Considering that credit card application fraud has grown 17 percent between 1993 and 1995 and that Visa and MasterCard charged off $790 million from fraudulent accounts in 1995, according to the American Bankers Association, banks need tools to plug the dam because in the two years since, financial institutions have not slowed down; on the contrary, they've gone after more and higher risk business. Going after this problem, San Diego-based HNC Software has expanded fraud detection ability into the front office with a lower cost, higher speed software system that can be programmed or modified by credit policy and marketing people as well as software programmers. Called Falcon Sentry, it runs with HNC's new Capstone management system, which can process 10,000 applications per hour. "Capstone is the first high-speed credit card applications software," says Larry Spelhaug, HNC's vp of financial systems, who emphasizes that Sentry can also plug into other application processing systems. Sentry combines information on a credit card application with data taken from social security files and any negative input from industry hot files. It uses neural nets to statistically combine data and "intelligent consistency checking" to instantly check application information such as zip codes and social security numbers. It also does verification management to quickly weed out inadvertent errors made by credit card applicants. First Union Corp. and First Data are among the major initial users of Capstone and Sentry. David Nole, First Union svp of credit policy says the system enables the bank to react quickly to marketing needs "without compromising the integrity of our credit policies." HNC's Krishna Gopinathan adds that it allows the bank to "very quickly change credit lines, interest rates and credit score cutoffs." -peterson tfn.com
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