As fraud attempts continue to gain sophistication, banks of all sizes must strengthen efforts to detect and prevent fraudulent activity. A midwestern top 100 regional bank utilized ARGO’s fraud solution, OASIS™ (Optimized Assessment of Suspicious Items), designed to provide cross-channel, multi-fund analytics and adjudication workflow to detect fraudulent transactions and suspicious items, to help reduce fraudulent activity within their organization.
Before implementing OASIS, the bank used a combination of internal controls and prior generation fraud software to identify and stop fraud attempts. Because this process generated a large number of false positives, they spent a great deal of time reviewing non-fraud transactions that were flagged as suspect.
The bank installed OASIS to perform both transaction and image analysis. Detection accuracy improved based on decisioning inputs and scoring made by machine-learning models that are trained using transaction feature extraction.
Data used for transaction analysis included on-us check data with the standard MICR data for each item. Image analysis results were based on use of check stock and signature verification. The data used contained 36 fraudulent items for a total of $1.44MM. The ARGO models analyzed item amounts greater than $500.
- Historical data from January through June provided pattern detection model and outlier recognition training.
- Data from July 1 through August 15 was used to analyze fraud detection results.
OASIS achieved a 96 percent detection rate using a combination of transaction (metadata) analysis and image analysis. As a result of image analysis, 67 percent of the fraudulent items failed check stock and signature verification.
The average daily false positive rate declined dramatically from 1,250 with the legacy system to only 250 with OASIS, reducing analyst review labor cost by 80 percent. OASIS helped this regional bank greatly reduce false negatives, financial losses, operating expenses, and reputational risk.
For more information, download the “Industry Proven Results” interview with David Engebos, President and COO of ARGO.
