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73% fraud detection at US banks using Actimize

Nice Systems : 23 July, 2009  (Application Story)
Actimize reveals statistics from the use of its wire fraud detection product in its top 5 banking customers in the USA
Actimize, a NICE Systems company, has shared fraud prevention metrics from a top-5 US bank deployment. The bank is using the Actimize Wire and ACH (Automated Clearing House) fraud prevention solution and has detected 73% of all attempted wire fraud transactions in real time using only data from the wire instruction itself. By preventing genuine fraud losses using the Actimize solution, the bank recovered the value of its full software license investment within the first six weeks alone. This client is joining the ranks of other large global banks from all parts of the world that use the Actimize solution for real-time payment fraud prevention.

Prior to implementing the Actimize Wire & ACH Fraud Prevention solution, the top-5 US bank utilized a rule-based review of wire transactions as part of its core banking system. The legacy system did not provide the bank with an easy way to identify or investigative suspicious transactions and had very limited ability to stop transactions in real time. Fraud was only uncovered if it happened to fall within a predefined rule-based, batch report. In contrast, the Actimize solution has detected nearly three out of four fraud attempts at a 1 to 15 false positive rate (other comparable solutions present 50 false positive alerts for every one actual fraud case).

Avivah Litan, VP Distinguished Analyst at Gartner said, “Real-time transactions, such as wire transfers or real-time faster payments (recently introduced in the UK banking sector) demand that that real-time risk assessments be made in seconds or subseconds to fulfill a transaction request[i]. Only a few software providers have proven this capability in the field at large complex client implementations.”

The client case study involved a major US bank that processes hundreds of thousands of wires daily. The client shared the following key results:

* * 73% detection rate – the Actimize solution uncovered nearly three out of four fraud attempts using only data from the wire instruction itself
* 1:15 false positive – out of 15 alerts, one is a genuine fraud transaction; compared to competing solutions with average 1:50 false positive ratios
* Very fast ROI – full license cost recovered in six weeks
* Fraudster attacks focused on large and complex commercial and treasury wires
* Multiple attacks were tied back to Trojan and man-in-the-middle attacks, including some that bypassed physical hardware security layers (tokens)

“True, synchronic real-time blocking is a critical feature for banks, especially as wire transaction times shorten globally,” said Amir Orad, EVP and chief marketing officer at Actimize. “As we’ve seen in the UK, the recently implemented ‘Faster Payments’ initiatives can result in ‘faster fraud’. The increase in retail and commercial wire transactions and the speed at which these payments occur will continue to accelerate. Banks need to make sure this channel is as protected or they will likely experience increased losses.”

Actimize offers a complete payments Risk Management framework, which combines proven real-time wire and ACH Fraud prevention and message filtering with compliance monitoring capabilities for anti-money laundering (AML), sanctions and watch list filtering (WLF). The Actimize solutions execute message filtering and analytics as well as policy monitoring in both real-time and batch modes. This enables customers to prevent fraud and adhere to regulatory guidelines across various payment types including commercial and retail wires, SWIFT, TED, BACS, SEPA, and International ACH.
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