Scotiabank Selects PRISM CardAlert

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 .

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NYCE Inks Casino Deal

Foxwoods Resort Casino — the largest casino in the world–has selected NYCE Corporation to support its automated teller machine (ATM) program.

Under the agreement, NYCE provides comprehensive support for Foxwoods’ ATMs, which are deployed throughout the casino’s 4.1 million square foot facility. Currently, 19 ATMs are installed and operational, and an additional three are expected to be live by the end of November. NYCE’s end-to-end technology solution for Foxwoods includes ATM terminal driving, transaction processing, 24-hour terminal monitoring support and gateway access services.

“We are extremely pleased that NYCE’s reliability, efficiency and market strength were recognized by Foxwoods,” said Joseph Makarewicz, vice president of sales with NYCE Corporation. “Our robust technology and focused support services ideally position NYCE to support ATMs in high-traffic, non-traditional locations such as Foxwoods Resort Casino.”

Based in Woodcliffe Lake, New Jersey, NYCE Corporation provides financial institutions with flexible, state-of-the-art processing services that include telephone- and PC-based banking and bill payment solutions, ATM terminal driving, card authorization, card management, and gateway access. The corporation also operates the NYCE Network, the largest shared regional electronic funds transfer (EFT) network in the Northeast.

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In the Middle

Among card issuers with $100 million to $200 million in receivables credit unions and secured card portfolios have fared best this year with the exception of Carolina First. National low- rate issuers AFBA, Amalgamated, and Simmons are experiencing contractions this year while credit unions in UT and PA are seeing robust growth. Meanwhile secured card specialist Orchard Bank leads this peer group in growth. The data are based on CardData/Bankcard Update/Bankcard Barometer’s ‘Third Quarter 1997 Portfolio Survey’.

$100-$200 MILLION PEER GROUP
Issuer (State) Receivables Actives
97 96 97 96
3Q 4Q 3Q 4Q
AFBA Industrial (CO) 130 150 -13% 78 88 -11%
Amalgamated (IL) 102 104 -2% 70 75 -7%
Boeing Emp CU (WA) 166 152 +9% 78 74 +5%
Carolina Frst (SC) 145 127 +14% 78 65 +20%
Frst Commerce (NE) 164 156 +5% 150 145 +3%
Frst Security (UT) 187 201 -7% 138 149 -7%
Orchard Bank (OR) 137 115 +19% 159 134 +19%
Pa St Emp CU (PA) 134 116 +16% 70 56 +25%
Simmons Frst (AR) 170 166 +2% 146 153 -5%
Teachers CU (IN) 125 126 -1% 50 51 -2%
Zions (UT) 111 116 -4% 89 88 -1%
Totals: 1571 1529 +3% 1106 1078 +3%
receivables in $millions; active accounts in thousands

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NeuralTech Names Execs

NeuralTech, Inc. a leading provider of intelligent client/server solutions for the financial services industry announces the hiring of two new executives. Ralph Koch as Vice President and Chief Financial Officer and John Cramp, Executive Vice President and Chief Operating Officer.

Ralph Koch previously served as Vice President and Chief Financial Officer of Information Management Consultants, Inc. (“IMC”), a systems integration and software development.

John S. Cramp also came from IMC, where he was Vice President responsible for commercial business operations and product development.

“With the addition of John and Ralph, NeuralTech’s executive team is the strongest in the company’s history.” says Bruce Mancinelli, President and CEO, “We are now well positioned to grow the company and expand our market reach.”

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E-Commerce Patent

A patent was issued yesterday for an Internet electronic check technology that goes beyond existing systematic electronic funds transfer security controls and that is compatible with existing payment systems. A group of inventors, under the auspices of BankBoston, Bellcore and the Financial Services Technology Consortium, were issued the patent. The group says the security and privacy of the patented electronic check technology uses digital signatures and certificates which are securely contained in a hardware token such as a smart card.

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Citi to use Affinity Technology

Affinity Technology Group, Inc. and Citibank today announced an agreement in which Citibank, the nation’s second largest bank, will utilize Affinity technology for its indirect auto lending business.

Citibank chose Affinity’s recently introduced e-xpertLender(SM) — which works with Affinity’s core Decisys/RT(SM) technology to fulfill the vision of offering real-time, closed-loop banking over multiple channels — to aid the expansion of Citibank’s indirect auto lending business into additional geographic markets nationwide.

