See how HSBC uses SAS for Fraud Prevention as a part of their Enterprise Risk Management Strategy

1. Fraud prevention as part of an Enterprise Risk
Management Strategy
Derek Wylde
Head of Group Fraud Risk
HSBC

2. A word on HSBC
Customers Total Assets Profit Before tax
(end 2008) 2008
100m US$2,527bn US$9.3bn
International Offices Employees
Network Worldwide
86 countries and 10,000 320,000
territories

3. Fraud trends
• Card fraud continues to rise despite chip
• Serious information risk issues and events
• On-line fraud threat ever present and rising
• Internal fraud rising
• First party fraud rising
• Organised crime heavily involved

4. Global Credit Card Fraud Trends $m
3000
2500
2000
1500
1000
500
0
2002 2003 2004 2005 2006 2007 2008

5. Global fraud as percentage of sales
12
10
8
bps 6
4
2
0
2002 2003 2004 2005 2006 2007 2008

6. Global Plastic Card Fraud Losses
2003 2008
L&S
4% 6% 3%
3%4%
4% Counterfeit
23% 33%
CNP
21%
Apps
33%
NRI
30%
ATO 36%

7. Global CNP Fraud Losses 2002-2008
900
800
700
600
$ Millions
500
823
400
637
300
200
100
0
2002 2003 2004 2005 2006 2007 2008

10. Phishers are still in business
Unique phishing sites detected - 2008
(Source: Anti-Phishing Working Group)
40,000
36002
35,000
30,000 27209 27739
26303
24908
25,000
21507
20305 20410 20317
19480
20,000 18509
15709
15,000
10,000
5,000
0
Nov
Jan
Jun
Jul
Mar
Apr
Feb
Aug
Sep
Oct
May
Dec

11. Start with a laugh…
• P.C. Vey, Published by the New Yorker, January 16th, 2006

12. Anti-fraud strategy
• Fraud prevention controls
• EMV (chip) for face to face card transactions
• Remote card authentication (CAP) for CNP
• Strong customer authentication – dynamic password
• State of the art anti-fraud technology
• Advanced analytics
• Data sharing

13. Anti-fraud technology
• Application screening
• Transaction monitoring
• Internal staff activity monitoring
• Layered security framework
• Advanced analytics
• Data sharing

14. SAS Fraud Management
• HSBC required a fraud detection for the 21st century
100% real time
Advanced multiple models
Unlimited rules
Champion challenger functionality
User friendly case management
Ease of deployment
IT efficient
Global deal
Global support
Vendor partnership
Support for enterprise fraud management

15. HSBC Progress
• First implementation in US – June 2007
• Strict performance criteria set and met
• Now live in 12 businesses in 9 countries
• SAS FM protects 80% HSBC issued cards
• Plan for a further 26 deployments covering
16 businesses in 15 countries

16. The Enterprise Vision
FM 1 FM 2 FM 3 FM 4
Raptor 1 (fraud detection for credit and debit cards)
Raptor 2 (fraud detection for all personal products)
Leverage (for credit risk)
Leverage (for marketing)

17. SAS Fraud Management will be at the heart of
Fraud decisioning
• Application scores from screening solutions
• On-line authentication results
• 100% real time transaction scores
• First party fraud scores
• Internal staff fraud monitoring

18. SAS as a partner…
• Committed
• Responsive
• Innovative
• Flexible
• Nice people to do business with

19. Fraud prevention as part of an Enterprise
Risk Management Strategy
Derek Wylde
Head of Group Fraud Risk
HSBC