case studies
Jaywing Foil Apply models reduce the cost of application fraud for Alliance and Leicester
Uncovering fraud is a major overhead for the finance industry - and the latest industry figures show that identity fraud is still on the up. Chip and PIN technology will reduce stolen and counterfeit plastic card fraud but this will present a different challenge to the industry. Identity fraud will increase even further as perpetrators shift the focus of their operations.
foil apply
Foil Apply is Jaywing's family of application fraud prevention products and services, including 'off the shelf' and tailored models alongside expert advice. Our unique fraud syndicate involves members pooling data from which we develop highly predictive and robust models that are easy to implement within existing processes. And because we are custodians of the data, no-one needs to worry about revealing anything to their competitors.
Alliance & Leicester's current account is one of the UK's market leaders, with 183,000 new accounts opened in 2003, and 120,000 in the first six months of 2004 - 40 per cent up on the first six months of 2003.
Alliance & Leicester is also one of the founding members of the Jaywing syndicate and the team have been really impressed by the results the model has delivered for their current account portfolio.
"We are strong advocates of fraud scoring and the value of pooling data cannot be underestimated. The breadth of data has resulted in highly predictive, robust models. This is an exciting initiative and has become a fundamental part of our fraud detection strategy." Geoff Lloyd, Head of Fraud and Corporate Security.
step change needed
Before joining the syndicate, Alliance & Leicester were already successfully detecting application fraud with sophisticated tools, including in-house developed models and scorecards, and a centralised fraud team. But they had reached a plateau with their existing toolkit and needed a step change in approach to further improve results.
In addition, the move away from traditional channels toward a more direct, self-service environment significantly increased Internet applications and with them the associated fraud risks.
Already supporters of a fraud scoring approach, the Alliance & Leicester team understood the benefits of pooling data through Jaywing's fraud syndicate and were keen to join. Key to their decision to do so was the:
- breadth of data available and the ability to identify fraud previously undetected by their own processes
- ability to share data and learning with lenders with more Internet experience
- access to Jaywing's analytical approach - a different way of doing things
- ability to proactively monitor fraud trends and compare their own experience to the collective experience of the syndicate
making the most of the tools available
We delivered the model, which was developed using the pooled data, and was tailored to the data Alliance & Leicester had available for implementation.
Alliance & Leicester implemented the Jaywing model alongside its in-house scorecard for all current account applications. In particular, the fraud team recognised that false positive rates can be reduced by optimising referrals where both the models predict a high risk of fraud.
On top of that, each model identifies fraud cases in addition to the other, allowing Alliance & Leicester to detect more fraud than was possible with their internal tools alone. The implementation of the Jaywing model gave an impressive 12% uplift in fraud detected.
finding more fraud with the same resource
As a result of implementing the Jaywing and in-house models in combination, the team surpassed its internal target of a further 50% reduction in fraud hits. Even better was that they achieved this without the need for additional resource. Through improved prioritisation, the fraud team were more efficient and could identify more fraud within a finite timeframe; minimising the potential fraud losses while continuing to deliver excellent customer service to genuine applicants.
Through the Jaywing monitoring service, Alliance & Leicester has a better understanding of their fraud profile and the team have identified additional data characteristics to further enhance their models.
the Jaywing way
"The Jaywing team has a flexible approach to implementing a practical solution which combined with their knowledge and experience is like having a great new member of your own risk team", Derek Spence, Risk Manager.
Alliance & Leicester are also looking to work with Jaywing on other fraud prevention products.
