Swiss Issuer UBS Card Center Stops 74 Percent More Fraud with FICO AI and Machine Learning

14 November 2017

Highlights:

  • UBS Card Center stopped 74 percent more fraudulent transactions in 2016 than in 2015, and saved potential losses of CHF172 million (about $172 million) using FICO® Falcon® Platform and related FICO technology.
  • UBS Card Center has won the 2017 FICO Decisions Award for Fraud Control.
  • UBS Card Center processes roughly 25 percent of the credit cards in Switzerland.
  • FICO® Falcon® Platform is the leading card fraud solution, protecting 2.6 billion payment cards worldwide.

UBS Card Center, which processes roughly 25 percent of the credit cards in Switzerland, has cut the amount of fraud write-offs per compromised card, stopped more fraudulent transactions and reduced false-positive rates using the FICO® Falcon® Platform. The card processor stopped 74 percent more fraudulent transactions in 2016 than in 2015, and saved potential losses of CHF172 million (about $172 million). UBS Card Center achieved these gains by leveraging the latest artificial intelligence and machine learning capabilities of the Falcon Platform, including the use of FICO® Fraud Predictor with Merchant Profiles and adaptive analytics.

For its achievements, UBS Card Center has won the 2017 FICO Decisions Award for Fraud Control.

More information: http://www.fico.com/en/products/fico-falcon-platform

"In times of constant cost optimization, we need to keep fraud write-offs to the very minimum," said Marcel Drescher, director of fraud services at UBS Card Center. "We were facing new business volumes, but did not have the ability to increase staff numbers to absorb the new volumes. Proactivity in combatting fraud, paired with very high standards on customer experience and satisfaction, are major challenges we're facing on a day-to-day basis."

To solve this challenge, fraud experts at UBS Card Center used the free-form rule writing within FICO Falcon Fraud Manager to create complex rules that deployed the AI-based FICO®Falcon® Fraud Score and Falcon's innovative adaptive analytics, which use the results of fraud investigations to automatically fine-tune the neural network models in Falcon. "These custom rules, combined with the advanced analytics, was the only way to improve false-positives and account detection rates," Drescher said.

UBS Card Center also took a new approach — for the first time, it began to directly decline transactions that appeared to be fraudulent, rather than creating a Falcon Fraud Manager alert to be reviewed with the customer.

"This saved manpower — only with further fraudulent activity on a card is an alert created and customer contact established," Drescher said. "Using this approach, we have been able to manage a 42 percent increase in fraud cases without the need to bring in new staff resources."

"I was impressed by UBS Card Center's advanced use of fraud technology to meet their challenges," said Julie Conroy, research director at the Aite Group, one of this year's judges. "In particular, their use of adaptive analytics shows that they are using powerful AI and machine learning techniques to their full advantage."

"UBS Card Center is an amazing success story in the world of payments fraud," said Torsten Mayer, vice president for the DACH region for FICO. "They have excellent know-how and they deploy the latest breakthroughs in fraud detection to keep their losses low, their false-positives low and their customer satisfaction high. Bravo to Marcel and his team!"

The FICO® Falcon® Platform is the leading card fraud solution, protecting 2.6 billion payment cards worldwide. UBS Card Center, a longtime user of the Falcon Platform, has reduced fraud losses per compromised card by 85 percent since 2000.

About the FICO Decisions Awards

The FICO Decisions Awards recognize organizations that are achieving remarkable success using FICO solutions. A panel of independent judges with deep industry expertise evaluates nominations based upon measureable improvement in key metrics; demonstrated use of best practices; project scale, depth and breadth; and innovative uses of technology. The 2017 judges are:

  • Giorgi Alibegashvili, Strategic Project Manager, TBC Bank (2016 award winner)
  • Julie Conroy, Research Director, Aite Group
  • Douglas Gray, Director, Enterprise Data & Analytics, Southwest Airlines (2016 winner)
  • Joy Macknight, Transaction Banking and Technology Editor, The Banker
  • Daniel Mayo, Chief Analyst, Financial Services Technology, Ovum

The winners of the FICO Decisions Awards will be spotlighted at FICO World 2018, the Decisions Conference, April 16-19 in Miami Beach, Florida.