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SAS improves fraud protection for HSBC

SAS today launches SAS Fraud Management a new real-time, card fraud detection system based on its enterprise intelligence platform. The system was developed together with HSBC and is currently implemented in the US, conducting fraud checks on HSBC’s US credit card transactions in real time, improving protection for HSBC’s customers. Designed from the outset to handle credit and debit cards on a global scale, SAS believes that it is the most complete fraud detection system available today.

Using SAS Fraud Management, HSBC has improved fraud detection, false positive rates and fraud case handling efficiencies. Customers benefit from improved fraud protection on every card transaction, while the software actively reduces losses that cost the industry $4.84 billion1 last year. Customer service is improved through the reduction of contacts regarding potentially fraudulent transactions, whilst HSBC delivers improved fraud protection to its customers.

SAS Fraud Management enables HSBC to uncover fraudulent transactions more quickly and with greater accuracy. The system reviews HSBC’s card transactions, alongside other changes in customer behaviour, and delivers a real-time decision to proceed with the transaction or seek customer clarification regarding its authenticity. By optimising the accuracy of decisions, HSBC improves operational efficiency and fraud protection for every customer.

Specific benefits achieved by HSBC in the first three months of implementation include:
− An 87 percent increase in the number of data items processed, including card transactions and customer information, with a corresponding reduction of 12 percent in the mainframe processing overhead. This has resulted in a 53 percent decrease in the mainframe processing cost per data item.
− A 30 percent decrease in the computing resource cost of processing card transactions flagged as potentially fraudulent.
− A 10 percent increase in efficiency by agents investigating potentially fraudulent cases when compared to the proprietary case management system.
− Reduced IT support costs following the elimination of three software applications.

SAS believes that fraud detection and prevention is an increasingly important objective across the financial services industry and, given the success of SAS Fraud Management within HSBC, SAS is today launching the solution to the wider financial community. In a consolidated industry-wide effort to tackle card fraud, SAS’ aim is to create a consortium of financial institutions to unite and benefit from sharing their fraud knowledge and developing further applications using SAS Fraud Management. As demonstrated by HSBC, SAS Fraud Management enables organisations to actively combat fraud and will help change the face of card fraud management.

HSBC recognises the need for continually improving fraud prevention efforts to combat losses incurred in the card market. It chose SAS as its global development partner for an enterprise risk management platform with fraud detection and prevention at its core, because of its expertise, leading-edge technology, and the shared commitment to develop and deliver superior-quality applications. SAS has proven that it can support HSBC as a long-term global partner, and will work with HSBC to roll out SAS Fraud Management across the global bank.

Derek Wylde, Head of Group Fraud Risk, HSBC, said: “Our success with this partnership and with SAS Fraud Management shows that SAS understands and shares in HSBC’s long-term goals and can work with us to deliver improved solutions. In a constantly changing fraud environment, SAS technology helps us keep ahead of criminals. We believe the SAS solution takes us a significant way forward in our fight against fraud.”

“SAS is proud to have produced, alongside HSBC, a system that will truly change the landscape of transaction fraud detection across the financial services industry,” said Jim Goodnight, CEO of SAS. “SAS Fraud Management enables banks to continually adapt to the ever-changing fraud situation in order to improve the protection of banks, businesses, and customers. This system could revolutionise how the industry tackles fraud now and in the future.”

SAS Fraud Management, has been adopted as the exclusive transaction fraud solution across HSBC’s US credit card operations. Given its success it is now being implemented in the UK and Asia. Within the next few years, SAS Fraud Management will be used to assist HSBC in protecting transactions for more than 100 million credit or debit cards in more than 30 countries worldwide.