Fraud

Intelligent fraud detection

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Rainbird was approached by an international credit card provider who processes over half a million transactions per minute.



The number of reported fraud cases in the financial sector nearly doubled in the last year, with businesses struggling to keep up with ever-shifting vectors of attack, from new modes of mobile fraud to skyrocketing rates of identity fraud.

They wanted to improve fraud detection, reduce the time it takes to deal with false positives and improve customer satisfaction.

The ISMG reported that only 34% of C-level leaders have high confidence in their organisation’s ability to detect and prevent fraud.

The challenge
The complicated fraud-detection process required an offshore team to continuously monitor data feeds on multiple screens to determine whether customer transactions flagged by their algorithms were fraudulent or genuine. This manual process led to erroneous judgements, resulting in many unnecessarily blocked cards and huge frustration for customers.

40% of cardholders abandon cards after false declines, and a quarter of these people move their cards to the back of their wallets

In 20% of cases, the offshore team phoned the customer directly to request additional information, which resulted in expensive security steps, language barriers, and, in some cases, lost customers.

The solution
We spent time with the company’s fraud-prevention Subject Matter Experts (SMEs) to create a Rainbird model that identifies fraud by replicating their best-practice methods, without relying on humans. This reduced the time spent on each case, and improved accuracy and consistent decision-making.

To do this, Rainbird took the logic from over 50 fraud cases, along with the expertise of three of the business’ best-performing SMEs to model a Rainbird-powered fraud engine that represented the company’s best-practice procedures, which was capable of handling multiple concurrent transactions simultaneously and consistently.

We also created a new model for prioritising cases that needed expert involvement so that the most high-risk cases can be assessed by the client’s most experienced on-shore team members.

Rainbird automatically calculates every transaction with a percentage likelihood of being genuine or fraud.

The outcome
The result of our work was an 85% automation of all cases and a 60% reduction in back-office processing costs.

The new process avoids the less accurate and inconsistent judgements that were being made by the client’s offshore team. 

The company benefits from:

  • Increased detection rates
  • A reduction in the number of false positives
  • Cost and inconvenience of outbound phone calls to customers

Calls to customers are now backed by Rainbird’s in-built Audit trail, which can explain why Rainbird has concluded a fraud risk and better inform the customer conversation leading to consistent, better-quality calls, and demonstrably better customer outcomes.

Become a truly intelligent automation and decision-making organisation
Find out how Rainbird can ensure every decision in your organisation benefits from the required expertise.

81% of UK businesses say a shortage of talent is the biggest hurdle to AI adoption

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The research, conducted by Vanson Bourne on behalf of Rainbird, surveyed senior decision-makers in enterprise organisations. It found that the main reason behind businesses not implementing AI is a shortage of talent in their workforce for handling automation processes. While this was the overall biggest barrier to adopting AI in the UK, when broken down into professional services, financial services, insurance and IT, the data highlighted a number of different concerns across business functions.

Find the full report here

James Duez, CEO at Rainbird, commented: “In order to truly understand what processes will benefit from AI, businesses must review their strategies. Rather than pushing AI investment into IT departments, organisations should recognise where the most important decisions are being made – within the business. Symbolic tools are business-friendly, rapid to work with and completely auditable and it is these that will unlock the streamlining and automation of operational decisions.”

Become a truly intelligent automation and decision-making organisation
Find out how Rainbird can ensure every decision in your organisation benefits from the required expertise.

Neural networks can disempower human workers: the case for human intervention amidst rapid AI adoption

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Neural networks have become the alchemy of our age, the search for a magical, mystical process that allows you to turn a pile of data into gold. It is widely seen as a silver bullet that can generate new insights and expert decisions on an unprecedented speed and scale. Yet this ignores the reality that ‘deep learning’ systems are difficult to create or audit and most organisations lack the necessary in-house expertise or ‘data hygiene’ to use it effectively.

To read the full article, see Neural networks can disempower human workers: the case for human intervention amidst rapid AI adoption on Digitalisation World. 

 

 

 

Become a truly intelligent automation and decision-making organisation
Find out how Rainbird can ensure every decision in your organisation benefits from the required expertise.

Ghosts in the Machine: How Machine Learning is Transforming Business

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According to new research from Rainbird – the AI-powered automated decision-making platform, 81% of those surveyed revealed that their organisation planned to increase investment in AI over the next five years. Of those who plan to increase spending on automation technologies, 22% suggested this investment would be significant. Interestingly, the financial sector is set to be the biggest adopter, with 94% of those surveyed planning to increase investment in AI over the coming years.

James Duez, CEO at Rainbird, commented: “AI should be brought into organisations to help employees, not hinder them. UK organisations – and beyond – need to fundamentally change the way they are adopting AI and, think beyond big data and machine learning. ‘Data scientists only understand black box solutions, and there are huge benefits to be had by moving towards more transparent symbolic technologies which can achieve automation outcomes beyond those available with data-only approaches. Such accessible tools also have the added benefit of addressing the skills gap by making AI far more accessible to employees without a degree in data science.”

To read the full article, see Ghosts in the Machine: How Machine Learning is Transforming Business on Silicon UK.

Become a truly intelligent automation and decision-making organisation
Find out how Rainbird can ensure every decision in your organisation benefits from the required expertise.

