MERCURY PROCESSING

SERVICES INTERNATIONAL

BETTER FRAUD SOLUTION THROUGH

FRAUD AND IT SYNERGY

Fraud Intelligence and Product Management team

Ljubljana, May 31th 2017

CONTENT

• Introduction

• Business challenges

• Solution

• Results and feedback

(NORMAL)

Mercury Processing Services International was offering to our clients „high end” Fraud management solution.

As this solution was a one-size-fits-all solution, our clients had to mold their business and processes to a software platform.

As a consequence, general satisfaction with Fraud management solution was very low.

INTRODUCTION

(NORMAL)

We managed to do various in-house improvements and workarounds, that lifted possibilities of Fraud management solution

to an new level in order to cover our clients needs, but still, as a long run solution, something had to be changed.

In second half of 2012, development of new in-house overall Fraud Management System (FMS) – Lynx has begun.

3

INTRODUCTION

In 2014 after successfully completing first major Fraud-IT project of replacing 'off-shelf' Fraud management solution with in-

house 'developing' Lynx FMS, client satisfaction rose again, this time about additional 25%, which was very encouraging

and Mercury Processing Services International initiated another Fraud-IT project that upgraded fraud detection and

prevention abilities of Lynx FMS.

Presentation will give an overview of fraud prevention challenges at that time, constraints, idea generation, development/

implementation of proposed module, results and feedback, all that and more to follow about Online Plus module in Lynx

FMS.

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BUSINESS CHALLENGES

What do we actually want?

NUMEROUS FRAUD CHALLENGES

Significant increase of data breach and CNP fraud cases at that time:

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4

5

7

6

8

9

0

4

5

7

5

8

9

0(NORMAL)

Card institutions that don’t have dedicated 24/7 fraud monitoring are usually relying on card limits, customer notifications

(SMS, email) and on predefined simple fraud blockades, depending on complexity of their Real Time Fraud system.

In some cases all above measures combined can be adequate for defined fraud risk appetite, but again there are always

cases that pass through and at the end considerable financial damage can be done.

IMPORTANCE OF QUICK REACTION

* Calculated for approved issuing fraud authorizations in last 3 years

of fraud is occurring in non working hours (or at that time full capacity for

fraud coverage is perceived to be minimal)%Above percentage represents maximum savings

opportunity from dedicated 24/7 fraud monitoring.

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IMPORTANCE OF QUICK-ER REACTION

<5

min

5-1

5m

in

>15

min

Gross Fraud after

first alert creation

Time after first

alert creation

48% 14% 38%

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* Calculated for approved issuing fraud authorizations in last 3 years

IDEA GENERATION

We needed an idea that would be:

Question was:

How to connect fraud scenarios described in, often complex, Near Real Time fraud rules with prevention action?

Complexity of our current Near Real Time (NRT) fraud rules was not possible to migrate to our Real Time systems, but again,

we wanted to increase our prevention possibilities, and we accomplished this with Online Plus module.

SOLUTION

Online Plus module is temporary blocking PAN:

If card is recognized by most predictive NRT fraud rules, in that way stopping ALL further fraud damage on the card +

notification is sent to fraud analyst, alerting him of possible fraud or false blockade customer card

If blocking is initiated directly from Lynx FMS by fraud analyst in case of card suspicious behavior (no need for additional

application/applications, saves crucial seconds)

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1. helpful in all above stated challenges

2. relatively easy and fast to develop

3. must not affect stability and robustness of any of our authorization systems

4. applicable for all our clients on all our back office systems

5. effective in Fraud prevention

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IDEA IMPLEMENTATION

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SOLUTION

This is what needs to be done.

CUSTOMER SATISFACTION

WHY?

• Enjoying pride and pleasure from building well designed systems/ solutions that are improving existing processes,

providing new functionalities or solving users’ problems.

• Enabling users/ customers to be more effective, more productive, happy

WHO?

• Internal and External customers – everybody is somebody’s customer

• Bank’s Fraud team MPSI Fraud team Fraud Development team Authorizations/ System/ Networking/

Operations/…

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“Joy is designing and building something that actually sees the light of day and is

enjoyably used and widely adopted by the people for whom it was intended.”

Richard Sheridan, Joy, Inc.:How We Built a Workplace People Love

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EASIER SAID THEN DONE

Epic story: „As a fraud analyst in bank I want to block any card with ‘one click’ in FCM”

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Multibanking All brands Instantly Logged

SecurelyInfo on Errors On all systems

With status „X”

Soft blockExposed to all

systems

Auto from RE

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RESULTS AND FEEDBACK

Job well done!

0

500

1000

1500

2000

2500

June '16 August '16 October '16 December'16

February '17 April '17

USAGE OF ONLINE PLUS MODULE

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Actions initiated by fraud analyst (block or unblock)

or by fraud rule (block)

Actions initiated by fraud rule (block)

+200%

+400%

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2013 2014 2015 2016

RESULTS IN NUMBERS

Online Plus module together with various other improvements on client’s and on our side as processor resulted in decrease of

last year issuing gross fraud amount.

In just last 12 months Online Plus module declined Fraud authorizations in same amount as the 50% of last year gross fraud for

all our issuing clients amounted to.

Out of which 1/3 was prevented by Online Plus rules.

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-20%

Currently, 30+ active Online Plus rules which made over 2.000 blocking actions (and notifications)

8.500+ different cards have been temporary blocked via Online Plus Module (by fraud analyst or by fraud rule)

50+ different users are using Online Plus module

Quick facts:

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CLIENT FEEDBACK

(NORMAL)

We are satisfied with Online Plus module and with its

current functionalities, still, we support and expect its

further development.

Possibility to temporary block and unblock cards directly

through Online Plus module has improved our efficiency

and speeded up our reaction in risky situations.

It is also of great use to us possibility to create Online

Plus rules which based on already recognized fraud

patterns automatically temporary block card without

manual workload of fraud analyst. Of course fraud analyst

still conducts analysis and if needed unblocks card, again

through Online Plus module. In this way we have raised

highly risky fraud scenarios to higher fraud prevention

level and minimized fraud loses on compromised card.

Since the introduction of the first Online plus rule we

successfully rejected a lot of fraudulent authorizations.

The Online Plus rule was implemented in a manner to

identify cases with very high probability of confirmed

fraud. In a short time period we reached a considerable

amount of the potentially prevented fraud.

The Online Plus module is able to provide banks with

higher quality service due to its efficiency and reliability.

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Online Plus module is very good and useful fraud

prevention tool, which can really save money for our bank.

I think, fraudsters have to hate this our „new weapon“

THANK YOU!

Any questions?

CONTACT US

www.mercury-processing.com

+385 1 6456 041

Radnička cesta 50, 10000 Zagreb