An AI-Driven Risk Scoring Solution to Mitigate Fraud

Fraudsters are using increasingly sophisticated ways to scam consumers out of hard-earned money. The LexisNexis 2021 True Cost of Fraud Study found that every $1.00 in fraud costs U.S. financial services organizations $4.00.

According to the study, many fraud schemes are becoming harder to detect with current fraud and risk mitigation processes, so it’s critical for financial institutions to prepare for all types of fraud, including credit card fraud — particularly card not present (CNP) fraud. Credit card fraud is by far the most common type of identity theft, occurring in 41.8% of all identity theft reports. 

Since 2020, digital and mobile financial services have become more available, making transactions more convenient for members — and more attractive to fraudsters. It’s almost certain that consumers will continue using digital payment methods long after the pandemic ends, which means it’s critical for credit unions to continually monitor mobile and digital channel security to limit fraud risk.

Built exclusively on credit union data, Strategic Link partner Co-op Solutions (formerly CO-OP Financial Services) provides a solution to optimize credit unions’ security and safeguard members’ accounts and personal data: COOPER Fraud Score.

As the industry’s only AI-driven risk scoring model, COOPER Fraud Score helps credit unions adapt more quickly to fraud trends to support the bottom line through a reduction in fraud chargebacks, false-positive ratios, and fraud losses. It uses advanced machine learning algorithms, helping credit unions detect and stop fraud before members experience its impact.

Here’s how it works:

  1. Fraud rules are established by leveraging COOPER Fraud Score (with or without additional data points).
  2. Credit and debit transactions are scored in real-time in the authorization stream.
  3. Suspicious transactions that meet fraud rules are declined with a reason code provided.

The COOPER Fraud Score is part of the CO-OP Protection Solution line, which provides everything credit unions need to prevent, mitigate, identify, assess, monitor, report, and resolve credit and debit fraudulent account and cardholder activity.

Want to learn more? For more information about Co-op Solutions, visit its partner page online or contact the Strategic Link team to get connected.

Posted in Business Solutions, Strategic Link.