Affinity’s proprietary technology is designed to automate the processing and closing of credit, deposit, insurance, mortgage and other financial transactions through any retail delivery channel — branches, call centers, kiosks, ATMs, indirect agents, home banking, the Internet, retail dealers, the Affinity Automated Loan Machine (ALM(R)), and beyond. The technology allows consumers to conduct financial transactions anytime and anywhere they like, while enabling financial institutions to realize greater market share by servicing consumers’ needs precisely when and where they are ready to buy. Affinity is located on the World Wide Web at .

Citibank is a subsidiary of Citicorp, a global financial services organization serving consumers, businesses, governments and financial institutions through 3,200 offices in 98 countries and territories. In the United States, Citibank serves consumers and small businesses through a network of some 450 branches in nine states and the District of Columbia as well as national credit card, mortgage and electronic banking services.

Statements in this news release looking forward in time are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that forward-looking statements involve risks and uncertainties, including general economic conditions, delays and risks associated with the development of new technologies, consumer and industry acceptance of automated delivery channels and regulatory risks.

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Checkmate Signs Eagle

Checkmate Electronics, Inc. announced the roll out of a new point-of-sale solution for the rapidly expanding Renton, Washington-based Eagle Hardware & Garden chain of Home Improvement Stores. The system will be fully implemented by the end of 1997.

Combining both check reading and electronic signature capture with credit card processing at check-out platform, the new POS system will act as a strong deterrent against check and credit card fraud.

Mr. Ron Maccarone, Executive Vice president – Finance and Chief Financial Officer, says: “Using Checkmate’s systems we are implementing a process which provides a faster, more convenient check-out experience for our customers. It also provides the ability to identify check fraud at the point of entry to the system. By capturing data electronically and storing it on our corporate host, we can retrieve transaction details within minutes. Based on the projected reduction in check fraud and credit card charge backs, the system will rapidly pay for itself.”

Gregory A. Lewis, Checkmate’s president and chief operating officer, says: “We are pleased to add Eagle Hardware & Garden to our growing list of merchants whose focus on customer service with fraud prevention uses the full functionality of Checkmate’s technologies. Many more of our customers are combining check and electronic signature with card processing at the point-of-transaction. These merchants will be able to improve cashier productivity, reduce fraud, and be ready to switch to new electronic processing methods like check truncation without any disruption to their normal business activities.

Eagle Hardware & Garden use electronic signature and capture software provided by North Carolina-based, Smokey Mountain Technologies, Inc. All signatures are captured electronically on Checkmate’s CM 2020 signature capture pads and are then stored on the corporate host for retrieval at any time.

Eagle Hardware & Garden operates 30 warehouse home improvement centers in Alaska, Colorado, Hawaii, Montana, Oregon, Utah and Washington. The Company’s home centers average 125,000 square feet of retail selling space and feature 65,000 products under its “More of Everything”(R) merchandising philosophy.

Checkmate Electronics, Inc., supplies innovative electronic payment solutions for distributors, retailers, and financial service institutions. Checkmate’s products include point-of-sale software and terminals, comprising check readers, MICR analyzers, payment authorization and point-of-transaction promotion/loyalty systems, signature capture devices and electronic transaction processing equipment, all packaged in integrated and cost justified solutions.

As a full service provider, Checkmate also offers professional services including application development, consulting, project management, installation services and TotalCARE support and maintenance. Headquartered in Roswell, Ga., Checkmate Electronics, Inc. has over 185 employees. Visit the Checkmate web site at ckmate.com .

This press release contains forward-looking statements subject to the safe harbor created by the Private Securities Litigation Reform Act of 1995. Management cautions that these statements represent projections and estimates of future performance and involve certain risks and uncertainties. The Company’s actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors including, without limitation, the Company’s heavy reliance on check readers in its product mix; the Company’s dependence on its limited suppliers and manufacturers of component parts of its products; rapid and significant technological developments that could delay the introduction of improvements in existing products or of new products; the Company’s dependence on its proprietary technologies (which may be independently developed by competitors); the Company’s dependence on a small number of large retail customers; the potential fluctuation in financial results as a result of the Company’s inability to make sales to large customers as well as the volume and timing of bookings received during a quarter and variations in sales mix; competition from existing companies as well as new market entrants; and, the Company’s dependence on key personnel.

