Two case studies looking at combating internet fraud with analytics and using an InfoApp to help customers to analyse credit card purchases
In the book extract below, Dr Rado Kotorov, chief innovation officer of business intelligence and data analytics pioneer at Information Builders shares the common criteria for creating successful InfoApps, drawing from two of the nine case studies included in his book, “Organisational Intelligence – how smart companies use information to become more competitive and profitable,” which he co-authored with Information Builders’ CEO and president, Gerald Cohen.
“While all of the business intelligence case studies in our book were designed to serve different purposes, there is a common thread that identifies the critical factors for their successes.”
Providing information to employees and customers
The initiators of the case studies in our book understood that information and analytics produces the most value only when put into the hands of operational employees, partners, suppliers, and customers.
While analytics is necessary to produce insights, operationalisation is the only way to deliver the value of the insights. Hence, they turned those insights into informational products that called InfoApps.
Six common traits for successful business intelligence
We have identified six common traits within our customers’ case studies that lead to the successful implementation and deployment of InfoApps:
1. Recognising information as a business asset and having the insight to create an InfoApp
2. Selling the InfoApp idea internally in the organisation
3. Managing the cross-functional team creating the InfoApp
4. Designing an effective user experience
5. Managing the InfoApp as a product through its lifecycle
6. Providing self-service to everyone
Recognising information as a business asset
First and foremost, the initiators of these success stories understood the value of information for business value creation.
They gained support from their management team and colleagues for an InfoApp.
They all treated data and analytics as a business asset and they used it both strategically and tactically to enable fact-based decision-making, to deliver process enhancements, and to improve the customer experience.
Managing the cross-functional team creating the InfoApp
One essential ingredient for success when building informational applications is to establish a broad, cross-functional team.
InfoApps are by nature a collaborative effort between business, IT, analysts, internal and external consultants. It does not mean that the team is big, or that it will take a long time to develop.
It means that since the app will touch customers and/or operations, many people will be involved. The key to success is to quickly build a prototype and let the team members focus their discussion on the prototype.
People are better at improving products rather than at conceiving products. Give team members something real to interact with and build upon.
Designing an effective user experience
InfoApps are products. Just as with physical products, packaging matters. The look and feel of the app will influence the perception of the product.
Does the application immediately appear intuitive and as easy to use as Expedia.com? Is it branded in a way that conveys your corporate style? Is it perceived as modern and on par with what people are used to seeing on the web and on their phones?
Functionality is very important, but it does not trump appearance and usability.
In fact, most people today perceive well-styled applications as easier to use than poorly styled ones. Thus, the very first impressions should be that the user is entirely self-sufficient.
Managing the InfoApp product lifecycle
Every product has a lifecycle. As the data changes over time, the app may become less relevant or incomplete.
Be open to change, but be mindful to change it only when it’s really needed.
The key takeaway from Robert Kaufman, who spoke to us about the case study at U.S. Bank, is to develop the InfoApp fast: “Get it done, get feedback from users, and then move on to the next one.”
Providing self-service to everyone
Back in the day, self-service meant to consume static reports that had been pre-packaged by IT.
That definition has changed drastically as organisations have realised that the success of their business depends not only on delivering fast and accurate information directly into the hands of operational employees, but also on how diverse that information is.
A measure of organisational intelligence is the range of information that is delivered to people.
One answer frequently leads to another question. A key takeaway is to deliver information in open-ended applications that allow employees across multiple departments to have a dialogue with the data.
iovation case study- battling internet fraud with analytics
iovation was founded in 2004 with one simple goal — to make the Internet a safer place for people to do business and interact.
The Portland, Oregon-based company protects online businesses and their customers against fraud and abuse.
It also identifies trustworthy customers, through a combination of advanced technologies such as device identification, shared device reputation, device-based authentication, and real-time risk evaluation.
According to Kurk Spendlove, director of engineering at iovation, the key to effectively combating fraud is proactively detecting suspicious transactions and blocking them before they are executed.
This is a huge growth market for analytics.
iovation has its roots in the online gaming arena. Senior officers realised that the fraud prevention technology that they had created to protect their gaming apps was unique: “We realised that many of our clients were more interested in the support tools that we built for ourselves than they were in the online gaming platform that we were offering,” Kurk recalls.
