Credit rating agency Experian says it has improved fraud detection rates by 20% after integrating two previously separate hosted applications.
The company said that the pooling of data between its proprietary Hunter II and Detect systems had also reduced the rate of false positives for mortgage, loan, credit card and other finance and leasing applications on behalf of its financial services customers by a further 20%.
Given the current rate of detection, Experian estimated that the move would prevent more than £1.6bn worth of fraud in the UK financial services sector.
Integrating Hunter II and Detect as an enhanced software as a service (SaaS) offering has allowed the two applications to swap data. Gary Wood, head of Experian’s fraud solutions business, said that integration had effectively doubled the size of Experian's database, feeding back into a new system linked with the application processing systems of financial services organisations.
Wood told Computer Weekly, “Some clients have been using one or the other, and we’ve proven with some big retail banks that detection rates and false positives are improved by 20% [using both together].”
He said that co-ordinating and defining fraud-sharing information across Experian's large customer baseit was a complex task, but pre-launch testing had enabled the systems Experian owns and hosts to link into the processing counterparts of clients and detect overlap of potential fraudulent finance and leasing applications.
“This kind of fraud has increased by 20% in the last six months, since the Chip and Pin migration,” Wood said. “Criminals are looking for another route and making purchases with a genuine card, for instance, where the Pin is known, is less risky than using a stolen one.”
Wood said the cost of the new service was more than offset by the hosted system’s returns, while migration for the companies Experian integrates with had proven relatively straightforward.
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