real-time intelligence that matters. © 2015, brighterion inc. (all rights reserved) keeping an eye...

Real-Time Intelligence That Matters

© 2015, Brighterion Inc. (all rights reserved) Keeping an eye on your business

The Last G-20 Country To Embrace The EMV Standard


Percentage Of U.S. Credit Cards With EMV Capabilities

0.4%4%

25%

70%

91%98%

2012 2013 e2014 e2015 e2016 e2017

Percentage of U.S. Credit Cards with EMV Capability

Source: Aite Group interviews with payment networks and 18 large U.S. issuers, April to May 2014


Preferred Credit Cardholder Verification Method


Chip and signature

12

Undecided4

Chip and PIN1

Signature, then migrate to PIN

1

Preferred Credit Cardholder Verification Method (N=18)


Portfolio Prioritization For EMV Migration


9

3

3

2

Credit first

Concurrent

No debit portfolio

Undecided

Portfolio Prioritization for EMV Migration (n=17)


EMV’s Impact In Other Countries

- Changes In Canadian Credit Card Fraud Losses, 2008 To 2013 (In Millions Of CAD)

Source: Canadian Bankers Association

$245.4

$199.6$171.5

$152.6 $145.3

$111.5

$128.4$140.4

$176.1

$259.5 $268.6

$299.4

2008 2009 2010 2011 2012 2013

Changes in Canadian Credit Card Fraud Losses, 2008 to 2013 (In millions of CAD)


Cross-Border Fraud Will Displace To CNP

- U.K. POS Card Fraud , 2004 To 2013 (In GBP Millions)

Source: Financial Fraud Action UK

£129.7£96.8 £98.6

£144.3£169.8

£80.9£47.6 £36.1 £42.1 £43.4

£114.4

£89.0£68.5

£56.2

£54.1

£47.7

£44.4£50.1

£55.2 £58.9

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

U.K. POS Card Fraud, 2004 to 2013 (In GBP millions)

Lost/Stolen

Counterfeit


The U.S. Will Not Be An Exception

- U.S. CNP Credit Card Fraud Losses, 2011 To e2018 (In U.S. $ Billions)


$2.1$2.6 $2.8 $2.9 $3.1

$3.8

$5.2

$6.4

2011 2012 2013 e2014 e2015 e2016 e2017 e2018

U.S. CNP Credit Card Fraud Losses, 2011 to e2018 (In US$ Billions)


CNP: Not Your Parent’s Fraud

• Rapid introduction of novel payment methods & mechanisms

• Complex, organized, continuously evolving fraud schemes


Reducing CNP Fraud

Tokenization•Make stolen data useless

3-D Secure•Add extra layer of security

Behavioral Analytics•Making/assisting authorization decisions


Reducing CNP Fraud

Q: Please indicate the effectiveness of each of these technologies at reducing card fraud and data security issues.


62% High/Very High

Q: Please indicate the effectiveness of each of

these technologie

s at reducing

card fraud and data security issues.

Tokenization

3-D Secure

Behavioral Analytics

Reducing CNP Fraud



62% High/Very High

Q: Please indicate the effectiveness of each of

these technologie

s at reducing

card fraud and data security issues.

Tokenization

3-D Secure

Behavioral Analytics

50% High/Very High

28% High/Very High

62% High/Very High

Reducing CNP Fraud



NEURAL NETWORKS DATA MINING

BUSINESS RULES

• Apply same logic to all cards, merchants and devices• Only capable of identifying past fraud behavior• Often require expensive databases and hardware to implement• 12-15 month implementation time

STATISTICS

Poor results:•Avg. 18% CNP decline rate vs. Avg. 5% CP decline rate •CNP fraud still growing rapidly

