Fighting online payments fraud. SAS Banking and Insurance Day May 2014 Andy Scherpenberg, Fraud Expert, SAS

Transcription

1 Fighting online payments fraud SAS Banking and Insurance Day May 2014 Andy Scherpenberg, Fraud Expert, SAS

2 Fraud is everywhere

3 Internet Application Online Shopping Transfer Payment Credit Card Claims Darknet Cyber Crime Value Chain Products/Services/Sales Invoice IT Internal/Supporting Functions (HR, Procurement, Legal) Coercion Corruption Bribery Payroll Call Center Rogue Trading Procurement Theft

4 Internet Application Online Shopping Transfer Payment Credit Card Claims Darknet Cyber Crime Value Chain Products/Services/Sales Invoice IT Internal/Supporting Functions (HR, Procurement, Legal) Coercion Corruption Bribery Payroll Call Center Rogue Trading Procurement Theft

5 SOME HISTORY 300 B.C

6 WHAT HAPPENS?

7 No single layer of fraud prevention or authentication is enough to keep determined fraudsters out of enterprise systems. Avivah Litan VP & Distinguised Analyst Gartner Research

8 LANDSCAPE Complexity Average Fraud Deliberate Fraud Organized Criminal Gangs

9 BALLOON EFFECT FRAUD IS MOVING Companies implement manual/basic fraud detection

10 BALLOON EFFECT FRAUD IS MOVING Companies implement manual/basic fraud detection Fraud MO s change, detection becomes more complex

11 FRAUD LOSSES FEBELFIN FIGURES Online Fraud

12 MISSION HAS CHANGED Facilitating Payments

13 MISSION HAS CHANGED Facilitating Secure Payments

14 A NEW ERA Fraudsters adapt A NEW ERA Customers want faster payments (i.e. mobile) People are not robots, they change their behavior

15 A NEW ERA BRINGS NEW CHALLENGES!! Payment processing times decline!! Modus Operandi changes rapidly!! False positive reduction remains a challenge

16 APPROACH DETECTING, TREATING, IMPROVING Analytical Optimization Real Time Detection Engine Case Management

17 APPROACH DETECTING, TREATING, IMPROVING Analytical Optimization

18 MATURITY MODEL Maturation Outset Maturation Layer 1 Endpoint Layer 2 Session Layer 3 Channel Layer 4 Multi-Channel Layer 5 Social Network

19 MATURITY MODEL Layer 1 Endpoint Layer 2 Session Layer 3 Channel

20 IT TAKES TWO TO TANGO Expert Knowledge Advanced Analytics Yesterday s methods are insufficient to address tomorrow s fraud risk

21 WE DELIVER INSIGHT SAS uses embedded analytical models to uncover things that the human brain cannot. Our investigators can focus on cases with the highest probability of fraud or highest potential financial damage. Maya Mašková Head of Internal Audit Allianz

22 MODERN FRAUD DETECTION HYBRID APPROACH TO ANALYTICS Anomaly Detection Predictive Modeling Text Mining Database Searches Automated Business Rules Analytic Decisioning Engine Social Network Analysis

23 Social Network Analysis Demo - Tom Stock Fraud is not commited by machines,but by humans. Cunning as they might be, they can rarely do it alone. The Social Network Analysis shows the often hidden links between customers, companies and employees

24 FRAUD DIFFERENT METHODOLOGIES WHY SHOULD YOU USE ANALYTICS? Advanced analytics with SNA Advanced analytics Business rules Random samples POPULATION

25 THE MULES

26 WHO ARE THEY?

27 ANALYST vs. PREDICTIVE MODEL Indicator Indicator Weight Age Gender Marital Status Age 13% Gender 18% Language 14% Marital status 17% Monetary inflow 22% Postal Code 2% Education Level 3% Client relationship age 2% 99% accurate

28 WHAT DOES IT LOOK LIKE? Transactions Processing Engine Real Time Detection Engine Alert / Case Management Scenario Designer

29 VISUAL SCENARIO DESIGN PUTTING CONTROLS WHERE THEY BELONG Design & deploy

30 Visual Scenario Designer Demo - Tom Stock Demonstrates how an end user can tune an existing scenario with instant feedback on the effect of the modifications. Also shows how the user can deploy a modified scenario into production. All of this without IT intervention and with full audit trail

31 Visual Analytics Demo - Tom Stock Important as a good starting point might be, nothing is more important than continuous adaptation. Graphical report-builing and data mining give insight in the current state of affairs, all in the blink of an eye, allowing you to react to changes in the outside world faster than ever before. Continuous Improvement

32 Capability STRATEGIC ROADMAP STEP-BY-STEP ROAD TO MATURITY A solution integrated by design Focus on rapid deployment of a line of defence, and prepare for the future Capability can be deployed over time, at the speed and extent you choose Anomaly Detection Network Analysis Enterprise Fraud Platform Each next step builds on the previous, no waste Rule-based Alert generation Predictive Models Expand scope to other types of fraud or other silos Manual Detection Time

33 KEY DIFFERENTIATORS MARKET LEADER ACROSS THE BOARD Leader in Gartner's Magic Quadrant Forrester cites SAS as a Leader Leader in Gartner's Magic Quadrant Forrester Cites SAS as a Leader Chartis Research Leaders Category Only Vendor in this space that is leading in each of these sectors Data Integration Big Data Predictive Analytics Business Intelligence & Analytics Enterprise Fraud Management Anti-Money Laundering 5

34 OUR VISION As promised, a look into the future.

35 OUR VISION Information theft Threats on mobile devices Cybersecurity attacks on backend Sophisticated malware, built specifically for your institution Experts are convinced major institutions already have malware inside

36 Sounds unlikely? Unbelievable?

37 If I would have been standing here before you 5 years ago, and told you that your customers would give away their banking details and credentials over the phone, that would have sounded more unlikely than my closing message just now.

38 Closing Message

39 We re watching intently how the sea gently touches our feet

40 But we don t realize what is coming

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