Small to Midsize Banks Benefit from Reduced Fraud with Award-Winning Fiserv Solution Leveraging FICO Analytics

Payments and financial technology leader wins FICO® Decisions Award for AI, machine learning & optimization, using advanced fraud technologies

Fiserv, a leading global provider of payments and financial services technology solutions, has won a 2022 FICO Decisions Award for AI, machine learning & optimization. Fiserv developed a new fraud mitigation service that has reduced fraud losses, which were already low by industry standards, by 10 to 15% for its small to midsize credit union and bank clients. False declines — legitimate transactions wrongly flagged as fraudulent — decreased by an average of 20%.

“Smaller financial institutions receive the same cutting-edge service without the onerous overheads. Fiserv has democratized fraud mitigation and demonstrated its continued innovation for its bank and credit union clients.”

Highlights:

• Fiserv wins a 2022 FICO® Decisions Award for fraud management
• Fiserv has reduced fraud losses 10 to 15% for its financial institution clients
• False declines decreased by 20% for banks and credit unions

Card Risk Mitigation: EnFact® Advanced Scoring from Fiserv builds on FICO® Falcon® Fraud Manager by adding patented neural network modeling technology to deliver real-time detection of suspicious card transactions. The solution brings together the enhanced artificial intelligence capabilities of Adaptive Analytics, FICO® Fraud Predictor and Global Intelligent Profiles, providing a cohesive, complementary and holistic approach. The grouping of these FICO models enables Fiserv to provide a solution that adapts to fraud as it evolves through any client, cardholder, channel, or transaction type.

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“The current fast-paced payments environment presents the challenge of mitigating fraudulent transactions while simultaneously reducing cardholder friction,” said Patrick Davie, senior vice president, product strategy, Card Services at Fiserv. “Our clients are seeing excellent results from these new capabilities, both in terms of a marked fall off in fraud, and also in a drop in instances of overly-sensitive risk controls blocking legitimate activity — something that is becoming almost as big of an issue as the fraud losses that traditional antifraud technologies are designed to prevent.”

The new offering keeps up with changes in the value, volume, and timing of transactions. It accounts for changes in merchant categories and transaction locations, which are particularly relevant as card-present transactions decreased at the onset of the pandemic and shoppers quickly gravitated online. The weekly delivery of updated FICO Fraud Predictor merchant profiles ensures Fiserv has the most up-to-date merchant risk data, Adaptive Analytics technology identifies new fraud trends as they emerge, while Global Intelligent Profiles monitors ATM machines to identify high-risk terminals. When combined with the cardholder profiles and FICO’s Behavior Sorted List (B-List) technology, Fiserv protected the cardholder experience by understanding what was “normal”, even as transaction patterns shifted.

Fiserv has documented impressive results:

• 10 to 15% reduction in fraud losses for banks and credit unions relative to their performance prior to using the solution
• An average 20% reduction in the false decline rate reducing customer frustration
• 50% decrease in fraud basis points for banks using Fiserv fraud mitigation solutions compared to those not using these tools

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“Fiserv has created an effective new fraud mitigation model in response to a changing market,” said Nikhil Behl, chief marketing officer at FICO. “Smaller financial institutions receive the same cutting-edge service without the onerous overheads. Fiserv has democratized fraud mitigation and demonstrated its continued innovation for its bank and credit union clients.”

“Fraud protection as a service is a compelling idea,” said Sibulelo Ncamani, head of operational risk and governance at Absa Bank and one of the FICO Decisions Awards judges. “Fiserv has combined three technologies so that the sum of these tools is greater than their individual parts. The beauty of the grouping is that it is blended into one, simple to use solution for their customers.”