data analytics corp pay industry hansen

7/29/2019 Data Analytics Corp Pay Industry Hansen

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Data Analytics in the Corporate

Payment Industry

Bret Hansen

Vice President of Technology Services, U.S. Bancorp


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Agenda

The Daily News

Classifications of Complex Event Processing Maximizing Control, Compliance, Cost Savings

Through Complex Event Processing

Increase Business Stability & Opportunities ThroughComplex Event Processing

U.S. Banks Complex Event Processing Case Study


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A former Parks and Recreation director is facing fraud charges after

making unauthorized personal purchases with a corporate credit card.She charged over $67,000 of unauthorized purchases.The head of Los Angeles Countys Probation department said he hasreferred allegations of credit card fraud by his employees, as department

officials are...Struggling to account for $79.5 million in County funding.Univ. of Maryland employee was convicted for $300,000 credit card fraudfrom the school over a period of two years.

Ottawa bank employee charged with credit card fraud.

The employee was ordering new credit cards for closed accounts.

THE DAILY NEWSwww.dailynews.com TH E WORLDS FAVOURIT E N EWSPAPER - Since 1879


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Do you want to save your companymillions of dollars a year?

Do you want to keep in good standing withyour shareholders and customers?

Do you want to prevent your companyfrom failing?

A well defined Complex Event Processingsolution can do these things and more


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Two Classifications ofComplex Event Processing

Computation-oriented CEP is designedto execute on-line algorithms

Detection-oriented CEP is designed todetect event patterns.


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Maximizing Control Through CEP Ford writes off $1billion in unnecessary inventory because

the R&D department wasnt talking to the Purchasingdepartment

A Lehman Brothers employee had a keystroke error whichcost the firm $6 million in trading losses

W Hotel loses $175,000 honoring 413 on-line reservationsfor 749 nights posted at $25 instead of $259

PacBell is fined $27 million for mishandling and error


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Maximizing Control Through CEP

Maximizing Business Control

Corporate Costs

Corporate Policy

Corporate Standards Corporate & Government Regulations


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Maximizing Compliance Through CEP

Maximizing Compliance

Defining Compliance Rules Reduce Risk

Automated Continuous Monitoring


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Maximizing Cost Savings Through CEP

High cost to manually

audit transactions Labor Intensive

Inefficient

Error-prone

Program Size $100 MM

Average Transaction Size1 $315

Total Transactions per Year $317,460

Cost to Audit per Transaction2 $2.38

Audit Sample Size 20%

Number of Audits Annually 63,492

Annual Cost of Audit per Year $151,111

References:1 2010 Purchasing Card Benchmark Survey Results, Palmer & Gupta2 NAPCP Understanding the Processing Costs and Related Costs


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Proactively Identifying Business Opportunities

Auditing your businesss data can

Identify new business partners

Identify new vendors to solve problems

Identify cost savings


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Increase Business Stability Automated Auditing

Detect fraudulent activities real-time byassociating time, people, and eventstogether

Reduce surprises Reduce cost of manual auditing

Increase reliable outcome of error pronemanual process


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Increase Business Stability Continuous Auditing modeling

Monitoring business processes Consistent Auditing trending

Ensure corporate cash positioning isstrong


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How to Mitigate These Issues?

Reign in your audit costs?

Reduce your risk exposure?

Grow your commercial card program?

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U.S. Bank Payment Analytics


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What is Payment Analytics?

Enhances auditing practices byproviding 100% commercial cardtransaction monitoring

Alert: Notifies stakeholders via emailwhen rule violations occur

Case: Allows users to track progresstowards resolving an issue and

violations over time

Enhanced Reporting: Provides

information that tracks credit cardspending trends and data for

forecasting purposes


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How Does Payment Analytics Work?

Payment Analytics

Transaction Alerts

Cases

RULES


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Moving from Reactive to Proactive

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ValueofAct

ion

Time

Detects

relationshipsbetween transactions over time

Event(s)

Proactive Reactive

Issue(s) Problem(s) Loss(es)

$

$$$


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The Brains behind Payment Analytics

Defined templates contain logical arguments(i.e., rules) WHEN THEN statements

Client assigns parameters to the rules WHEN a transaction meets all the conditions of the rule THEN create a response

Alert: Notifies stakeholdersvia email when rule

violations occur Case: Allows users to

track progress towardsresolving an issue andviolations over time

Enhanced Reporting:Data is updated asconditions are met

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Available Rule Templates

Unauthorized Merchant Categories

Merchant Watch List

Transactions Close to Single Purchase Limit Large Spend Increase over Average Spend

Excessive Use of Convenience Checks

Excessive Cash Withdrawals

Weekend or Holiday Purchases

Account Activity Exceeding Limits

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BenefitsImprove Compliance: Manage out-of-policy spend and detectfraudulent activities

Enhance Control: Audit 100% of transactions versus arandom sample

Reduce Risk: Route flagged transactions to the appropriatepersonnel for review

Increase Efficiency: Streamline the audit process with rules

that are consistently and continually applied across alltransactions

Boost Cost Savings: Automate routine audit tasks

Broaden Visibility: Record all case details in one central

databaseExpand Revenue Share Opportunity: Realize growthincentives by identifying spend leakage

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Contact Information

If you have further questions or comments:

Bret Hansen

Vice President of Technology Services, U.S. Bancorp

[email protected]

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