Payments & Transactions

Payments provider SIBS and IBM announce a cognitive solution to combat fraud

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The changes we see in the global payments landscape, driven by innovative technologies, are fundamentally changing the industry, but they come with a brand new set of challenges. Over the past decade, sophisticated fraudsters have learned to rapidly scale up their attacks, making them more skilled at exploiting payment systems. The same technology that has helped change the world of payments has also fueled fraud complexity, requiring an increasingly sophisticated anti-fraud response – payments fraud has become a €20Bn ($23Bn) worldwide problem for financial institutions while the fraud detection and prevention market will be worth €28.49Bn ($33.19Bn) by 2021[1].

The challenges and opportunities in anti-fraud detection and prevention services are growing exponentially in new areas such as instant payments and open banking APIs. Additionally, the digital footprint of financial services customers has steadily increased with their hybrid patterns of use among various channels – credit card, internet and mobile phone. On the other hand, technology capabilities are supporting increasingly complex, sophisticated and global fraud and cybercrime patterns. Finally, the impact of regulation is creating new challenges to all type of players, like financial institutions, merchants, public entities and payment services providers.

With these new challenges in mind, SIBS has decided to reinforce its commitment to fraud detection by infusing into PAYWATCH, its anti-fraud and security services, advanced IBM analytical and artificial intelligence capabilities. SIBS and IBM join forces in an FPaaS (Fraud Prevention as a Service) model, to respond to these new opportunities and strengthen PAYWATCH presence in new markets and segments. SIBS is a leading electronic payments provider in Europe and Africa that provides payment services to more than 300 million users in more than 12 markets, accounting annually for 3 billion financial transactions worth over €4.5 bn ($5.3Bn).

SIBS PAYWATCH fraud prevention is a service for tracking, preventing, detecting, intercepting and investigating fraud in payments or in any other processing transaction, provided as an innovative service to various players at global level, whether they be banks, card issuers, merchant acquirers, ATMs, TPPs, or gateways.

With IBM and SIBS’ strategic partnership, the main goal is to provide improved transaction integrity for all settled payments, prevent sophisticated fraudulent activities, and quickly detect fraudulent events. In doing so, IBM and SIBS will work together to combat the mounting fraud losses for clients and ensure trust among those looking to settle their payments.

To do this, SIBS will utilize IBM’s Counter Fraud Management for Safer Payments, integrated in industry platform for Watson financial services solutions, already used by some of the largest and complex payments portfolios in the world, with unique cognitive capabilities, machine learning algorithms, and scalability for superior fraud losses detection accuracy, greatly reducing false alarms and operating costs. IBM Counter Fraud Management for Safer Payments can help clients save up to €60 million a year, and have demonstrated that it can run high availability (99.999% uptime) with thousands of transactions per second peak.

By monitoring real time multiple online payment channels and multiple players, SIBS will further improve on its strong track record, it already ensures levels of fraud in Portugal that are four times lower that European average, and deliver major savings by better identifying and shortening the cycles of detecting fraud patterns, reducing the time and effort to update existing models or deploy new ones and allowing for faster and more effective forms of responses, strengthening the customer experience and confidence.

SIBS and IBM are also now working together to develop a new end-to-end Watson cognitive-based solution, combining SIBS deep knowledge in the investigation, systems operation and procedures for fraud detection, interception and prevention with advanced IBM’s technology.

“We are confident that this partnership, bringing together two leading companies such as SIBS and IBM, will result in an excellent service delivery that will help reducing customer payment fraud levels”, said Madalena Cascais Tomé, SIBS CEO, adding that “with this one-stop-shop service there will be a range of players in the domestic and international market protected with the most advanced cognitive solution and the most qualified anti-fraud teams, enabling even more secure payments”.

“This announcement represents another milestone in the strategic alliance we have been developing with SIBS. Launching an innovative solution for cognitive fraud, in Portugal and World Wide, that combines SIBS’ recognized domain knowledge and experience with ‘IBM Industry Platform for Watson Financial Services Solutions’”, said António Raposo de Lima, GM IBM Portugal. “It is with great satisfaction that we can contribute to SIBS cognitive journey launching another initiative that leverages the international recognition of a Portuguese company.”

See also:

Instant payments more mainstream than ever, but at what cost?

[1] Source: Business Wire: http://www.businesswire.com/news/home/20160914005789/en/Fraud-Detection-Prevention-Market-Worth-33.19-Billion

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