A new business born from data analytics
A new business model was born that was dependent on analytics to succeed.
To provide its clients with greater visibility into fraudulent activities and to differentiate itself from competitors, iovation bolstered its Fraud Prevention solution with BI technology from Information Builders.
Fraud management teams, both internally and at its client sites, use Information Builders WebFOCUS InfoApps to investigate transaction details, device histories, and suspicious visitors.
Protecting 16 million transactions
More than 3,500 fraud managers in retail, financial services, insurance, social networking, gaming, and other industries use iovation’s database of information about billions of Internet devices to determine the level of risk associated with online transactions.
This database and iovation’s associated information systems, run around the clock to protect 16 million transactions and stop an average of 300,000 fraudulent activities every day.
iovation has built a knowledge base that contains information about the physical devices used to conduct online transactions.
It calculates a “reputation” for each device based on previous fraud history, associations with other bad accounts or devices, and real-time risk assessments.
Using data analytics for fraud prevention
Clients are alerted if a device directly or indirectly associated with a known fraudster tries to access one of their sites.
For example, if a user commits fraud on a financial site using an iPhone, then taps over to a retail site using that same phone, iovation will alert the retailer of potential malicious intentions, even if it is that user’s first visit.
iovation’s clients often conduct in-depth forensic research to gain visibility into fraudulent actions and trends.
That’s where WebFOCUS business intelligence comes in. Interactive reports and InfoApps allow clients to analyse actual and potential threats.
They can run complete transaction histories, or keep track of the number of suspicious transactions over time to figure out when peaks occur.
For example, they might want to obtain information about a specific device from a third party. WebFOCUS analytics let them investigate further—and to determine how that device has interacted with their site in the past.
A new portal, with analytics at its core
iovation created an analytic portal that contains several InfoApps and more than 100 reports, in addition to reports that are generated on a nightly basis and sent out to approximately 450 customers.
iovation’s internal customer support team is more productive thanks to its ability to access the new analytic portal to analyse information in the knowledge base.
This allows them to instantly answer complex questions and share insights gleaned from other customers.
“When we put more information in the hands of our customers, we minimise the number of calls placed to our support staff,” states Greg Pierson, CEO at iovation. “But they still frequently receive inquiries from customers with more complicated questions.”
Some clients use InfoApps to learn about best practices that other clients have implemented to combat fraud. In addition, the analytic portal helps iovation convey the value of its solutions to its customers.
“Our solution runs in the background,” Greg Pierson says. “The analytics make it very clear how we are keeping their sites protected.”
Using deep technology to enable scalability, integration and access to information
Another common factor shared across our customer stories is that the key characters understood the need and value of deep technology to make their InfoApps work.
People frequently underestimate the complexity in delivering information to decision makers, and thus, make optimistic promises or settle on hyped technologies that fail to deliver.
Deep technology allows you to build a single app that reaches a large percentage of employees who can get operational intelligence regardless of their job title, rank, or knowledge.
It allows you to build a single app which people can use to have a dialogue with the data and get factual answers to a wide variety of questions.
We call this open-ended information access. Contrast this with a report, which is a closed end. Every report contains answers to a fixed set of questions. If a new question arises, you have to go and request a new report. This creates a reporting bottleneck.
Deep technology enables scalability, access and integration of different data sources, complex security and data access rules, complex data queries, robust parameterisation, and front-end customisation.
This complexity is obfuscated for the end user by a simple and intuitive interface.
U.S. Bank case study – helping customers to analyse credit card purchases
Six years ago, U.S. Bank’s Payments Solutions division unveiled a new InfoApp called ScoreBoard.
At a time when internet banking services were just gaining traction at most large banks, this useful, high-profile service allowed the bank’s small business customers to analyse spending patterns on their credit cards, merchant processing accounts, and other types of electronic payment vehicles. It was an instant success.
Suddenly, small business owners could compare their corporate spending habits with other companies that have similar industry and geographic profiles. And they could click into interactive dashboards to see customised views of card payment activity, along with one-button access to consolidated statements and reports.