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Fraud Technology

U.S. consumer fraud hit $152 billion last year with the insurance segment (health, property & casualty and workers comp) accounting for nearly 80% of the total. Overall consumer fraud thus represents about $1600 per U.S. household. According to a new report released this morning by MA-based Meridien Research, the insurance industry accounts for only 18% of the worldwide expenditures on fraud detection technologies while experiencing 50% of the world’s fraud losses. By comparison the credit card industry accounted for 33% of global fraud technology expenditures while experiencing only 1% of global fraud losses. Last year VISA and MasterCard losses topped $750 million. This year overall U.S. credit card losses among all general purpose and private label brands will exceed $1 billion. The Meridien report entitled ‘Fraud Detection Technologies’ provides an comprehensive look at available fraud fighting solutions.

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Huntington on CompuServe

CompuServe Corp. and The Huntington National Bank have joined forces to bring new online banking services to CSi members. Beginning today, the Ohio-based company’s web bank, known as Huntington.com, will be directly available to more than 1.4 million CompuServe members in the United States.

CSi members will benefit from the convenience-oriented products and services Huntington.com offers for managing personal and business finances online. The site is divided into three sections. The first, Huntington Web Bank, describes personal and commercial products and allows customers to utilize planning tools and apply for Internet Banking. A second section, Corporate Information, features press and general information about the publicly held bank holding company. Rounding out the site, and providing the most functionality, is the expanded and improved Transaction Center. The center provides consumers with transactional capabilities, such as online bill paying and account reconciliation and reporting, in a secure environment.

“CSi’s core membership seeks access to high-utility products and services to accomplish important business and personal tasks, quickly and easily,” said Scott Gerber, senior manager for CompuServe. “The Huntington Web Bank extends choice and flexibility for members’ banking needs.”

“We’re proud to invite CSi members to experience banking at Huntington.com,” said William Randle, executive vice president and manager of Direct Access Financial Services for The Huntington. “CSi’s membership demographics closely mirror our target customer base, giving us access to a wonderful audience of prospective online banking clients.”

CSi members can access Huntington.com through the Personal Finance community or by using the GO:HNB command.

Founded in 1969, CompuServe Incorporated provides the world’s most comprehensive online/Internet access through its two brands, CSi and SPRYNET. Through CompuServe, its Japanese licensee NIFTY- Serve and its affiliates around the world, more than 5 million home and business users in more than 185 countries are connected online and to the Internet. CompuServe Network Services, a leading network integrator, provides more than 1,200 companies around the world with complete, fully integrated, Internet, Intranet, and Extranet connectivity solutions. With world headquarters in Columbus, Ohio, the CompuServe organization includes offices in the United Kingdom, Germany, France, Switzerland and the Netherlands.

The Huntington National Bank is the principal subsidiary of Huntington Bancshares Incorporated. With over 131 years of serving the financial needs of its customers, Huntington Bancshares Incorporated (Nasdaq: HBAN) is a regional bank holding company headquartered in Columbus, Ohio, with assets in excess of $25 billion. The Huntington provides innovative products and services through its 527 offices in Ohio, Florida, Georgia, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Pennsylvania, South Carolina, Virginia and West Virginia.

The Huntington also offers products and services through its technologically advanced, 24-hour telephone bank, a 1,100-unit ATM network and its Web Bank at . Publicly traded as Nasdaq: HBAN, the stock is included in the S&P 500 Index.

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Wireless Data Acquisition

Wireless Data Solutions Inc. Tuesday announced that the company has signed a letter of intent and has entered into negotiations to acquire B Squared Software Inc. of Huntington Beach, Calif.

B Squared Software Inc. designs, implements and maintains information systems for industrial automation and test and measurement markets. B Squared’s information systems create “virtual instruments” capable of conducting data collection, data distribution or process control effectively reducing operating costs and improve product quality.

Mike McLaughlin, Wireless Data’s president and CEO, commented: “We are very excited about the potential of B Squared Software Inc. They have an excellent management team, outstanding technical expertise and although a relatively young company, they are already profitable with projections of over $4 million for fiscal year 1998. Some of their clients include impressive names such as Warner Bros., Texaco, RCA, AirTouch Cellular, Beckman Instruments and Rockwell International. After our meetings this past week we feel that the hardware capabilities of Wireless Data Solutions, and the software capabilities of B Squared combined, could potentially double our current revenue projections beginning fiscal 1998 and beyond.”

