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Digital Resolve’s Fraud Analyst is a risk-based authentication solution designed to provide an extra layer of security to protect online accounts, information and transactions against fraud and identity theft. Fraud Analyst is the most effective application of its kind. Leveraging the company’s patented IP Intelligence technology, which uncovers information about online users based solely on their IP addresses (i.e. country, state and city location; domain names; Internet Service Provider; etc.), Fraud Analyst builds profiles of the way in which users access their accounts — spotting anomalies in real time and further authenticating users who are acting outside of their normal behavior profile. Furthermore, a powerful set of research, analysis and reporting tools allows Fraud Analyst customers to gain new insights into their online channels, providing the means to proactively mitigate fraud losses and understand emerging fraud patterns — both today and in the future as the online criminals evolve tactics.
Fraud Analyst was designed with the balance between security and convenience in mind. It was the first risk-based authentication solution to be deployed in North America and operates behind the scenes to preserve the normal customer experience while reducing online fraud by as much as 90 percent.
For this particular study, the focus is on the implementation of Fraud Analyst at Lockheed Georgia Employees Community Credit Union (LGE). LGE’s project was started in order to provide a second layer of, or multi-factor, authentication to further protect online users of Internet banking services, as required by Federal regulation. Additionally, LGE required the project to have minimal impact on its members during log-in and for log-in credential maintenance. Furthermore, Digital Resolve had to address LGE’s internal requirements to keep the costs in line while providing superior service to its members.
Technology Contributions: Proven, Seamless and Compliant
LGE evaluated a number of solutions but selected Digital Resolve’s Fraud Analyst because it met all project criteria and was proven to reduce online fraud. The technology seamlessly provided a second layer of authentication and met the requirements set forth by the Federal Financial Institutions Examination Council (FFIEC). It also met LGE’s goal of minimal impact to online members.
“A key factor in the implementation of Fraud Analyst was that it was the least invasive solution for our members,” said Stanley Hixon, supervisor of Network Services and Security for LGE Community Credit Union. “There was less than one percent membership response of any kind. It just did not impact our online banking customers, which was one of the key criteria in our technology selection process.”
The implementation of Fraud Analyst helped those involved with the LGE project that it was supposed to help. It fundamentally changed how tasks were performed previously, as well.
New Advantages Realized Through Implementation
The banking log-in activity reporting and analysis, offered through the project, has given LGE one new advantage. Specifically, the credit union can now better understand the behavior of its members and of the criminals attempting to fraudulently log in to members’ online accounts.
“We have gained an incredible perspective on who is using our online banking channel and how they are using it,” said Hixon. “We were all surprised, for example, to see how many members who are actually using online banking outside of the country. All of the knowledge we’ve gained has helped better serve our members in two key ways. We can now be more responsive and in-tune with the way in which members access their accounts. More importantly, we now have the ability to actively block malicious log-in activity, thus providing a truly secure online experience for our members.”
Another added value of the project has come from an operational standpoint. Fraud Analyst allows the LGE team to monitor data that might influence the products the credit union brings to market. For example, when Fraud Analyst was first rolled out, the majority of LGE’s membership had two or less profiles, implying that they were logging into online banking from work and home. By monitoring the way in which its members’ account access behaviors change, say the average number of profiles jumps to four per member, LGE might determine that its membership is becoming more transient. Thus, it might be time to consider offering mobile banking.
“This is a project advantage that allows us to strategically plan new product roll-outs in an operationally efficient way that truly maps to our members’ needs,” added Hixon.
Big Benefits, Efficiencies Add New Context to Fighting Fraud
“Fraud Analyst has helped LGE increase Internet banking activity thus reducing banking transaction costs,” said Hixon. “As we implemented our new authentication project, we saw an increase in the number of members logging in and utilizing our online banking channel.”
Another way in which the credit union has benefited in terms of operational efficiencies is through the process automation brought to LGE’s environment.
“Before we implemented Fraud Analyst, Stan had to manually pull data across systems and correlate the date to find trends,” said Laura King, vice president of Information Technology at LGE Community Credit Union. “Because of Fraud Analyst’s reporting and analytics tools, Stan can cut to the chase and save hours of manual review. This has allowed us to be much more proactive in our approach to fraud prevention. If a member is compromised, we can go back and see what happened, allowing us to help the member and shore up our defense strategy.”
Not only has manual review time been significantly reduced, but Fraud Analyst has also allowed LGE to add new context to security incidents across the organization by comparing these events to online members’ behaviors to spot shifts in the collective behavior of their online banking channel.
Additionally, the exceptional aspects of the project should not go unmentioned. With Fraud Analyst, abnormal log-in behavior gets challenged and tracked in detail, allowing LGE to simplify the online banking experience for members, while keeping the criminals out. With Fraud Analyst, the credit union can closely track abnormal log-in activity and approve log-ins without administrative intervention. Conversely, log-in activity that continues to stay outside of the norm is also tracked and can be blocked automatically. This flexibility is afforded based on a rules engine (with models) that is easily configurable by LGE in order to address the changing nature of fraud within its own online landscape.
No Obstacle Too Tough to Overcome
The regulations set forth by the FFIEC prompted LGE to investigate additional safeguards for member log-ins. However, many members and even credit union employees were not aware of these regulations. This meant an entire business process change needed to occur. LGE wanted to be careful not to disrupt members in their normal online banking activities and to ensure that all employees understood the coming process changes in order to keep things “business as usual.”
“To overcome the impending changes, we launched an awareness program to inform the membership and our employees of the changes that were coming,” said Hixon. “As this project would affect many areas of our business, the first group we brought into the fold was the customer service center team so that we could provide training and ensure understanding of the project as well as the impact that it could possibly have on our members. As it turned out, the team was also invaluable in providing feedback on the implementation and offering ways to minimize the impact to members.”
By proactively educating both employees and members, Hixon said the project went even smoother than anticipated.
An Operational, Effective and Embraced Project
The LGE project is fully operational and has achieved its intended goals.
“The ability to detect and prevent Internet banking fraud has greatly improved to the point where proactive intervention is possible,” said Hixon. “This will have a positive effect on fraud costs in the financial industry and save taxpayer money in reducing Internet fraud investigation costs — in turn, allowing us to put more money toward meeting the needs of our members and the community.”
LGE rolled out its authentication project in phases in order to measure progress and impact to its members. During this roll-out period, the members embraced the new authentication measures, and since the project completion, LGE — unlike many of its peers using other authentication solutions — has enjoyed an increase in the number of members utilizing its online banking service.