Visa Revolutionizes Fraud Detection
Rising allegations of cyber espionage in China has put many U.S. companies on high alert. Visa has decided that it is time to take action, reinventing the fraud detection system for the entire organization. Visa’s Chief of Risk officer Ellen Richey says “We are confronting a criminal population that continues to improve its sophistication and its attack vectors, so we can’t stand still.” The company has surely proven that.
Visa has been ahead of the game with technology for decades now. Since the company moved to online authorizations 20 years ago, fraud has declined by nearly two thirds. Advanced, password-protected authorizations in 2005 furthered the company’s quest for fraud-free charges, but six cents of every $100 is still believed to be fraudulent.
Past analytical programs only assessed 2% of Visa’s transactions. The new system seeks to monitor all of them at once. It will analyze as many as 500 aspects of a single transaction at any time, assessing average ticket sizes, authorization volumes, purchase frequency, and more to determine the validity of a charge. Visa has had to significantly increase its database technology to keep up with the larger data sets now in play.
In addition to this, Visa is working with Big Data to create a stronger authentication procedure for Visa cardholders. Rather than having to answer multiple questions for identity proof, people will simply charge their cards as normal and the system will do the rest. It will analyze the context of a transaction to determine if the cardholder is in fact the original user.
All of this technology has cost the company a great deal of money, but Visa estimates that it has already discovered more than $2 billion in potential fraud. The company has already set forth to correct all detected vulnerabilities and create methods of avoiding them in the future. As other companies seek to implement similar changes in their fraud detection, consumers can become more confident about their long-term spending and safety.