EXISTING APPROACHES ALONE ARE NOT ENOUGH

Behavioral Analytics Legacy Approaches


UNSUPERVISED LEARNING

ADAPTIVE LEARNINGNEURAL NETWORKS

DATA MINING

REAL-TIME, LONG-TERM,GEO, RS, MULTI-DIMENSIONAL PROFILING

CASE-BASED REASONING

GENETIC ALGORITHMS

FUZZY LOGIC

BRMS / BUSINESS RULES

BEHAVIORAL DEVICE ID

Brighterion Solutions


UNSUPERVISED LEARNING•Automatic data enrichment / feature identification

ADAPTIVE LEARNING•Adaptive learning stops previously unknown schemes as they occur•Longest model lifespan on the market

OPTIMIZED, MULTI-DIMENSIONAL PROFILING ENGINE•Specific behavioral analysis (1-to-1 Profiling)•Real-time transaction scoring (< 10ms)•Off-the-shelf hardware, no databases or data-warehouse needed•Solutions go live in 6 – 8 WEEKS

Brighterion Solution Advantages

BEHAVIORAL DEVICE ID•Monitor/profile mobile devices and computers over time


UNSUPERVISED LEARNING•Automatic data enrichment / feature identification

ADAPTIVE LEARNING•Adaptive learning stops previously unknown schemes as they occur•Longest model lifespan on the market

OPTIMIZED, MULTI-DIMENSIONAL PROFILING ENGINE•Specific behavioral analysis (1-to-1 Profiling)•Real-time transaction scoring (< 10ms)•Off-the-shelf hardware, no databases or data-warehouse needed•Solutions go live in 6 – 8 WEEKS

Brighterion Solution Advantages

REAL-TIME BEHAVIORAL DEVICE ID•Monitor/profile mobile devices and computers over time


Brighterion Solution: Model Building & Training

UnsupervisedLearning

DataEnrichment

ProfileCreation

Issuer/Processor Data•Merchant information•Global CNP transaction history•Global fraud database•Card transaction history


DataEnrichment

ProfileCreation

Merchant Data•Personal information•Technical information•Merchant transaction history•Merchant fraud database

Computer AgentAddress

Profile






Profile

NeuralNetworks

Data Mining

Case based Reasoning

Behavioral Device ID

NeuralNetworks

Data Mining






DataEnrichment

Profile/AgentCreation



DataEnrichment

Profile/AgentCreation



Profile

NeuralNetworks

Data Mining



NeuralNetworks

Data Mining



Issuer, Processor, Acquirer Models & Profiles

Merchant Models & Profiles


Transaction

Transaction


Agent

Brighterion Solution: Production Environment


Profile

NeuralNetworks

Data Mining



NeuralNetworks

Data Mining



•Score •Reasons•Action



Transaction

Transaction


Agent


NeuralNetworks

Data Mining



NeuralNetworks

Data Mining



•Score •Reasons•Accept

•Score •Reasons•Accept


Transaction

Transaction


Agent


NeuralNetworks

Data Mining



NeuralNetworks

Data Mining



•Score •Reasons•Deny

•Score •Reasons•Deny


Transaction

Transaction


Agent


NeuralNetworks

Data Mining



NeuralNetworks

Data Mining



•Score •Reasons•ReviewReview



Transaction

Transaction


Agent


NeuralNetworks

Data Mining



NeuralNetworks

Data Mining





CaseMgmt.

CaseMgmt.


Transaction



Agent

NeuralNetworks

Data Mining



NeuralNetworks

Data Mining




Transaction•Score •Reasons•Action


CaseManagement


Brighterion CNP Solution In Action• We have supported clients in Germany, Brazil, and Canada

while those markets adopted and rolled out EMV.

• Currently score billions of transactions in real time for 100s millions of cardholders worldwide

• Successfully applied to merchants, acquirers, issuers and homeland/cyber security

• Solutions go live in 6 – 8 WEEKS

• 75% - 95% CNP fraud detection improvements.

real-time intelligence that matters. © 2015, brighterion inc. (all rights reserved) keeping an eye...

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