Entercard Doubles Fraud Detection Using FICO Machine Learning

Published February 7, 2019

Entercard, one of the leading Scandinavian finance companies, has sharply reduced its fraud rate and generated massive savings using the FICO® Falcon® Platform to combat payments fraud and communicate with its 1.7 million customers in Denmark, Norway and Sweden. As one of the first companies to use the platform’s machine-learning adaptive analytics capability, Entercard is able to rapidly respond to shifts in fraud patterns, and has reduced net losses in basis points by 60 percent.

For its achievements, Entercard won a 2018 FICO® Decisions Award for Fraud Control.

More information: https://www.fico.com/en/products/fico-falcon-platform

“Entercard’s story is a great example of deploying truly advanced analytics to solve the problem of fraud, which is moving faster than most businesses can match,” said Julie Conroy, research director for Aite Group’s Retail Banking & Payments practice and one of the FICO Decisions Awards judges. “Their remarkable results show the power of machine learning and AI in detecting fraud.”

“Safety for our customers is a key asset for Entercard. We have improved our fraud program and the customer journey through real-time detection and resolution,” said , Yannick Leclerc, Head of Fraud Strategy & Analytics in Entercard Group. “By using the FICO Fraud Resolution Manager, we can instantly contact customers, validate transactions and improve their experience. Our partnership with FICO has paid off in numerous ways for our business and our customers.” Entercard previously used a third-party provider for the key parts of fraud management. “Through an integrated solution we can perform the services in a better way, creating lower costs for the company and a much better customer experience,” says Leclerc. “Our goal was to increase control and reduce the negative consequences of fraud on our customers, our brands, the schemes and the company.”

Entercard implemented the FICO® Falcon® Platform with adaptive analytics and machine learning in-house for all countries, and moved to the cloud-based solution in 2017. This solution includes real-time fraud detection based on AI models, and automates communication with customers through two-way SMS and email.

In addition to identifying fraud faster and immediately working with customers to validate or block a transaction, Entercard saw material cost savings for the block & reissue process. “By leveraging capabilities within Falcon, we can be more prescriptive in our approach to compromise management, and cost-effectively treat compromises while limiting impact to legitimate customer transactions,” said Leclerc.

Wide Range of Savings and Improvements

By managing its fraud program using the FICO Falcon Platform, Entercard has logged a number of benefits:

  • 128 percent improvement in fraud detection rate.
  • 60 percent reduction in fraud net losses (measured in basis points) since 2013.
  • Reduction in net loss per case of 60 percent.
  • Net losses kept at the same levels the past three years despite the fraud attempt rate increasing constantly.
  • Substantial reductions in operating and back office costs.
  • Much quicker response to suspected fraud transactions, reducing fraud losses and increasing customer satisfaction. The transactions per fraud case shrunk from eight to three.
  • Industry-leading Net Promoter Score in the Nordics.
  • Cloud-based solution that ensures Entercard is always running on the latest version of both Falcon and its models.

“Entercard has a world-class fraud team and has invested in best-in-class AI analytics, case management and customer communications,” said Dylan Jones, who oversees FICO’s work in the Nordics. “They lead the region in the fight against fraud.”

Globally, the FICO® Falcon® Platform is the leading payments fraud management solution, protecting more than 2.6 billion payment cards. With the platform, organizations can cost-effectively reduce fraud losses, protect brand reputation, gain efficiencies and improve the customer experience across multiple products, channels and lifecycle stages.

About the Entercard Group
Entercard is a Scandinavian company that provides payment and financing solutions to over 1.7 million customers across Scandinavia. Entercard became a joint venture between Swedbank and Barclays in 2005, and offers credit cards and consumer loans under its own brand re:member as well as other products in collaboration with its partners. Entercard has 450 employees in Stockholm, Oslo, Trondheim and Copenhagen.

About the FICO® Decisions Awards
The FICO Decisions Awards recognize organizations that are achieving remarkable success using FICO solutions. A panel of independent judges with deep industry expertise evaluates nominations based upon measureable improvement in key metrics; demonstrated use of best practices; project scale, depth and breadth; and innovative uses of technology.

The 2018 judges are:

  • Sid Dash, research director at Chartis for risk management analytics
  • Tanya Andreasyan, Editor-in-Chief, FinTech Futures / Banking Technology
  • Anna Milne, editor at Finextra
  • Julie Conroy, research director for Aite Group’s Retail Banking practice
  • Andras Cser, principal analyst – security and risk professionals at Forrester
  • Mon Pernia, head of consumer collections, Globe Telecom (2017 winner)
  • John Rymer, principal analyst – application development & delivery professionals at Forrester