India's largest platform for AI & Analytics leaders, professionals & aspirants

Sign in

India's largest platform for AI & Analytics leaders, professionals & aspirants

3AI Digital Library

Merchant Fraud Risk Score Development

August 17, 2020

A leading payment processor

Problem Statement

  • Modify existing fraud rules in the system to improve the performance
  • Reduce false positives (Detection Noises) in merchant fraud detection model without compromising on adverse action rate

Analytics Led Approach

  • Developed a score to identify potentially fraud merchants from the rule-based detections
  • Identify a cut off for direct adverse action and another for risk based due diligence
  • Implemented the scoring model and score-based rules in the rules engine, Blaze Advisor

Business Impact

  • 15% reduction in review cost due to false positive reduction
  • Another 5% review cost savings for direct adverse action recommendations
  • A web-based monitoring system developed to track benefits of the strategy through monthly reports

Critical Success Factors

  • Knowledge of fraud rules
  • Expertise in various analytics techniques like decision tree, logistic regression etc
  • Ability to identify fraudulent patterns based on historical data analysis
  • Continuous monitoring and refinements of fraud rules for improved fraud detection over time

    3AI Trending Articles

  • Using AI to Outwit Malicious AI

    Robust Intelligence is among a crop of companies that offer to protect clients from efforts at deception. IN SEPTEMBER 2019, the National Institute of Standards and Technology issued its first-ever warning for an attack on a commercial artificial intelligence algorithm. Security researchers had devised a way to attack a Proofpoint product that uses machine learning to identify spam emails. The system produced email headers […]

  • A peek into how AI will dominate functioning of Next Gen GBS

    Author: Saswata Kar, Head – Analytics & Data Sciences, Philips GBS | LinkedIn – Global Business Services or GBS is the collective name given to centralized hubs where big corporations have moved processes that can benefit from centralization, standardization, and automation. The location for these centers is largely governed by cost considerations and talent […]

  • India’s answer to Dropbox and Google Drive: NITI Aayog’s DigiBoxx

    Homegrown data storage and management platform DigiBoxx has been launched by NITI Aayog and it will provide affordable services to both regular users as well as businesses. India now has its own cloud storage platform, DigiBoxx. A potential alternative to Google Drive, Dropbox, and Microsoft OneDrive, the indigenous cloud service is seen as a step that furthers the initiative […]

  • Lessons in Failing to Apply Blockchain to combat C19

    This year 2020 has seen quite a variety of exciting developments in the blockchain space. To name just a few: the emergence of decentralized finance (DeFi) and non-fungible tokens (NFTs) as major economic forces and sources of crypto network user tractions, the maturation of layer 2 Ethereum solutions and the rollout of a variety of […]