CO-OP Financial Services Brings Artificial Intelligence to Fight Credit Union Fraud

CO-OP Financial Services, in collaboration with Feedzai, is working to implement artificial intelligence to fight fraud, and plans to put solutions into credit unions’ hands in 2017.

CO-OP Financial Services and Feedzai are working to implement artificial intelligence that will help credit unions fight fraud.

“A key pain point for credit unions in 2017 is that fraud mitigation tools have not kept pace with the relentless advance of fraud,” said Todd Clark, President/CEO of CO-OP. “CO-OP Financial Services has an equally relentless commitment to credit union and cardholder security. We are investing $20 million this year on new innovations to ensure credit unions have access to the very best technology in the payments industry. Implementing machine learning capabilities is a key initiative in delivery on that promise.”

Clark noted the agile machine learning platform will be available exclusively to CO-OP client credit unions, and will work in real-time, incorporate advanced analytics, and provide alert and case management capabilities for fraud and risk services.

Feedzai of San Mateo, California, specializes in artificial intelligence for payments applications. The partnership with CO-OP Financial Services will develop solutions to address fraud at any transaction volume.

For card payments, machine learning will augment the existing neural network-based Falcon Fraud Manager fraud detection system used by the CO-OP Card Member Security Team. Feeding on historical and current data, the platform will utilize a strengthened transaction scoring model to better predict debit and credit card fraud, reducing credit unions’ losses while keeping false alarms to a minimum. In addition, machine learning will be deployed as the primary fraud management tool for CO-OP Shared Branching. 

 The platform will be able to take in any amount of relevant, multi-source data to define transaction risk scoring, incorporating events such as cardholder PIN changes and the purchasing patterns of individual members to better predict expected behavior. Based on constant learning and scoring updated in real-time, suspect transactions detected by machine learning can be declined on the spot or kicked out immediately to fraud team members for analysis. 

 The CO-OP-Feedzai partnership is structured for the co-development of a series of fraud-fighting, machine learning advances beyond the risk management tool to be utilized by CO-OP later this year. It is also part of a three-pronged security strategy that includes fraud consulting and tools such as CardNav by CO-OP, a card controls and alerts application that helps empower members in their own defense against fraud. 

 “Artificial intelligence has previously been thought of as technology only available to governmental organizations or the largest of corporations,” said Nuno Sebastiao, CEO of Feedzai. “Feedzai is pioneering ‘attainable AI’ – AI that will really work, right now for any sized company. There is perfect synergy between ourselves and CO-OP, and we are very excited to be working with them to bring machine learning to the aid of credit unions.”

For more information, visit www.co-opfs.org.

 

Posted in Business Solutions.