Credit card fraud is under attack at HSBC, which has enlisted business intelligence software from SAS to detect credit card fraud six times faster than before.
HSBC is using SAS's Fraud Management for Banking software to analyse its entire transactional database and look for patterns that can signify criminal activity. This is a far more effective method of fraud detection than simply looking for anomalies or exceptions, as most banks have done in the past.
"The project was delivered on time and on budget, and has exceeded expectations," said George Lennox, the bank's credit and risk group manager. "It is detecting fraud and it's doing it six times faster."
HSBC and SAS have been working together for just over two years, and have now signed a 15-year agreement. Their aim - for a change, where retail banking is concerned - is to share with other financial institutions what they have learnt, in order to stay ahead of criminals who have become increasingly professional and international.
"Even with all our global experience we only have a limited view of card fraud," said Lennox, adding that banks need to co-operate if they are to beat the international fraudsters.
HSBC, which has over 120 million plastic cards in circulation, is using its business intelligence platform for risk management as well. The company said that credit losses are 70 times higher than transaction fraud losses, and that each one percent improvement in risk management could result in a $75 million saving.
The card fraud project also won HSBC a top award from SAS at its annual customer conference, held this week in Geneva. "It detected more fraud and did it faster," said SAS CEO Jim Goodnight, handing Lennox the 2006 Enterprise Intelligence Award.