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© 2014 Fair Isaac Corporation. Confidential. This presentation is provided for the recipient only and cannot be reproduced or shared without Fair Isaac.

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Presentation on theme: "© 2014 Fair Isaac Corporation. Confidential. This presentation is provided for the recipient only and cannot be reproduced or shared without Fair Isaac."— Presentation transcript:

1 © 2014 Fair Isaac Corporation. Confidential. This presentation is provided for the recipient only and cannot be reproduced or shared without Fair Isaac Corporation’s express consent. Driving Consumer Preference While Reducing Fraud Anant Nambiar Vice President, General Manager, Fraud FICO Colin McKee Product Management, Vice President, Consumer FICO

2 © 2014 Fair Isaac Corporation. Confidential. Personal Experience—“Moments of Truth” Customer on vacation. Wanting or needing to pay a transaction or bill Customer on vacation. Wanting or needing to pay a transaction or bill Customer financially “stranded”. Finding their means of payment lost or stolen Customer financially “stranded”. Finding their means of payment lost or stolen Customer unable to access facilities. Forgetful, clumsy or simply harassed Customer unable to access facilities. Forgetful, clumsy or simply harassed Customer opening a new account. Facing significant numbers or intrusive questions Customer opening a new account. Facing significant numbers or intrusive questions 2

3 © 2014 Fair Isaac Corporation. Confidential. Fraud Drives Customer Attrition 3 1 in 3 customers will close an account or use it less as a direct result of being the victim of a fraud attack

4 © 2014 Fair Isaac Corporation. Confidential. Fraud Protection Done Well Will Improve Customer Experience 4 Respondents of a UK bank survey said auto-resolution has increased their confidence in card usage 89% Instead of switching to another card or curtailing spending, cardholders are likely to increase usage Increase in average ticket value per spend 23% Lift in active debit cardholders 10% Source: 2010 Datamonitor/Ovum study—“Consumer-facing prevention strategies in Payments”

5 © 2014 Fair Isaac Corporation. Confidential. 78% agree strongly that it’s improved quality of service 94% would recommend service to family and friends 91% happy with auto-resolution 89% said the service had increased their confidence in using their card Source: Results of surveys conducted by several European banks that are using FICO automated communications management for fraud alerts and self-serve resolution Fraud Checks Can Raise Customer Loyalty 5 Most cardholders who receive auto-alerts are happy with the experience

6 © 2014 Fair Isaac Corporation. Confidential. Fraud Management Shapes the Customer’s Experience Genuine transactions are NOT declined Contact is established within seconds Interactions are personalized and convenient Customers are informed and empowered Legitimate activity is stopped Your customers are not informed A process takes too long How you handle a fraud event is a defining moment in customer satisfaction and loyalty to your brand. You SUCCEED when… You FAIL when… 6

7 © 2014 Fair Isaac Corporation. Confidential. “Consumer” Falcon Empowering consumers to fight fraud © 2014 Fair Isaac Corporation. Confidential.7

8 Common Goals More control and awareness, and greater peace of mind Consumer Needs Bank Goals “Consumer” Falcon Control with Convenience Lower fraud, fewer false positives, increased card usage, and reduced costs Common goal: end fraud and abuse We can achieve our common goals by engaging consumers in the fight against fraud 8

9 © 2014 Fair Isaac Corporation. Confidential. How Cardholders Can Exercise Control Controlling the size of purchases allowed in real-time Restricting usage for a card given to a teenager Receiving alerts on exceeding limits that you set Monitoring transactions as they occur Resolving problems with cards entirely via mobile Imagine…… 9

10 © 2014 Fair Isaac Corporation. Confidential. ► Card usage controls ► Transaction amount ► Transaction types ► Transaction location ► Etc. ► Real-time card usage alerts ► Push, SMS, ► Monitoring of purchases in real-time ► With ability to respond ► User-configurable settings ► Mobile app delivery Card Controls, Alerts, and Monitoring 10

11 © 2014 Fair Isaac Corporation. Confidential. Control where, when and how your credit or debit card is used Use Cases 11 Turn off a lost or missing card Allow online purchasing and cash withdrawals only when you want them

12 © 2014 Fair Isaac Corporation. Confidential. Reduce risk of fraud, and manage spending by children and employees Use Cases Place limits including transaction amount, country or state, merchant type, etc. 12

13 © 2014 Fair Isaac Corporation. Confidential. Track card spending in real-time and resolve disputed charges through mobile interfaces Use Cases ► Confirm actual charges match expectations ► Keep tabs on family members and employees ► Track progress against budget or credit-building plans ► For unknown charges: Contact bank, dispute with electronic declarations, turn off card, or tag for later Learn about transactions as they happen, and monitor card spending VISA Reward Card Ending with

14 © 2014 Fair Isaac Corporation. Confidential. ► Prevention and quick detection of fraudulent card usage ► Empowerment to choose own settings for card usage and alerting ► Reduced cost and inconvenience from fraud ► Improved control and awareness of card usage by family members and employees ► More positive purchase experience ► Peace of mind Benefits to Consumers 14© 2014 Fair Isaac Corporation. Confidential.14

