HSBC steps up fight against fraudsters

Banking giant HSBC is to extend its use of business intelligence software to reduce bad debt and fraud.

The bank is already close to completing the installation of detection systems in 25 countries to identify fraudulent payment card activity.

HSBC is now considering extending its use of the software into other parts of the business, including its credit management, anti-money laundering and online banking divisions.

George Lennox, senior manager of group credit at HSBC, says the software will be able to detect payment fraud six times faster than existing systems, by identifying unusual behaviour in customer spending habits when it goes live next year (Computing, 20 July).

But he also hopes to make an even bigger return on investment by using the SAS technology in other departments.

‘Bad credit debts are 70 times higher than transaction fraud,’ Lennox told delegates at the SAS Forum International in Geneva, last week. ‘And if you want to get the bad guys you need to act in a more sophisticated manner.’

HSBC is now investigating how the technology can be used to spot other forms of fraud, focused on overdrafts and loans.

‘It could spot odd behaviour. Someone might phone a call centre and ask to change their password; they might then change their address. The next week they might ask for a cheque book to be sent to the new location. In isolation each transaction looks innocent, but collectively they could spell fraud,’ said Lennox.

The bank is considering using the technology to identify fraudulent online activity, which could result from phishing scams and other forms of identity fraud. Improving risk levels by just one per cent could save HSBC $75m (£40m), he says.

What do you think? Email us at: feedback@computing.co.uk