Fair Isaac Corporation has released a new product designed to improve card fraud referral decisions at the point-of-sale.
The product, Strategy Science for Fraud Referral, enables payment card issuers to balance the trade-offs between fraud loss, additional sales, and customer impact by "optimising the strategies used to make decisions at the point of sale to approve, decline, or refer purchase transactions".
The company says the package has been developed in a bid to stem the number of false-postives, or transactions incorrectly flagged for investigation, using traditional scoring techniques.
The software draws on data produced by the vendor's Falcon Fraud Manager package to enable lenders to simulate various fraud referral strategies and test their financial impact before deploying them in real time.
Lori Sherer, vice president of strategy science market management at Fair Isaac, says: "This breakthrough solution will provide issuers with unparalleled support to the analytical process of evaluating how a particular fraud referral decision would play out. It will also clearly identify the single, most compelling strategic option, taking into account all of the company's key fraud performance goals."
She says that internal research based on a large, national sample of accounts has shown that this analytic approach to optimising fraud referral decisions enables over $13 billion in additional approved transactions while holding fraud loss in check for a consumer credit card market of over $1 trillion annually.