Predictions of future robo-advice 'premature'

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Mr McNamara, chief executive of the fintech group Evalue discusses with Ben Taylor, CTO of Rainbird, the issue of regulation and the challenges businesses faced within the robo-advice space.

Mr Taylor said: “Regulation will look very different depending on what type of robo-advice is being used. It might be that we’re using statistical methods to do some prior analysis of data to do future predictions. Regulating that would be a very different kettle of fish to regulating some sort of human type reasoning, which you could explain. It depends on the underlying technology and what the customer outcomes are expected to be.”

To read the full article, see Predictions of future robo-advice ‘premature’ on The FTAdviser.

Become a truly intelligent automation and decision-making organisation
Find out how Rainbird can ensure every decision in your organisation benefits from the required expertise.

91% of UK IT businesses say a shortage of talent is the biggest hurdle to AI adoption

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The adoption of Artificial Intelligence (AI) and automation technologies in the UK is still being stunted by a lack of digital skills in businesses according to new research by Rainbird, the AI-powered automated decision-making platform.

To read the full article, see 91% of UK IT businesses say a shortage of talent is the biggest hurdle to AI adoption on Digitalisation World.

Become a truly intelligent automation and decision-making organisation
Find out how Rainbird can ensure every decision in your organisation benefits from the required expertise.

How AI can simplify mergers and acquisitions

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CTO of Rainbird, Ben Taylor, is featured in IT Pro on the importance of auditability in automated M&A decisions:

“If a financial institution gave incorrect advice that led to a failed merger, it might be difficult to tell how the neural network got the decision wrong.”

Read the full article, How AI can simplify mergers and acquisitions, on IT Pro.

Become a truly intelligent automation and decision-making organisation
Find out how Rainbird can ensure every decision in your organisation benefits from the required expertise.

How to keep up with a changing fraud landscape

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Become a truly intelligent automation and decision-making organisation
Find out how Rainbird can ensure every decision in your organisation benefits from the required expertise.

Omnichannel and risk protection: a delicate balancing act

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Today, innovation and protection need to sit together – they can no longer be at odds. It may be a delicate balancing act, but it’s one that financial institutions will have to perform if they want to keep hold of their customers.

In response to this new demand, AI-powered automation can provide companies with a single view of the customer journey and potential fraud access points, meaning they can offer customers omnichannel banking without compromising the security or seamlessness of the experience.

PSD2: a tectonic shift towards a digital single market

Demand for omnichannel convenience is on the rise. Consumers want to be able to shop anywhere, anytime, regardless of their preferred means.

75% of consumers say it’s important or extremely important to be able to easily switch between channels when interacting with their bank.

One of the factors bringing about this shift is the Second Payments Services Directive (PSD2). This new European mandate dictates that banks and merchants must allow access to new payment providers, such as social media platforms and various new fintechs. This means that existing fraud detection systems will be under immense pressure to cope with the increased velocity of real-time payments and higher data throughput when more channels are in use.

Friction costs businesses their customers

Somehow, financial institutions need to be able to provide omnichannel without introducing friction, because customers won’t settle for anything less than a seamless experience. We’ve already seen this with card payments in recent times: according to Javelin, nearly 40% of cardholders abandon cards after false declines, and a quarter of those people move their cards to the back of their wallets. Transaction friction costs payment providers their customers.

More channels = more blind spots 

Convenient for customers though it may be, omnichannel banking poses unique security challenges.

A Riskified study found that fraud prevention may be taking a backseat to a more customer-centric approach; companies are becoming too preoccupied with omnichannel user experience and mobile payment performance to focus on security issues.

But the threat of omnichannel is very real. The more channels there are, and the more siloed data there is to track, the more potential weak spots appear.

Unite organisational silos 

One of the keys for banks to make sure their security systems keep up with omnichannel technology lies in uniting organisational silos that deal with the different stages of fraud. Risk identification, customer behaviours – they all need to work in unison, under the same framework. A disparate view of a fraud case often means that investigators and analysts have multiple views of customer risk. Some fraud risks may be missed by certain silos or separate systems, or it may take longer to review cases across different departments – potentially delaying legitimate customer journeys.

Multiple channels, single platform

To keep up with the rate and expanse of omnichannel payments, businesses will need to house their fraud processing under an automated decisioning platform that can seamlessly integrate with multiple interfaces and solutions.

The benefits of a single fraud decisioning platform are manifold. They can:

  • provide a single view of the customer journey and potential fraud access points.
  • take data and behaviours from a large array of locations to deliver a holistic approach to detection and investigation.
  • be encoded with a company’s fraud expertise, meaning that the highest standard of fraud processing can be applied across various channels and large data sets to deal with multiple cases simultaneously.

Automating fraud processing across channels and with a bedrock of human expertise means that cases are more likely to be correctly spotted, less likely to be falsely flagged, and can be dealt with faster.

The end result: increased efficiency, less friction in transactions, and as a result, more customer loyalty.

Become a truly intelligent automation and decision-making organisation
Find out how Rainbird can ensure every decision in your organisation benefits from the required expertise.

Ben Taylor talks Explainable AI

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Rainbird’s CEO & Co-Founder talks about Explainable AI & Transparency.

Become a truly intelligent automation and decision-making organisation
Find out how Rainbird can ensure every decision in your organisation benefits from the required expertise.