Disbank reduces credit card application fraud by 200%, saving $25,000 a day

KXEN software delivers ROI in the first week of use

LONDON/SAN FRANCISCO, 10 August 2004 - KXEN, a global provider of predictive analytics, today announced that Disbank, one of the largest financial services groups in Turkey, has significantly reduced credit card fraud by using the KXEN Analytic Framework.

Through the use of predictive models Disbank has increased the number of fraudulent credit card applications identified by 200% - a saving of $25,000 per day - and reduced the number of fraudulent transactions.

Credit card applications addressed first

Taner Ayhan, Executive Vice President of Alternative Channels in Disbank said: "In a rapidly growing market like the Turkish banking sector, especially the credit card operations had a fraud problem that had to be addressed. We'd done a lot of work manually checking credit applications, but as our market share grew our effectiveness/customer satisfaction affected and the fraud problem expanded."

"What KXEN and their partner Kratis have done, is to give us the ability to quickly prioritise and analyse all of the applications. This means we only have to investigate the applications that KXEN flags. And they had the system up and running in just one month."

Kunter Kutluay, vice president, Kratis explains: "It took us just one day of working with the bank's historic fraud data to identify, with a high degree of reliability, 94% of the fraudulent applications. A month later we had implemented a system which agents could use to score individual applications on their desktops."

Kratis is a boutique consulting firm with specific experience in predictive modelling.

Real-time transaction monitoring

Following the success with credit card applications, KXEN and Kratis were invited to improve Disbank's system for monitoring credit card transactions in real-time.

The bank's systems are now so efficient that a Disbank agent alerted a customer that his wallet had been stolen before he had even noticed. Disbank followed by calling the shop where the transaction took place, and advised the police. The fraudster was arrested in the store and the customer got his wallet back with all of its contents, including the cash. Since, 42 thieves have been arrested between April and June 2004.

Roger Haddad, CEO, KXEN, comments: "Today Disbank has a system that allows each transaction to be individually scored against the likelihood of fraud in seconds. In this competitive market, this is a clear differentiator as not only the bank offers a value-added service to its customers, but also reduces losses incurred from fraud."

Improved morale

Taner Ayhan says: "A very important outcome of both projects has been a huge improvement of morale of the agents in the Credit Card Security Department. This, in combination with the KXEN and Kratis applications, has made us much more effective at our jobs."

Disbank operates an advanced distribution network of 165 branches, 254 ATMs, six web portals and a call centre in what is the third largest market for credit cards on the European continent.

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