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Tackling Card Fraud Hsbc Derek Wylde

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

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

Published in: Economy & Finance

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  • 1. Tackling card fraud: embracing technological and strategic solutions Derek Wylde Head of Group Fraud Risk HSBC
  • 2. UK Card Losses £m 600 500 400 300 200 100 0 2002 2003 2004 2005 2006 2007
  • 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. Start with a laugh… • P.C. Vey, Published by the New Yorker, January 16th, 2006
  • 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. 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. 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. 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. 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. Fraud detection systems • Optimised • Up to date models • Models for high net worth customers • Up to date contact details • Work 24x7
  • 11. Authorisation strategies • Analysis - there is no substitute • Get the priorities right • Exclude low value referrals • Restaurant referrals • ‘Sticky referrals’
  • 12. And finally……... • Customer education • SMS • Contact centre • Customer complaint handling
  • 13. Tackling card fraud: embracing technological and strategic solutions Derek Wylde Head of Group Fraud Risk HSBC