Innovative use of Image Analyzers with Multi-Source Correlation Modeling™ Brings New
Paradigm in Fraud D...
•	 Compares payee on the check
against global or account level payees

Sereno Recognition Techniques

CAR/LAR Comparison

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  1. 1. Orbograph Sereno™ Innovative use of Image Analyzers with Multi-Source Correlation Modeling™ Brings New Paradigm in Fraud Detection Fraud Increases While Volumes Decline As check transaction volumes decline one might expect check fraud to follow the same trend. Unfortunately, both fraud attempts and losses continue to increase. According to the 2009 ABA Deposit Account Fraud Survey Report, in 2008, check fraud losses were estimated at $1.024 billion, an increase from $969 million in 2006. Additionally, the number of fraud cases increased from 561,306 to 760,955. Market Overview Large financial institutions deal with multichannel fraud activities every day. Although it may appear fraud prevention is improving year to year, fraud attempts are increasing. Today’s fraud systems leave millions of dollars in losses on the table with high costs to manage false positives. Community banks and credit unions are faced with a slightly different challenge as losses are modest, but the potential risk is now greater as payment channels overlap and criminals move downstream to smaller institutions. They need cost effective solutions that are preventative in nature, integrate easily in conjunction with existing image systems and automate high dollar review - all with a customer centric approach! New Implementation for Fraud Detection In an effort to consolidate platforms and improve efficiency, Sereno with Multi-Source Correlation Modeling™ is the industry’s only fraud solution that tightly integrates image analyzers with MICR/index data to provide the lowest false positives and the highest fraud detection rates in the industry. Sereno can also run concurrently with check processing automation (Automation Services), Amount Verification (AV) and image quality testing (IQUA). Sereno complements today’s image workflows and transactional fraud systems with: • Day0/Real-time detection during teller capture/ATM/RDC • Day1/Concurrent detection during centralized and branch capture • Day2/Next morning processing for all on-us check transactions Standalone Processing For financial institutions that prefer to run stand alone, our “Silent Agent” ingests X9.37 files or TIFF images from any directory throughout Day1 or after image capture. After Sereno analyzes the images, a small queue of suspects are available for payment approval - A new paradigm with simple implementation! Technologies to Reduce False Positives Running on G6 Enterprise Recognition Technology, a Services Oriented Architecture (SOA) platform, Sereno uses image analysis capabilities from multiple recognition engines to auto-clear good items and focus in on a very small population of suspects. Specially developed algorithms handle even problematic images with precision: image quality defects, IRDs, stripped items, and pre-authorized drafts. Multi-Source Correlation Modeling™ identifies on-us check fraud by utilizing multiple technologies. Check Stock Validation Compares field coordinates/layout with previously cleared checks for counterfeit detection to identify fraudulent items missed by today’s filters: • Reduces false positives from amount/serial out of range • Identifies IRD’s and pre-authorized drafts (remotely created checks) to reduce false positives and empower analysts • Identifies stripped items and travelers checks with dual MICR image Automated Signature Verification Compares image signature on check against signatures of previously cleared check(s) (signature card optional): • Covers skilled and unskilled forgeries • Validates amount and serial out of range transactional data suspects • Signature quality detection Manages small and large signer lists for personal and business checks. Pre-Authorized Draft • Protects Bank of First Deposit • Can clear pre-authorized drafts if flagged “Sereno is on the forefront of architecture, performance, and functionality for image-based fraud”
  2. 2. • Compares payee on the check against global or account level payees Sereno Recognition Techniques CAR/LAR Comparison • Targets amount alterations and protects deposits by intelligently comparing the CAR and LAR amounts • Identifies fraudulent items not caught with transactional data CAR Style Validation Ensures CAR topology consistency • Utilizes digit modeling with cent pattern analysis as well as special sign identification • 2nd source verification to improve accuracy on borderline suspects Payee/Payer Recognition • Match against good/bad payee lists (global and account level) • Payee Name Verification (PNV) for positive pay available (optional) • Applicable on select transit items • Can support kiting suspects if payee/payer are matching Application Logic • Provides infrastructure for single bank, multi-bank or service bureau • Account level optimization, profiling and billing • Accuracy improves as fraudulent images are confirmed in system • Identifies duplicate checks from multiple workflows System Implementation Sereno’s automated training methodology continually builds profiles and learns behavior over time. When running standalone or with Automation Services, Sereno ingests image transactions on a daily basis, dynamically building a check stock and signature database. The system can also be staged remotely by processing transactions prior to installing on-site. Tangible Savings • Eliminate high dollar manual review (est. 5¢/image) • Reduce losses dramatically • Can be used on internal bank accounts and transit items • Maximize $ range coverage of fraud detection to match staffing targets • Reduce overall hardware requirements due to single platform • SaaS pricing model available Intangible Benefits • Address comprehensive risk management requirements • Leverage across multiple workflows: RDC, ATM, POD, inclearing & RPS • Integrates with 3rd party rules engines • Minimizes system administration • Can be applied to transit items as part of checking account acquisition strategy About Orbograph System Operation The Sereno Fraud Console offers an innovative approach to handing suspects. Suspects are approved with auto-clear logic or manual review. Fraud analysts can also access the Sereno Decision Support module to streamline the decision making process. All decisions are logged for reporting queries. Orbograph, a subsidiary of Orbotech, is a premier provider of recognition services and software for check processing in the financial industry and end-to-end electronic solutions in healthcare revenue cycle management (RCM). Orbograph technologies are in use in over 1,500 financial institutions, service bureaus and billers processing billions of checks and claims annually. Orbograph solutions are utilized by 20 of the top 30 U.S. financial institutions with in-house check processing. In healthcare payments, Orbograph P2Post and Orbograph E2Post utilize innovative EOB conversion technologies to automate posting of receivables into practice management systems. Orbograph enables clients to envision more for their organization by reducing costs and managing risk while ensuring that achieving more is a reality. 44 Manning Road, Billerica, MA 01821 • (978) 667-6037 • www.orbograph.com