Scalable


Linear scalability of all components


Designed for phased roll
-
out across business lines and products


High volume transaction processing


Experts in Real Time Fraud decisions



Support


Solution supported by internal resources


Rated “top
-
notch” by our customers


Retail Decisions, Inc


Confidential and Proprietary


Focus


Payments Fraud Detection is our
core competency
.


We are there for our customers as fraud evolves


Participate in Issuer, Acquirer and Merchant fraud prevention


Hosted and fully managed worldwide fraud solutions for over 10 years



Global Presence


Fraud is an international issue without borders


We
learn and transfer knowledge

from each territory


We rapidly deploys our services as fraud evolves and migrates




Expertise


Some of the
top fraud managers

in the world are customers of ReD


Our objective is to maximize valid transactions not just stop bad ones


We help our customers balance the trade
-
off between risk and opportunity




Why Choose Retail Decisions?

Retail Decisions, Inc


Confidential and Proprietary

Why choose Retail Decisions?


Stay Focused on Customer Business


Create environment for iterative improvement


Monitor False Positives


Continual review of system effectiveness


Focus manual efforts on most likely alerts


Ensure enough data to make effective decisions is available on the
alert


Communicate trends


Use information we have to establish more value


Establish and maintain account relationship focused on the
industry




Retail Decisions, Inc


Confidential and Proprietary

Customer References and Projects


Customer Commitment


Our customer relationships stand as a testament to our commitment to their
success.


We would arrange reference with any of our customers


We regularly attend all customer internal product meetings to ensure we are
part of the team



Conversions from competitors products


We have converted two customers off PRM as live software installs, Both
took less than 10 weeks.


Both required multiple installations of the PRISM product (Credit and Debit).


Neither were required to change SEIP message.


Both received new “quick start” models as part of the conversion, with
complete custom models within 4 months.


New tools available are providing them more options to bring additional data
into the PRISM Score and Rules than was available previously




Retail Decisions, Inc


Confidential and Proprietary

QUESTIONS / NEXT STEPS

Questions / Next Steps?

PRISM
®
Debit:
Intelligent Fraud
Monitoring

Presentation to


Banamex



THANK YOU




Retail Decisions, Inc

+1 401 228 2355

www.red
-
usa.com