Thai bank safeguards customers while managing fraud detection in real time

Krungsri Consumer uses SAS^® Fraud Management to find fraud faster and reduce revenue losses

Fraud is on the rise in Thailand. Credit card fraud in the Asia Pacific region is growing by 20% annually, costing businesses around US$400 million a year.

Advanced fraud detection and prevention technology is proving to be a difference maker for Thai businesses. Those with it are in a strong position to defend themselves against evolving fraud threats. Those without it – more than half of Thai businesses – find themselves in danger of significant losses and unhappy customers.

Krungsri Consumer, a subsidiary of Bank of Ayudhya – Thailand’s fifth-largest bank, has become the leading consumer finance business in Thailand. With $71 billion in assets, Bank of Ayudhya provides banking, consumer finance, investment, asset management and other financial products and services to individual customers and large corporations.

Like every bank around the world, Krungsri Consumer is vulnerable to fraud. Its antifraud team previously relied on a 15-year-old fraud detection system to monitor credit card purchases, sale finance and personal loan transactions. But the industry has changed significantly in the last 15 years. Banking has gone digital, and fraudsters have too – growing more inventive and tech-savvy in how they steal from banks.

Krungsri Consumer realized that to sustainably grow its consumer banking division, it needed a more robust fraud monitoring system to mitigate fraud and reduce losses.

Internal assessment spurs action

Pramote Lalitkitti is Senior Vice President of Fraud Management at Krungsri Consumer. With 25 years of fraud management experience, the banking veteran knew a change was needed.

“Our scoring model was quite obsolete and unable to detect fraud timely and effectively,” Lalitkitti says. “It just couldn’t cope with emerging fraud trends, especially in the digital space.”

The previous system was also limited in scope. Because it could only interface with the bank’s authorization system, Krungsri Consumer could only monitor 25% of real-time transactions. This left the majority of non-monetary transactions like address changes and credit card replacements to go through unchecked.

This lack of a comprehensive real-time monitoring solution was worrisome given the sharp rise in card-not-present (CNP) transactions, like the kind placed online.

“CNP transactions represent 92% of our total fraud volume and are mainly driven from outside countries,” Lalitkitti explains. “We’ve also seen a significant increase in domestic CNP fraud, particularly from secured merchants.”

Business rule writing and maintenance was cumbersome. Whenever Lalitkitti wanted to implement a new business rule, IT needed to put the rule into production, which was a slow and complex process. Moreover, from a customer service perspective, the outdated fraud detection engine was producing too many false positives – a costly mistake in the age of customer experience.

Lalitkitti knew that it was time to invest in a modern, reliable fraud detection solution to safeguard customers and respond faster to new threats as they arise.

Better fraud detection

Krungsri Consumer replaced its incumbent system with SAS Fraud Management, which uses analytics and machine learning to monitor credit card transactions for suspicious behavior in real time. The bank quickly noticed a difference. “SAS helped us reduce case alert volume by 40%, improve our fraud detection rate by 35% and reduce false positives by 18%,” Lalitkitti says.

Better technology integration was a big part of this success. With SAS, Krungsri Consumer could integrate its banking systems – including its upward and downward bank systems and mobile applications – to support predictive models and strengthen its fraud detection capability. Now, whenever an email address or phone number is changed and followed by a high-risk transaction, for example, the case is triggered for review or even declined if the transaction amount exceeds a certain threshold. This wasn’t possible before.

Once suspicious activity is identified, investigators can more efficiently investigate cases because fewer applications are needed. “Senior management is happy because we’ve reduced the time needed for each case and improved the productivity of our fraud monitoring team,” Lalitkitti notes.

Lalitkitti and his team of 44 fraud combatants appreciate the solution’s ease of use. “Rule writing in SAS is more flexible than the previous environment and can be launched in production in one click without IT support – another time saver,” he says.

Overall, the upgrade has been a sound business decision, according to Lalitkitti.

“Replacing our old fraud monitoring system with SAS Fraud Management was quite smooth. With fewer false positives and the predictive scoring model of SAS, we can provide a better customer experience while detecting more fraud.”

A competitive advantage

Krungsri Consumer cardholders are also beneficiaries of the new technology. Because the SAS scoring model is much more predictive and reliable than the old system, Krungsri Consumer is more confident to approve transactions it may have previously declined, leading to a better customer experience.

Plus, by integrating its banking systems, Krungsri Consumer can now reach more customers via email and text to verify suspicious transactions. “Our cardholder contact rate has improved by more than 50% compared to the old system,” Lalitkitti says.

The senior vice president notes that in a competitive market, SAS has given the bank a competitive advantage. Cardholders feel safe knowing Krungsri Consumer has a robust fraud monitoring solution and will quickly notify them of fraudulent activity.

“SAS definitely gives us an edge,” Lalitkitti concludes. “Providing a better customer experience and faster fraud detection can bring our credit cards to the top of customer wallets.”