FICO Machine Learning Algorithms Improve Card-Not-Present Fraud Detection by 30%
Highlights:
- FICO is releasing new payment card fraud detection models focused on making card-not-present (CNP) transactions more convenient and secure.
- CNP fraud is the leading form of card fraud in most countries.
- Based on analysis of more than 4 billion transactions, the new models can significantly reduce CNP fraud losses without increasing false positive rates.
- The new models have been quantifiably proven to double the detection of fraudulent, high-value CNP transactions on the first attempted transaction.
- The models will be released to FICO® Falcon® Platform customers at no additional charge. The FICO Falcon Platform protects more than 2.6 billion payment cards worldwide.
More information: http://www.fico.com/en/latest-thinking/white-paper/5-keys-applying-machine-learning-ai-in-enterprise-fraud-detection
CNP fraud, which includes online card and e-wallet transactions, is the most prevalent form of card fraud in most countries.
"Consumer convenience is driving rapid growth in online transactions. As a result, criminals are looking to use this convenience to their advantage as chip cards and other security features have made physical card fraud more difficult," said TJ Horan, vice president for fraud solutions at FICO. "Our goal is to help card issuers promote a positive consumer experience while protecting them from financial harm. These CNP machine learning innovations are important tools to help issuers spot fraud faster, and take on even greater importance in the light of recent data breaches, which will lead to more fraud attempts."
The Falcon consortium — a pool of anonymized transaction details collected from 9,000 financial institutions worldwide — allows FICO data scientists to test and prove the performance of new models prior to release. Developed and based on analysis of 4 billion transactions, these new CNP machine learning models have demonstrated the ability to:
- Cut CNP fraud losses by 30% without increasing false positive rates.
- Reduce CNP transaction review rates without increasing fraud risk.
- Double the detection of fraudulent, high-value CNP transactions on the first attempted transaction.
"Machine learning algorithms are greedy — they gobble up data," said Dr.
For 25 years, FICO has applied AI-based behavioral analytics to detect fraudulent transactions across billions of payment transactions, with sub-second response times. The FICO® Falcon® Platform protects more than 2.6 billion payment cards worldwide. The company today holds more than 90 patents related to artificial intelligence and machine learning in fraud detection.
About FICO
FICO (NYSE: FICO) powers decisions that help people and businesses around the world prosper. Founded in 1956 and based in
Join the conversation at https://twitter.com/fico & http://www.fico.com/en/blogs/.
For FICO news and media resources, visit www.fico.com/news.
FICO and Falcon are registered trademarks of
View original content with multimedia:http://www.prnewswire.com/news-releases/fico-machine-learning-algorithms-improve-card-not-present-fraud-detection-by-30-300529629.html
SOURCE FICO
Media: Greg Jawski for FICO, Porter Novelli, +1 212-601-8248, greg.jawski@porternovelli.com, or Investors/Analysts: Steven Weber, FICO, +1 800-213-5542, investor@fico.com