HSBC has completed the roll-out of a bank cardfraud management systemacross all its UK operations,
including First Direct and M&S Money.
The system, developed in partnership with analytics software
firm SAS, protects 100% of HSBC's card transactions in 80% of its
operations around the world.
Since HSBC launched the system in the US in 2007, it has gone
live in all the bank's major regions of operation, including
Europe, Asia Pacific, Hong Kong and Brunei.
The remaining regions, such as the Middle East and South
America, will go live in the next two to three years.
HSBC will soon begin sharing fraud data with
Halifax Bank of Scotland (HBOS), which is to become the second
bank to use the SAS Fraud Management software.
"The next set of [fraud detection mathematical] models will
include data from both banks," said Derek Wylde, head of fraud risk
at HSBC.
According to Wylde, this will further improve the system's
accuracy in identifying fraud because it will be using a bigger
sample of fraud data.
HSBC is to continue its collaboration with SAS by deploying its
fraud technology across all banking products, including online
banking and contactless card payments.
"The system will build a typical usage profile for each customer
and create alerts for any anomalous behaviour," said Wylde.
The cross-channel system will provide a single view of customers
across all the products they use in compliance with
Basel 2
regulations.
"This will help identify cases where customers are attacked on
more than one front at the same time, overcoming a silo approach to
fraud monitoring," said Wylde.
The expanded system will enable HSBC to take fraud detection
beyond cards to all fraud, including internal fraud by staff.
Wylde said the
cross-channel system was originally scheduled to go into
operation this year, but contracts are now in place for the project
to go live in a year's time.
HSBC also plans a phased roll-out of the cross-channel system
around the world, beginning with operations in Hong Kong.
"Bringing all the data sources into a single system will give us
a bit more of an edge in identifying fraud earlier and more
accurately," said Wylde.