FICO and Jersey Telecom Collaborate to Tackle Authorised Push Payment Fraud

Rhea-AI Summary

FICO and Jersey Telecom (JT) have developed a real-time solution to combat Authorised Push Payment (APP) fraud. The FICO® Customer Communications Service Scam Signal combines telephony signals and card data to detect and prevent financial scams. Currently available in Jersey, the UK, and Spain, the solution has shown promising results in early pilots:

• 41% reduction in the number of people scammed
• 44% decrease in fraud losses from scams
• 55% reduction in false positives

The system analyzes mobile phone behavior and payment data to identify potential scams, allowing banks to intervene with personalized messages to customers during high-risk activities. Major UK banks are implementing the solution, with plans to expand to other markets.

Positive

• Developed first real-time solution to combat Authorised Push Payment (APP) fraud
• Early pilot showed 41% reduction in number of people scammed
• Fraud losses from scams decreased by 44% in pilot
• False positives reduced by 55% in pilot
• Major UK banks implementing the solution
• Plans to expand to other markets beyond Jersey, UK, and Spain

Negative

• None.

Insights

Financial Fraud Expert

This collaboration between FICO and Jersey Telecom marks a significant advancement in the fight against Authorised Push Payment (APP) fraud. The 41% reduction in scam victims and 44% decrease in fraud losses during the pilot are impressive metrics that demonstrate the solution's effectiveness. The integration of telephony signals with card data is an innovative approach that addresses a critical gap in real-time fraud detection.

From an investor's perspective, this development could positively impact FICO's market position and revenue streams. The expansion plans to markets beyond Jersey, the UK and Spain indicate strong growth potential. However, it's important to monitor the scalability of this solution and potential regulatory challenges across different jurisdictions. The 55% reduction in false positives is particularly noteworthy, as it enhances customer experience while reducing operational costs for banks.

Telecommunications Analyst

Jersey Telecom's collaboration with FICO showcases the untapped potential of telecom data in financial security. By leveraging insights from 2G to 5G networks, VoLTE and Wi-Fi calling, JT is positioning itself as a key player in the fintech-telco convergence. This move could open new revenue streams for telecom operators globally, potentially shifting their role from mere connectivity providers to critical partners in financial security ecosystems.

The involvement of the GSMA and UK Mobile Network Operators in accessing mobile network insights within a privacy-compliant framework is crucial. It sets a precedent for responsible data usage in fraud prevention, which could become a model for similar initiatives worldwide. Investors should watch for potential partnerships between other telcos and financial institutions, as this could signify a new trend in the telecommunications industry.

Cybersecurity Specialist

The FICO® Customer Communications Service Scam Signal represents a significant leap in real-time fraud prevention. Its ability to analyze mobile phone behavior during live transactions adds a important layer of security that was previously missing in APP fraud prevention. The solution's success in reducing both scam victims and false positives addresses two major pain points in cybersecurity: effective threat detection and minimizing disruption to legitimate users.

However, as with any security solution, we must consider the potential for fraudsters to adapt. The effectiveness of this system may lead scammers to develop new tactics that don't rely on phone communications. Additionally, the expansion of this service to landlines will be important to ensure comprehensive coverage. Investors should monitor the system's ability to evolve and stay ahead of new fraud techniques, as well as its adaptability to different telecommunication infrastructures globally.

Innovative combination of telephony signals and card data delivers first real-time solution to spot scams with early pilot reducing the number of people scammed by 41%

LONDON--(BUSINESS WIRE)-- In the fight against the growing problem of financial scams, global analytics software leader FICO has collaborated with Jersey Telecom (JT) to develop a powerful solution that enables direct, near real-time intervention to protect customers.

FICO and JT worked with leading UK banks to identify the most relevant telephony signals that indicate an active scam. The FICO^® Customer Communications Service Scam Signal, currently available in Jersey, the UK and Spain, and with plans to expand to other markets, is the first real-time application of telephony data being used with customer and payment data to tackle the issue of Authorised Push Payment (APP) fraud.

“Authorised Push Payment fraud is where consumers are tricked into sending authorised payments to scammers,” explained Clare Messenger, Head of Mobile Intelligence Solutions at JT. “This type of fraud is growing around the world; 2023 losses in the UK alone reached £460million. To protect customers from being caught by such scams, the new FICO and JT solution enables direct intervention with the customer to quickly determine if a payment should proceed.”

