PRISM

Report
<Customer
Logo>
<date>
®
PRISM : Intelligent
Fraud Monitoring
Presentation to
<Customer Name>
<name>
<title>
<[email protected]>
Retail Decisions, Inc
+1 401 228 2355
www.red-usa.com
Agenda
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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
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:
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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
Retail Decisions, Inc
– Confidential &
Where does PRISM Fit?
Acquirer
Acquirer Sends Auth request
(via Networks) to Issuing Bank
Issuer
Authorization Response
Generated and Sent by Issuer
Merchant Sends
Authorization
Request to
Acquirer
Acquirer sends
response to Merchant
Statement
and Billing
Payment or
Chargeback
Consumer Notified
Purchase Complete
Merchant
Retail Decisions, Inc – Confidential and Proprietary
Consumer Shops and
Makes Purchase
Cardholder
Retail Decisions, Inc
– Confidential &
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
Debit Fraud Trends
9
Basis Points of Fraud
8
7
6
5
Pin
4
Signature
3
2
1
0
2004
2007
2008
2009
Same industries are taking the pain…
Description
Gas Stations and Service Stations
Category Code
Percent of Reported Fraud Average Dollar Loss
5542 and 5541
14.50%
$77.28
Discount Stores
5310
5.50%
$304.30
Grocery/Supermarket Stores
5411
4.75%
$231.27
Retail Decisions, Inc – Confidential and Proprietary
How does PRISM Work
Authorization
Request
Authorization
Response
PRISM
Score
PRISM
Real Time
Extract
PRISM
Score
Retail Decisions, Inc – Confidential and Proprietary
Post Auth
Rules
Decline
Alerting
Post Auth
Rules
NRT Rule
Alerting
Retail Decisions, Inc
– Confidential &
PRISM Scoring Engine
Retail Decisions, Inc – Confidential and Proprietary
ReD - Key features of Neural Networks
• Learned solution
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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
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Adaptive systems which learn from new experience
Reinforces existing trends and learns new trends
• Reasons for decision making
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Localized neural networks provide exact reasons
• Real-world tested
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In commercial applications since early 1980s
Used successfully in reducing card fraud worldwide
Capable of processing large amounts of data
a
15
Retail Decisions, Inc – Confidential and Proprietary
c
Transaction Fraud Scoring
Customer Account
Authorization
Non-Monetary Activity
Transaction Activity
Chargebacks
Events
Merchant
Read Merchant
Data Object
Database
Derive
Features
Change in
Individual
Merchant
usage patterns
SCORING ENGINE
Retail Decisions, Inc – Confidential and Proprietary
Transaction Fraud Scoring
Compare this particular
change in usage with
Neural Memory of
legitimate & fraudulent
changes in account
Authorization
Merchant
Read Merchant
Data Object
Database
Derive
Features
Neural
Network
Alert
Fraud Score (0-999)
SCORING ENGINE
Retail Decisions, Inc – Confidential and Proprietary
PRISM Real Time
Retail Decisions, Inc – Confidential and Proprietary
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
Retail Decisions, Inc – Confidential and Proprietary
Entrance Criteria
Excluded
Included
Screening
Database
Found Card or
Terminal
Not In
DB
Neural Score
TXN +
Score
Business Rules
Rules
Result
Immediate Response
PRISM Real-Time High Level System Flow
PRISM Real Time Decisioning
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•
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
Real-Time and NRT Interaction
PRISM
Real-Time
System
All approved and denied
transactions are shipped from
the RT system to he NRT
system.
PRISM RT Database
(all Score + Decision data)
Neural Score may have been
calculated in Real Time.
All Transactions
NRT Rules may have higher
false positive, slower
executions or different criteria
for alerting to send to agents or
automated contact systems.
PRISM Alerts
(NRT)
System
Retail Decisions, Inc – Confidential and Proprietary
Score
(Optional)
NRT Rules
Queues
Workflow
Existing workflow of alerted
accounts and transaction is
utilized to increase efficiency.
PRISM Alerts (NRT)
Retail Decisions, Inc – Confidential and Proprietary
Retail Decisions, Inc
– Confidential &
PRISM High Level Processing Flow
Retail Decisions, Inc – Confidential and Proprietary
Retail Decisions, Inc
– Confidential &
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 &
A&R – Rule Queue Relationship
All Transactions
PRISM
Rules Engine
Purpose: Identify fraud
All alerts: 0.1% - 1% of
volume
Purpose: Targeted alert
distribution / Facilitate reviewer
expertise
Risky MCC
queue
Queue Facility
Risky city
queue
1
Retail Decisions, Inc – Confidential and Proprietary
High amount
queue
...
2
Retail Decisions, Inc
– Confidential &
PRISM Rules Engine
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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
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Transaction-centric rules
Rules employing the neural score in isolation and in combination with non-neural data
elements
Rules requiring account history
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Rules requiring negative tables
Geolocation – Implemented as pass-through features
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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 (%)
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
Retail Decisions, Inc – Confidential and Proprietary
Tool Bar for on
Information
Quick
highlights
quick access
to
Account
of
account
standard
holder,
Display
of funds
status
functions
account
at
Risk and
relationship
Fraud Already
andnonReported
monetary
Button to
activities
can
expand “panes”
90
Day
Charting
of
be
displayed
ofsingle
the
view.
A
trends
here
in on
a the
account
Extensive
account
may
account
single
view
account
History
of all
activity
have
multiple
information
can
agent
and
cards.
Click
history
– All
be displayed
on
activity
here
toare
see
Ifsystem
there
transactions
these
on
thisscreens
account
status
of
all
Fraud
including
associated on
Transactions
financial info,
cards.
this
account, use
account history
this button to
or information
quickly access
from external
the screen to
sources
Mark Fraud
Transactions
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
®
PRISM Fraud Review Workstation
… Browser Based
… flexible queuing
functionality
… prioritization of alerts
… iterative review and
workflow
… all with “point and
click” navigation
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
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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.
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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.
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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
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Retail Decisions, Inc – Confidential and Proprietary
Prevention: Block-and-reissue compromised cards that have not
been used search and mining criteria to locate “testing” terminals
and POC
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
Retail Decisions, Inc – Confidential and Proprietary
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Sample: Create random and targeted sample
segments to evaluate performance.
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Evaluate: Measure performance of single or a
family of rule sets.
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Quantify: Obtain fraud detection and false
positive rates of rules prior to deployment.
Why ReD ?
•
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
•
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
Retail Decisions, Inc
– Confidential &
Benefits of PRISM Application
• Complete Solution
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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
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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
Why Choose Retail Decisions?
• Focus
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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
Retail Decisions, Inc – Confidential and Proprietary
Why choose Retail Decisions?
• Stay Focused on Customer Business
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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
Retail Decisions, Inc – Confidential and Proprietary
®
PRISM Debit:
Intelligent Fraud
Monitoring
Presentation to
Banamex
THANK YOU
Retail Decisions, Inc
+1 401 228 2355
www.red-usa.com

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