15 © 2014 Fair Isaac Corporation. Confidential. Roadmap 15 ► Card usage controls ► Card usage alerts ► Mobile app delivery ► Real-time cross- consumer fraud scoring and insights ► Additional consumer mobile capabilities ► Enhanced Adaptive Analytics and GIP ► Advanced modeling ► Network-wide threat detection Phase 1—2015: FICO Card Control Phase 2—2016: Connected Falcons Phase 3—2017: Improved Analytics

16 © 2014 Fair Isaac Corporation. Confidential. Significant Impact for Issuers Expected Results ► Increase in card spend ► Reduction in churn ► Increase in enrollments Impact of Controls & Alerts Increased Usage Reduced Costs Higher Customer Confidence Lower False Positives Fraud Prevention & Detection Fewer Phone Calls ► Reduction in customer service calls, complaints ► Reduction in fraud rate 16

17 © 2014 Fair Isaac Corporation. Confidential. Consumer Falcon Benefits to Banks: 1. Lower Fraud Costs Prevention of fraud due to consumers’ usage controls Lower exposure to fraud due to faster consumer detection 17

18 © 2014 Fair Isaac Corporation. Confidential. Consumer Falcon Benefits to Banks: 2. Higher Card Usage 18 © 2014 Fair Isaac Corporation. Confidential. Higher net promoter scores Higher spending in specific higher risk channels, e.g. CNP Higher overall card usage 18

19 © 2014 Fair Isaac Corporation. Confidential. Consumer Falcon Benefits to Banks: 3. Lower Operations Costs Expected reduction in other support areas (complaints and dispute resolution) Driven by dispute resolution/electronic declarations via mobile app Reduced servicing staff requirements Driven by lower fraud, fewer false positives, and increase in self- serve rate 19

20 © 2014 Fair Isaac Corporation. Confidential. Learn More at FICO World Related Sessions ► Introducing the FICO ® Falcon ® Fraud Platform ► Opening the Door to Better Customer Relationships Through Consumer Education ► How Credit Education Increases Customer Lifetime Value Products in Solution Center ► FICO ® Falcon ® Fraud Manager Experts at FICO World ► Anant Nambiar ► Colin McKee ► Geoff Smith Blogs ► 20

21 © 2014 Fair Isaac Corporation. Confidential. Forward-Looking Statements Product roadmaps and similar marketing materials should be considered forward looking and subject to future change at FICO’s discretion. Future functionality, features or enhancements as shown are FICO’s current projections of the product direction, but are not specific commitments or obligations. 21

22 © 2014 Fair Isaac Corporation. Confidential. Please rate this session online! 22 Anant Nambiar Colin McKee

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24 © 2014 Fair Isaac Corporation. Confidential. Cut Slides ► Potentially could use these if we want more depth on benefits of Connected Falcons 24

25 © 2014 Fair Isaac Corporation. Confidential. ► In a perfect world, only valid transactions—those wanted by consumers, issuers and merchants alike—would be authorized ► In the real-world, bad actors try to defraud the system, and valid transactions are unnecessarily blocked as we fight fraud ► Historically issuers and processors have done most of the work to prevent fraud; increasingly, merchants are involved with growth in CNP ► Driven by weekly card data breaches, consumers now want to engage in fighting fraud, to protect themselves ► By working together, we can improve the cardholder experience and the economics of lending…bringing us closer to the perfect world Giving Consumers Control © 2014 Fair Isaac Corporation. Confidential.25

26 © 2014 Fair Isaac Corporation. Confidential. Phase 2 Use Cases ► Reduce fraud with cross-wallet insight: Receive consumer-level fraud scores and reason codes ► Adjust lens for future transactions on compromised user ► Create new cases or modify priority of existing cases up or down Fraud confirmed on user’s card with Issuer 1 Heightened fraud risk reported to user’s other enrolled Issuers

27 © 2014 Fair Isaac Corporation. Confidential. Phase 2 Use Cases ► Extract insight about consumer behavior to lower false positives ► Based on card activity and travel ► Based on app settings and preferences User arrives Charles de Gaulle, withdraws €300 with PIN at ATM Data signals (user travel to France) communicated to other enrolled Issuers to reduce false positives on other cards User changes France control to “on”

28 © 2014 Fair Isaac Corporation. Confidential. We have common goals across the banking industry and our customers: We want to put an end to card and account fraud and abuse. Industry participants want to lower fraud, reduce false positives, increase card usage, and reduce costs. Consumers seek more control and awareness, and want greater peace of mind. We have new opportunities to engage consumers in the fight against fraud, and achieve these common goals. Working with consumers to achieve shared goals Alternate version of first slide 28

29 © 2014 Fair Isaac Corporation. Confidential. 29 © 2014 Fair Isaac Corporation. Confidential. “Consumer” Falcon Empowering consumers to fight fraud Alternate version 29

30 © 2014 Fair Isaac Corporation. Confidential. Section Divider Title Goes Here ► Alternate slide formats beyond this 30

31 © 2014 Fair Isaac Corporation. Confidential. 31 © 2014 Fair Isaac Corporation. Confidential. Customer centric quote Start off with a provocative statement 31


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