Top Mexican Bank Cuts Fraud Using Fair Isaac Technology

Fair Isaac Corporation, the leading provider of analytics and decision management technology, today announced that its industry-leading payment card fraud detection technology is delivering impressive results for BBVA Bancomer, S.A., a leader in consumer banking in Mexico serving more than 12 million customers through 1,700 branches across the nation.

BBVA Bancomer has been using Fair Isaac’s fraud analytics since the mid-1990s to systematically reduce payment card fraud risk for approximately 16 million accounts across multiple lines of business and banking channels, including branches, telephone banking, POS terminals, ATMs, and online banking. By the late 1990s, the lender had lowered its fraud losses from 100 basis points to under 10 in its credit card portfolio. By 2003, the bank had achieved a 70 percent reduction in debit card fraud.

This year, BBVA Bancomer rolled out Fair Isaac’s fraud detection analytics to protect its online card transactions. Since then, the bank has experienced an 80 percent reduction in fraud incidents.

"We are extremely pleased with the excellent results we’ve achieved with Fair Isaac’s Falcon technology as a key part of our fraud management program," said Gaston Huerta, Director of Fraud Prevention at BBVA Bancomer. "It allows us to maximize our fraud defenses by having multiple solutions work in a collaborative manner and offer our cardholders the best protection possible, while controlling fraud losses and operational costs for mitigation. We can react to existing and emerging fraud schemes more quickly and reduce losses across multiple business lines and customer touchpoints without negatively impacting our good customers."

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Fair Isaac has worked with BBVA Bancomer since the mid 1990s when Mexico’s financial crisis and devaluation of the peso resulted in a dramatic increase in card counterfeiting. By implementing Fair Isaac’s Falcon™ Fraud Manager, BBVA Bancomer has been able to detect fraud before customers and merchants noticed problems, and take early action to minimize negative impact, while enabling the lender to maintain top-notch customer service and grow sales.

Based on its successful deployment of Falcon Fraud Manager to protect its credit card portfolios, the bank decided to expand its commitment to Falcon analytics to protect its debit portfolios, and more recently, to protect its online channel from fraudulent activities such as keystroke logging.

Keystroke logging has become a common problem in Mexico at public Internet sites, where fraudsters log all key strokes entered on a particular computer in order to retrieve and use the information for illegal purposes. By using Fair Isaac’s advanced fraud analytics, the bank is now able to detect when a demand deposit account has been compromised through the online channel by recognizing suspicious movement of funds between accounts within or outside of the bank.

"As the success of BBVA Bancomer illustrates, leading financial institutions not only need a strong commitment and expertise for managing fraud, but also a robust and scalable enterprise fraud management approach that provides all-points protection against the multi-faceted nature of fraud," said Robert Duque-Ribeiro, Vice President of Financial Services for Fair Isaac’s Global Strategic Clients and Latin America. "Fair Isaac’s Enterprise Decision Management solutions for fraud and identity theft detection are known worldwide for their effectiveness in helping businesses across industries cut fraud losses and protect their customers from fraudulent transactions."

The Falcon solution uses a combination of sophisticated neural network models, patented account profiling technologies, case management and flexible, user-definable intelligent rules to analyze payment card transactions for the most subtle signs of fraud. Used to fight payment card fraud for more than 15 years, Falcon Fraud Manager currently monitors more than 450 active accounts across six continents and saves leading card issuers millions of dollars every day.