To build the solution, JT worked with the GSMA (Global System for Mobile Communications Association) and the UK Mobile Network Operators to access various mobile network insights within a privacy compliant framework that protects customers’ personal data. FICO analysis found strong correlations between a customer’s mobile phone behaviour and the likelihood that a scam is taking place. For example, a customer may be actively coached through security or manipulated by a fraudster into making a payment during a mobile phone conversation.

The Scam Signal uses advanced analysis of real-time network data together with customer and payment data, during live transactions, to effectively detect and mitigate social engineering attempts aimed at deceiving and defrauding account holders. The Scam Signal can incorporate this data from across 2G, 3G, 4G, 5G, VoLTE and Wi-Fi calling for multiple mobile network operators and is currently being extended to support UK landlines.

“The integration of Scam Signal within the FICO Customer Communications Service allows banks to present customers with personalised, omni-channel and highly contextualised messages that break the scammer’s spell for high-risk activities,” said Adam Davies, vice president of product management at FICO.

“These messages can be built into conversation ‘flows’ that respond in real-time to the actions the customer takes. For example, if a customer hesitates or looks to progress a payment, additional messages can be sent, and different options offered, such as suggesting delaying the payment or offering to speak to a fraud prevention specialist.”

Major high street banks in the UK are implementing the product, with the first to pilot it reporting that they reduced the number of people scammed by 41%, decreased fraud losses from scams by 44% and lowered false positives (payments flagged as fraud that are in fact genuine) by 55%.

About FICO

FICO (NYSE: FICO) powers decisions that help people and businesses around the world prosper. Founded in 1956, the company is a pioneer in the use of predictive analytics and data science to improve operational decisions. FICO holds more than 200 US and foreign patents on technologies that increase profitability, customer satisfaction and growth for businesses in financial services, insurance, telecommunications, health care, retail and many other industries. Using FICO solutions, businesses in more than 100 countries do everything from protecting 4 billion payment cards from fraud, to improving financial inclusion, to increasing supply chain resiliency. The FICO^® Score, used by 90% of top US lenders, is the standard measure of consumer credit risk in the US and has been made available in over 40 other countries, improving risk management, credit access and transparency.

Learn more at https://www.fico.com

FICO is a registered trademark of Fair Isaac Corporation in the U.S. and other countries.

About Jersey Telecom

Jersey Telecom (JT) has evolved from a government-owned telecom entity into a successful global tech company, offering innovative connectivity, mobile intelligence, and business solutions. With over 135 years of history and headquartered in the British Channel Islands, JT employs over 500 people worldwide. In 2018, JT became the first telco to provide fibre-to-the-home for all broadband users. In 2023, JT began upgrading this network using Ericsson’s energy-efficient technologies to launch 5G, in that same year JT acquired Spectrum Message Services, expanding their Mobile Intelligence services, which now provides secure transaction alerts to over 135 million customers globally.

Learn more at JT International | JT International (jtglobal.com)

View source version on businesswire.com: https://www.businesswire.com/news/home/20240918964472/en/

For further comment contact:

FICO UK PR Team

Wendy Harrison/Parm Heer

ficoteam@harrisonsadler.com

0208 977 9132

Source: FICO

FAQ

What is the new FICO and Jersey Telecom solution for combating financial scams?

FICO and Jersey Telecom have developed the FICO® Customer Communications Service Scam Signal, a real-time solution that combines telephony signals and card data to detect and prevent Authorised Push Payment (APP) fraud.

How effective is the FICO Scam Signal in reducing financial fraud?

Early pilots of the FICO Scam Signal showed a 41% reduction in the number of people scammed, a 44% decrease in fraud losses from scams, and a 55% reduction in false positives.

Where is the FICO Customer Communications Service Scam Signal currently available?

The FICO Customer Communications Service Scam Signal is currently available in Jersey, the UK, and Spain, with plans to expand to other markets.

How does the FICO Scam Signal work to prevent financial scams?

The Scam Signal analyzes real-time network data, customer data, and payment data during live transactions to detect potential scams. It then allows banks to send personalized messages to customers during high-risk activities to prevent fraud.

Which banks are implementing FICO's new anti-fraud solution?

Major high street banks in the UK are implementing the FICO Customer Communications Service Scam Signal, with one bank already reporting significant reductions in scams and fraud losses during the pilot phase.