Middlesex, UK (PRWEB UK) 24 January 2013
UK lender Zebit, a financial services technology startup that also offers a Big Data underwriting platform for the underbanked, announced today that it has launched a new fraud detection model reducing fraud by 90%. Nicknamed “Vulcan” for the mind-melding Mr. Spock of the Star Trek series, the model employs Adaptive Data Fusion technology that learns and adapts to fraudster tactics, “getting into the minds” of fraudsters to proactively respond to attacks before the fraud is committed.
Zebit employs Vulcan on its online direct lending business, Zebit.com. Identity fraud can be an issue in online lending, with fraudsters attempting to secure cash using stolen identities, and Zebit’s debut of Vulcan on its lending site is a major stride in protecting against that threat.
Designed by the data scientists and fraud experts who built the fraud detection system protecting over 2 billion credit cards worldwide, the system is the most sophisticated of its kind. With advanced behaviour monitoring, Vulcan employs technology typically used in scientific and military applications to take large, complex streams of data from multiple sources to form inferences that are superior to using the data streams individually.
“Our goal has always been to apply advanced analytics in ways that enhance the customer experience and ultimately, people’s lives,” said CEO Michael Thiemann. “By significantly reducing fraud, we can help lower interest rates, reducing the cost of borrowing for a population for which cost savings makes a particularly big impact. Partners on our platform will enjoy a dramatic reduction in fraud losses.”
Globally recognised fraud expert Ted Crooks of Crooks Analytics predicts that global Internet fraud levels will accelerate this year when Chip and PIN technology is introduced on payment cards on a widespread basis in the USA, and that transactions involving cash transfers are at particular risk. Cash transfers are an integral part of any business involving lending, ranging from retailers offering financing to direct lenders.
As the last major market using payment cards without widespread protection from an embedded computer chip and PIN requirement at point of sale, the US is due for a payment card upgrade. Beginning in 2013, the major credit cards plan to make these new smartcards standard throughout the US. Though the new technology reduces fraud in face-to-face transactions, it encourages a rise in online fraud.
“The UK saw huge spikes in Internet fraud when they transitioned to Chip and PIN between 2006 and 2008, with overall losses from Internet fraud exceeding the savings from reduced instances of face-to-face fraud for several years,” said Crooks. “We expect to see the same in the US.”
“Higher quality underwriting and fraud protection allows us to give more customers who really need it access to capital,” said Michael Thiemann. “When lenders can offer customers fair rates and make the right lending decisions without the wildcard of fraud, everyone wins.”
Zebit (http://www.zebit.com) is a short-term lender that offers loans of up to £800 with flexible repayment options, allowing customers flexibility in choosing how they'd like to borrow and repay. Zebit also offers a Big Data underwriting platform for companies wishing to offer financing to customers.
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