Visa Is Enhancing the Customer Experience While Reducing Fraud with

Predictive Analytics
When card issuers first started using automated business rules software to counter
debit and credit card fraud, the limits on that technology were quickly evident: Customers
reported frustrating payment rejections on dream vacations or critical business trips. Visa
works with its clients to improve customer experience by providing cutting-edge fraud
risk tools and consulting services that make its strategies more effective. Through this
approach, Visa enhances customer experience and minimizes invalid transaction
declines.
The company's global network connects thousands of financial institutions with
millions of merchants and cardholders every day. It has been a pioneer in cashless
payments for more than 50 years. By using Analytics, Visa is supporting financial
institutions to reduce fraud without upsetting customers with unnecessary payment
rejections. Whenever it processes a transaction, Visa analyzes up to 500 unique variables
in real time to assess the risk of that transaction. Using vast data sets, including global
fraud hot spots and transactional patterns, the company can more accurately assess
whether you’re buying escargot in Paris, or someone who stole your credit card is. “What
that means is that if you are likely to travel we know it, and we tell your financial
institution so you’re not declined at the point of sale,” says Nathan Falkenborg, Head of
Visa Performance Solutions for North Asia. “We also will assist your bank in developing
the right strategies for using the Visa tools and scoring systems,” he adds. Visa estimates
that Big Data analytics works; state-of-the-art models and scoring systems have the
potential to prevent an incremental $2 billion of fraudulent payment volume annually.
A globally recognized name, Visa facilitates electronic funds transfer through branded
products that are issued by its thousands of financial institution partners. The company
processed 64.9 billion transactions in 2014, and $4.7 trillion in purchases were made with
a Visa card in that same year. It has the computing capability to process 56,000
transaction messages per second, which is greater than four times the actual peak
transaction rate to date. Visa doesn’t just process and compute— it is continually using
analytics to share strategic and operational insights with its partner financial institutions
and assist them in improving performance. This business goal is supported by a robust
data management system. Visa also assists its clients in improving performance by
developing and delivering deep analytical insight. “We understand patterns of behavior
by performing clustering and segmentation at a granular level, and we provide this insight
to our financial institution partners,” says Falkenborg. “It's an effective way to help our
clients communicate better and deepen their understanding of the customer.”
As an example of marketing support, Visa has assisted clients globally in identifying
segments of customers that should be offered a different Visa product. "Understanding
the customer lifecycle is incredibly important, and Visa provides information to clients
that help them take action and offer the right product to the right customer before a value
proposition becomes stale", says Falkenborg.
How Can Using In-Memory Analytics Make a Difference?
In a recent proof-of-concept, Visa used a high- performance solution from SAS that
relies on in-memory computing to power statistical and machine-learning algorithms and
then present the information visually. In-memory analytics reduces the need to move data
and perform more model iterations, making it much faster and accurate.
Falkenborg describes the solution as like having the information memorized, versus
having to get up and go to a filing cabinet to retrieve it. “In-memory analytics is just taking
your brain and making it bigger. Everything is instantly accessible.”
Ultimately, solid analytics helps the company do more than just process payments. “We
can deepen the client conversation and serve our clients even better with our incredible
big data set and expertise in mining transaction data,” says Falkenborg. “We use our
consulting and analytics capabilities to assist our clients in tackling business challenges
and protect the payment ecosystem. And that’s what we do with high-performance
analytics.”
“The challenge that we have, as with any company managing and using massive data
sets, is how we use all necessary information to solve a business challenge—whether that
is improving our fraud models, or assisting a client to more effectively communicate with
its customers,” elaborates Falkenborg. “In-memory analytics enables us to be more
nimble; with a 100% analytical system processing speed improvement, our data and
decision scientists can iterate much faster.”
Fast and accurate predictive analytics allows Visa to better serve clients with tailored
consulting services, helping them succeed in today’s fast- changing payments industry.