VIENNA, Va. -
The communications technologies are part of the $30-billion CU's array of defenses against card fraud, which also include alerts to changes in personal credit reports; heightened security for online shopping; fraud education on the website; and neural networking.
"We're doing everything we can do on multiple channels to reduce fraud and protect the member," explained Thomas Greek, assistant vice president, credit cards, at Navy FCU.
"Overall, fraud is going down because we're able to detect it and stop transactions before they are approved," said Tishona Phillips, manager, card fraud prevention at the CU.
Along with member education and staff training, technology has helped Navy Federal reduce fraud loss to a rate "below" the industry average, Greek said.
Thus, the CU is one of the nation's "dream" card issuers, according to a recent report by San Francisco-based Javelin Strategy and Research.
And in a recent Consumer Reports survey, Navy FCU earned the consumer vote as the nation's second-best credit card issuer, behind USAA Federal Savings Bank, because of fraud prevention, detection and resolution features.
Phone alerts to members are triggered by the CU's neural networks, which automatically identify anomalous purchasing behavior. Calls regarding particularly high-risk transactions are placed by one of Navy FCU's 27 specialists, whereas the lower-risk transactions are fed into an automated calling solution.
The CU is working on alerting members by e-mail or by sending text messages to their mobile phones, continued Greek.
"These days, members are much more in tune with e-mail and text messaging," he said. "We have the infrastructure set for e-mail, but not yet for texting. And we'll need to explore both options in a member-friendly way."
Each fraud-prevention system delivers a daily or monthly report, with details such as the number of transactions that were confirmed as fraud, or how a member interacted with the automated phone alert.
Greek acknowledged that Navy FCU's sophisticated fraud tools may be out-of-reach for most CUs. "Many credit unions don't have the economies of scale to afford these technologies," said Greek.
However, all CUs could make better use of the tech they do have, he said.
"There's a lot a credit union can do with education using electronic messaging, such as the website or e-mail, that's low-cost," he said.
CUs that have tightened their belts should also reexamine a common vulnerability: data stored with third-parties, suggested Phillips.
"Make sure that your vendors are securing member info following the same guidelines that you would follow," she said. "We found some vendors that weren't compliant with our practices."
On the premise that fraud is a slippery slope, Navy FCU said it has to work closely with the neural network providers and card organizations to keep up with the threat.
"One of the things we've gotten better at is leveraging our partnerships," Greek said. The partners help track suspicious transactions in real-time, such as a current slew of fraud originating from the United Kingdom, so that Navy FCU can continuously adjust its risk scoring in the neural networks.
"Fraud happens so quickly that if you adjust your strategies weekly, it's too late," he said. "Daily isn't even fast enough."
Added Phillips: "What we're trying to do is stop fraud at the test authorization, or the first or second transaction, instead of the third or fourth transaction."
Navy FCU uses the Fair Isaac Falcon Fraud Manager and the TSYS CardGuard for neural networking; the Equifax Credit Watch solution for credit report alerts; and the Varolii automated customer service platform for phone calls. The CU also participates in the MasterCard SecureCode and Verified by Visa programs for secure online shopping.
more
Read more about CUs using biometrics at cujournal.com and search the following bolded terms in the archive:
* Tracking The Dark Side Of Web
* Afraid, But Not Too Afraid
* How 1 CU Is Examining Risk Across The Enterprise
For info on this story:
* www.navyfcu.org
* www.fairisaac.com
* www.tsys.com
* www.equifax.com
* www.varolii.com
* www.mastercard.com
* www.visa.com