Wireless Data Solutions Inc. designs and markets digital communications equipment and software systems for vehicle fleet management through its wholly owned subsidiary Dinet. Its hardware products are known as mobile data terminals called Data Mates; these units send and receive real-time information to and from a base station. Options include Automatic Vehicle Location (AVL) using GPS technology with the company’s mapping software, Cellular Digital Packet Data (CDPD), onsite Credit Card readers and others.

Visit their web site @ [www.virtualir.com/solu][1].

Statements in this press release about the company’s negotiations are “forward-looking statements” within the meaning of Sections 27A and 21E of the Securities Act of 1933 and 1934. The company intends that such “forward-looking statements” be subject to the safe harbors created thereby. Since these statements involve risks and uncertainties, such as the outcome of negotiations and revenue projections, the results could differ materially from those expected.

[1]: http://www.virtualir.com/solu

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New DataCard Development Center

DataCard Corporation announced today that it has opened a software development center in Bangalore, India. The new center will be funded and operated as a joint venture with SaveSmart, a California-based Internet services company.

Glenn Highland, DataCard’s president and CEO, said the new center will allow both companies to introduce a steady flow of new products and achieve aggressive financial goals.

“We currently develop software in Minneapolis, Toronto, Tokyo and several cities in Europe. While those resources are considerable, worldwide demand for DataCard products would exceed our capacity before too long,” Highland said. “The new software development center in Bangalore will provide us with the additional horsepower we need to achieve our goals.”

DataCard and SaveSmart plan to start with a team of twelve software developers in the new center, then gradually grow the staff on a project-by-project basis to over 50 developers within three years.

“After exploring several locations around the world, we chose India because it offers a wealth of software development talent,” Highland said. “India also offers many geographic advantages. It allows us to be closer to customers in the Pacific Rim and China_two areas where we expect tremendous growth over the next several years.”

Jim Moar, executive vice president and chief operating officer for DataCard, said the opening of the Bangalore site reflects a change in the company’s business and its products.

“Just a few years ago, the world viewed us as the leading manufacturer of card personalization equipment,” Moar said. “Now, our customers look to us for intelligent, fully integrated card issuance solutions.”

“Financial institutions, government agencies, corporations, colleges, universities and hospitals use our solutions to intelligently and securely manage their business,” Moar added. “The software development expertise we’re adding in India will allow us to keep up with a growing worldwide demand for those solutions.”

Ashok Narasimhan, SaveSmart CEO and former CEO of India-based Infotek stated, “India has a high concentration of some of the world’s most talented software developers. We will do everything possible to attract this rich pool of talent to our start-up organization.”

Narasimhan added, “The new joint center will focus on both Internet point of purchase technologies, two areas universally expected to sustain significant growth for a very long time to come.”

DataCard Corporation, a privately held company based in Minneapolis, Minn., is a world leader in innovative plastic card solutions. The company offers a spectrum of card-related products and services, including digital photo ID systems, badging services, card personalization systems, systems integration services and transaction terminals. ([www.datacard.com][1])

[1]: http://www.datacard.com

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Granite Foundation OFX Capable

Destiny Software announced today that it has demonstrated OFX functionality in its flagship middleware product, Granite Foundation. OFX enables financial institutions to offer online functionality through remote banking software such as Home Financial Network’s (HFN) Internet ATM, Quicken ’98 and Microsoft Money ’98.

Destiny has successfully connected Granite Foundation to Internet ATM using OFX for the secure exchange of credit card information, such as transaction histories and detailed statement information. Destiny will demonstrate its OFX capability at BAI’s Retail Delivery ’97 Conference in New Orleans, Louisiana on December 2-4.

Destiny’s Granite OFX Channel facilitates the connection between Destiny’s middleware and OFX-enabled remote banking software. “OFX gives financial institutions yet another powerful channel for offering their consumers online access,” commented Lucinda Duncalfe, President and CEO of Destiny Software. “Destiny’s goal is to give financial institutions total control over their online systems with channel independence. Our Granite OFX Channel is another big step down this path.”

Granite Foundation is a platform for creating financial services transaction systems for the Internet, America Online, OFX and voice response units. Financial institutions can deploy a completely customized solution with Granite Foundation in the same time it takes to implement a packaged, “off- the-shelf” solution.

Destiny Software was founded in 1994 to provide online transaction solutions for large financial institutions. Destiny enables financial institutions to solve complex business problems through the use of advanced object oriented technology. Destiny’s clients include Bank of America, First USA, GE Capital, Advanta and The Vanguard Group. The company’s web site is located at .

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