SAS ML is teaming up with ThreatMetrix to apply the latter’s digital identity intelligence. Today’s consumers apply for credit at any time and from anywhere – and expect an immediate response (preferably a favourable one). This is driving change.
“According to our network data, one in nine new online account applications is fraudulent,” said Leah Evanski, vice president of Alliances at ThreatMetrix. “The ThreatMetrix Digital Identity Network’s cross-industry, global shared intelligence, combined with SAS’ industry-leading fraud detection solutions, will give customers a tremendous advantage in identifying fraudulent applicants and enabling a better experience for everyone else.”
To satisfy their customers’ expectations, financial institutions must make prompt credit decisions, often in seconds:
- incorrectly deny a loan or credit line, and they risk losing a customer
- granting credit to (say) fraudster is a mistake that already costs banking billions each year.
Differentiating between the valued customer and the would-be fraudster is the goal of SAS joining up with digital identity solutions provider ThreatMetrix (a LexisNexis company). The alliance seeks to help organisations offering credit to:
- improve their understanding of the ‘who’ behind online credit applications
- provide a new edge in rooting out fraud and identity theft (as well as avoid synthetic identities).
“Banks are struggling with authentication measures and strategies across enterprises, knowing they must somehow strike that critical balance between security and customer convenience,” said James Ruotolo, director of Product Management and Product Marketing for Fraud and Security Intelligence at SAS.
“Who is really applying for credit on the other side of that phone, tablet or computer? That’s a billion-dollar question for the industry, which knows the foundation of fraud prevention is understanding true identity.”
The importance of data
At the heart of all authentication is data. ThreatMetrix analyses more than 110 million transactions per day across more than 6,000 customers around the world. By tracking and identifying associations between tokenised, crowdsourced data points across its global network, ThreatMetrix derives insights into the true digital identity of users.
SAS will enrich that data to inform the automated, predictive models that help determine the likelihood of fraud and accelerate accurate decision making. This will come in the form of artificial intelligence (AI) which has the ability to improve the speed and accuracy of fraud prediction.
Yet effective AI relies on large data sets. Using credit application data alone, AI-driven models achieve a certain level of accuracy. Adding complementary data sources to those applications further improves accuracy – which identifies more fraud and avoids false positives (which introduce costs as well as unnecessary customer friction).
With deep insight into 1.4 billion anonymised digital identities, ThreatMetrix ID delivers the intelligence behind the millions of daily authentication and trust decisions which try to differentiate between legitimate customers and fraudsters.
“As much as digital data is the cornerstone of a true authentication platform, context is key,” said Stu Bradley, vice president of Fraud and Security Intelligence at SAS.
“The industry is not looking at just the transaction any more but rather the bigger picture of who, what, where and when. By augmenting SAS’ advanced analytics with this global shared intelligence from ThreatMetrix, the normal combination of account markers tied to a real person becomes more easily distinguishable from fraudulent ones. Banks can simultaneously reduce false positives and detect more fraud.”
Enterprise Times: what does this mean
SAS and ThreatMetrix propose to help financial institutions improve their fraud prevention abilities. The key change is from being transaction-centric to becoming identity-centric – an approach that a SAS white paper entitled ‘Detecting and Preventing Banking Application Fraud‘ discusses in more detail.
This alliance should be no surprise. With financial institutions, and those granting customer credit, there is a world-wide need to reduce current losses – which the law-abiding pay for (though few financial institutions want to admit their losses attributable to identity fraud and as few will likely reduce their customer charges even if they do reduce their fraud levels). Nevertheless, anything which drives down fraud must benefit all but the fraudsters and so SAS and ThreatMetrix merit commendation.