Nestor, Inc. today announced that Scotiabank has selected PRISM(R) CardAlert(TM), an advanced neural network-based fraud risk management system, to combat credit card fraud.
“Our goal is to protect our card customers against fraud by using the best technology available,” said Walter Kalichuk, Chief Security Officer at Scotiabank. “With PRISM, we can dynamically update the fraud detection model and configure queues to match our in-house expertise. This enables us to catch fraud earlier while maintaining complete control over our fraud operations.”
PRISM CardAlert is an adaptive fraud detection and account management system that dramatically reduces losses associated with credit and retail card fraud. CardAlert learns dynamically from card transaction data to detect and alert issuers, acquirers and processors to all types of card fraud at authorization or within minutes of the transaction.
PRISM CardAlert combines patented neural network technology for early detection, expert rules-based strategies for targeted fraud control, and advanced client/server account management software for taking immediate customer service and fraud prevention actions. The system proactively monitors transactions, volume levels, historical data, cardholder masterfile information and other data in real-time.
Transactions are scored for the probability of fraud by evaluating how different it is from the cardholder’s baseline patterns and how closely the transaction matches known patterns of fraud.
“Traditional risk management systems are static and provide satisfactory performance when installed. Over time the performance deteriorates because the fraud patterns have changed but the fraud detection model hasn’t,” said Sushmito Ghosh, Vice President of Financial Solutions at Nestor. “Nestor’s neural technology is unique in its ability to learn dynamic fraud patterns incrementally. The system detects new fraud schemes earlier, maintains peak efficiency and ensures that long-term detection rates are as effective as ‘start-up’ accuracy.”
According to Paul Facciol, Director of Security for the Canadian Bankers Association, “Credit card risk management is a growing concern in Canada. In 1996, credit card fraud losses in Canada exceeded $83 million, up significantly from the previous year. Substantial credit card fraud is attributed to stolen cards, including counterfeit schemes by highly organized crime groups.”
PRISM CardAlert’s risk models are based on each issuer’s unique credit card portfolios. This custom modeling technique enhances the system’s fraud detection capabilities, lowers false positives and provides earlier detection of suspicious activity than traditional neural networks. Separate, targeted custom models can be deployed for VIP and gold cards, geographic regions of operation, seasonal purchasing patterns and other card behavior trends specific to the issuer’s portfolio.
PRISM utilizes a graphical Windows interface that maximizes the efficiency of the fraud-prevention staff, allowing them to review more alerts, confirm transactions immediately, and block fraudulent card usage.
Nestor, Inc., headquartered in Providence, R.I., is a leading provider of intelligent decision-support solutions for the financial services industry. Nestor’s client/server products incorporate innovative pattern-recognition technologies ideally suited for data-intensive, mission-critical decision applications in real-time environments. The company’s products support fraud detection and case management for credit, debit, retail and corporate card fraud, as well as merchant fraud; bankruptcy prediction, and Internet customer support applications. More information can be obtained via the company’s Web site at .Details