Tackling card fraud: embracing
technological and strategic solutions

Derek Wylde
Head of Group Fraud Risk
HSBC
UK Card Losses £m
    600

    500

    400

    300

    200

    100

      0
          2002   2003   2004   2005   2006...
UK CNP Losses 1995-2007 £m
             300

             250


             200
£ Millions




                          ...
Start with a laugh…




        •   P.C. Vey, Published by the New Yorker, January 16th, 2006
Anti-fraud strategy

 • Render the card number useless if compromised

 • EMV for face to face

 • Remote card authenticat...
EMV - The silver bullet?

  • Fraud at its highest level in UK for years

  • Expensive

  • Is PIN the right CVM?

  • Ef...
3D Secure - MasterCard SecureCode
and Verified by Visa

• Scheme-driven authentication technology, providing
  merchant li...
Remote Card Authentication


 • Alleviates static data vulnerabilities
 • Limits opportunity for compromise and collusion
...
Giving the customer control

• Allow the customer to parameterise his spend

• Straight through processing

• Prevents not...
Fraud detection systems

 • Optimised

 • Up to date models

 • Models for high net worth customers

 • Up to date contact...
Authorisation strategies

• Analysis - there is no substitute

• Get the priorities right

• Exclude low value referrals

...
And finally……...


• Customer education

• SMS

• Contact centre

• Customer complaint handling
Tackling card fraud: embracing technological
and strategic solutions

Derek Wylde
Head of Group Fraud Risk
HSBC
Tackling Card Fraud   Hsbc Derek Wylde
Tackling Card Fraud   Hsbc Derek Wylde
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Tackling Card Fraud Hsbc Derek Wylde

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Presentation from "The future of Cards and Payments 2008".

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Tackling Card Fraud Hsbc Derek Wylde

  1. 1. Tackling card fraud: embracing technological and strategic solutions Derek Wylde Head of Group Fraud Risk HSBC
  2. 2. UK Card Losses £m 600 500 400 300 200 100 0 2002 2003 2004 2005 2006 2007
  3. 3. UK CNP Losses 1995-2007 £m 300 250 200 £ Millions 290 150 213 100 183 150 122 110 96 50 0 73 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
  4. 4. Start with a laugh… • P.C. Vey, Published by the New Yorker, January 16th, 2006
  5. 5. Anti-fraud strategy • Render the card number useless if compromised • EMV for face to face • Remote card authentication (CAP) for CNP • DDA not SDA • Unique CVC value on chip
  6. 6. EMV - The silver bullet? • Fraud at its highest level in UK for years • Expensive • Is PIN the right CVM? • Effectiveness limited until total migration
  7. 7. 3D Secure - MasterCard SecureCode and Verified by Visa • Scheme-driven authentication technology, providing merchant liability protection from fraud • Merchants now get global protection • But merchant adoption slow • Cardholder registration even slower • Activation During Shopping add-on • Maestro mandate
  8. 8. Remote Card Authentication • Alleviates static data vulnerabilities • Limits opportunity for compromise and collusion • Multi-channel opportunities • Provides an enhancement to 3D Secure, possibly remove ADS • But… requires chip card technology
  9. 9. Giving the customer control • Allow the customer to parameterise his spend • Straight through processing • Prevents not just CNP fraud • For example block card for overseas ATM spend, CNP transactions or overseas POS
  10. 10. Fraud detection systems • Optimised • Up to date models • Models for high net worth customers • Up to date contact details • Work 24x7
  11. 11. Authorisation strategies • Analysis - there is no substitute • Get the priorities right • Exclude low value referrals • Restaurant referrals • ‘Sticky referrals’
  12. 12. And finally……... • Customer education • SMS • Contact centre • Customer complaint handling
  13. 13. Tackling card fraud: embracing technological and strategic solutions Derek Wylde Head of Group Fraud Risk HSBC

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