SmartScore - Case Study - The ai Corporation · PDF filedata, comprising over 250 ... management is required and this approach has been continued in ... while maintaining comparable

Payments intelligence to enrich, Protect and grow your business

The ai Corporation Limitedsurrey research Park, 20 nugent road, guildford, gu2 7aF+44 (0) 1483 661240 | www.aicorporation.com | [email protected]

Large multinational bank reduces fraud and operational costs with ai SmartScore®

The ai Corporation has worked with a large multinational bank, to demonstrate how ai’s SmartScore® software can enhance fraud detection and cost reductions to businesses that process very high volumes of financial transactions.

SmartScore® - Case Study



SmartScore®

SmartScore® is based on ai’s proprietary technology which automates and optimises the creation and subsequent evaluation of neural models for automated fraud prevention.

SmartScore® can be used as either a standalone product, reducing rule complexity and increasing detection rates for fraudulent transactions, or as a complementary service to existing transaction processing and rules platforms, such as ai’s RiskNet, which is currently used by this particular bank; this provides greater certainty that a transaction is fraudulent. SmartScore® is also available as a cloud-based server to reduce the operational cost of creating and managing neural models for fraud detection.

At the start of the project, this bank gave ai 8 months of transactional data, comprising over 250 million transactions with a fraud rate of 0.033%, representing an operational cost of more than US$100,000 per month.

Automated learning & predictionThis data was then used by SmartScore® to learn which combinations of transactional attributes were most commonly associated with fraudulent activities and to use those combinations to create neural models that could then be deployed to predict future fraud cases, while also reducing the number of false alerts.

Having developed and deployed fraud detection software for nearly two decades, ai understands that a multi-faceted approach to fraud management is required and this approach has been continued in its predictive analytics platforms. By viewing fraudulent behaviour

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through multiples lenses, ai has proven that a combination of global and specialised neural models provide unprecedented detection and false-alert rates.

Using this approach, SmartScore created five neural models from seven months of the bank’s transactional data. These models were then deployed to ai’s Scoring Engine to apply scores of between 0 and 1,000 to the remaining one month of data; the higher the score, the greater the probability that the transaction is fraudulent.

The results of this project have demonstrated that SmartScore® can be deployed using existing resources, either to significantly increase fraud detection rates, or to identify a comparable value of fraud, whilst at the same time achieving operational savings by reducing the number of alerts that need to be reviewed.

Higher detection ratesAfter applying the results of the scores against the transactions the bank had previously accepted, while maintaining comparable operation costs, SmartScore® identified 84% of the fraudulent activities, an increase of 16% over the bank’s existing active rules, equivalent to more than US$15m of fraudulent transactions per year, and an increase of US$3m compared with their active rules.

SmartScore® also reduced the number of false alerts by over 70%, while maintaining the banks existing fraud detection rates, reducing the annual cost of fraud management by more than US$1.3m.

Fewer false alertsFurthermore, when SmartScore® was used as a complementary fraud detection solution alongside the banks existing software, it resulted in much lower operational costs. 57% of fraudulent activities were identified, while reducing the ratio of false alerts to fraudulent transactions from over 32-to-1 to just 6-to-1.

ai recognises that fraud management solutions need to constantly adapt to evolving criminal behaviour which is why SmartScore® was designed to rapidly deliver and adapt its neural models. Each of the five neural models used in this particular project were created in less than a day, which allowed the bank’s end-users to assess and optimise the performance of the models within one week, compared with the usual weeks and months.

These results endorse the increasingly prevalent view that predictive automated solutions, such as SmartScore®, can be deployed to release valued and knowledgeable staff from recurring decision making exercises, and instead allow them to focus on more complicated tasks that require the human brain’s creativity.



ai Overview Founded in 1998, ai has a long and exciting heritage as one of the world’s leading companies in fraud, risk management and pioneering intelligence from payments data.Our unique solutions, including our new state-of-the-art neural technology, protect and enrich the payments experiences for more than 100 banks, over 3 million multi-channel merchants and over 300 million consumer cardholders. We also monitor in excess of 20 billion transactions and authorisations each year.

For over 20 years, ai has provided solutions to some of the world’s largest financial institutions, international merchants and other major payment service providers. Today, our unique self-service fraud detection solutions are considered by many industry thought leaders to be the best in the world.

Trusted around the globeai has longstanding client partnerships all over the world, who enjoy outstanding products and services which are based on making things simple for them – they are truly self-service and easy to use. This means our customers can make decisions and implement them immediately, unlike many of our competitor’s products.

Innovation beyond fraud – reusable technology assetsai’s “best of breed” solutions are designed to help our clients grow profitably. As well as optimise risk management, they are flexible enough to be applied to other business processes that require detailed consumer insight for marketing or pricing.

These innovative easy to use self-service/self-learning solutions have been deigned to help provide our customers with greater operational controls. By doing this we constantly strive to help our business partners create superior returns on their investments in our solutions. In fact, two of the International Institute of Analytics ten predictions for 2015 were that analytics, machine learning, and cognitive computing will increasingly take over the jobs of knowledge workers and that automated decision-making will come of age in 2016.

At ai we provide innovative technology, to help you grow profitably.

For more information please contact [email protected]

ai Corporation Ltd 20 nugent road

surrey research Parkguildford

surrey gu2 7aFUnited Kingdom

T +44 (0) 1483 661240E [email protected]

@ai_worldwide The ai Corporation www.aicorporation.com

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SmartScore - Case Study - The ai Corporation · PDF filedata, comprising over 250 ... management is required and this approach has been continued in ... while maintaining comparable