Providing information to employees and customers
“ScoreBoard empowers our credit card customers to see spending trends on a monthly, quarterly or annual basis, with the data broken down by market segment,” explains Robert Kaufman, senior vice president in the bank’s Corporate Payments group and former senior vice president in the Payments Solutions division.
“For example, a customer might see that over the last two quarters, 20% of their spending went towards travel and entertainment purchases.
They can drill down to the individual transactions to analyse their spending. We continue to hear positive feedback about its simplicity. It has been a huge success.”
Today U.S. Bank’s robust business tool allows millions of clients to monitor corporate spending and easily create reports to analyse data.
The customer-facing InfoApp is boosting adoption of U.S. Bank’s Internet banking channel, which improves customer loyalty and reduces support costs for the bank.
The U.S. Bank team continues to evaluate improvements and changes to the tool to best support its customers.
More than just a pretty face
The key driver of an Information Distribution App, like ScoreBoard, is to provide comprehensive documents and information to large numbers of users so they have a complete view of their accounts and business dealings.
Information Distribution apps are designed to improve the customer experience and eliminate costs associated with in-person inquiries.
To appeal to its diverse customer base, which includes retailers, restaurants, service bureaus, healthcare companies, and many other types of organisations, U.S. Bank created ScoreBoard in the form of a BI dashboard.
It uses colourful graphics to present interactive reports such as the Merchant Summary, which offers details about spending at specific merchants.
Business customers can view their data by individual cardholder or on a total company basis.
Meanwhile, the Merchant Detail report delivers this same information at the transaction level, while the Industry Summary report recaps spending by calendar month, either for each individual business card or on a total company basis.
Purchase amounts are organised into merchant categories, so small business customers can see exactly where they are spending their money.
They can view these reports on the screen, output them to PDF files, or download the data into Microsoft Excel or into Intuit QuickBooks—a huge timesaver for the bank’s business customers.
Kaufman credits Information Builders Professional Services for managing a complex project that included several distinct teams from U.S. Bank and its Elavon subsidiary.
Business leaders and technologists contributed insight, with help from the U.S. Bank infrastructure team (which hosts the application) and core technology group (which supplies the data).
Keep it simple
“We went from idea to implementation in about five months,” Kaufman recalls. “Of all the technology projects I have been involved with in my career, this has been one of the simplest. I remember thinking, let’s build this quickly and inexpensively, and then later we can develop something bigger and better. Well, here we are six years later and it’s still being heavily used. We didn’t have to rebuild it. People enjoy the value it provides now just as much as they did six years ago.”
Simplicity is often the nature of InfoApps. The idea is to create targeted, domain-specific solutions to particular business problems. “My advice is, don’t try to boil the ocean,” Kaufman adds. “Get it done, get feedback from users, and then move on to the next one.”
Scaling up to millions of users
Buoyed by the success of the first ScoreBoard initiative, the bank recently released a new version of ScoreBoard for its consumer banking customers—six million of them in all.
Like the popular small business version, the consumer version of ScoreBoard helps people make smarter decisions about their personal finances.
It also provides trending and reporting data so customers can monitor and compare their credit card spending to general consumer trends.
Consumer ScoreBoard includes three useful reports. The Merchant Summary reveals where customers are spending their money.
The Industry Summary groups their purchases by specific categories, such as Gas or Travel or Groceries.
The Annual Summary allows them to view a full year’s worth of data, both in summary and detailed views. U.S. Bank cardholders can also use the free application to download their own reports in HTML, Excel or PDF formats.
It is available to all U.S. Bank cardholders who have credit cards, debit cards, and credit lines through U.S. Bank.
The reports feature easy-to-read charts and graphs that provide a monthly snapshot of credit-card purchases and payments, such as travel, home improvement and gas purchases.
Using deep technology to enable scalability, integration and access to information
InfoApps often appear simple, but looks can be deceiving. It’s not just what you see on the front-end that make these apps useful, but what they do behind the scenes to ensure a scalable, high-performance experience.
With 6 million potential users — 800,000 of who use ScoreBoard regularly—the information architects had to ensure that the system could perform.
U.S. Bank selected Information Builders WebFOCUS to create its customer-facing InfoApps not only because it can create compelling applications quickly, but also because it has a robust back-end architecture that is capable of supporting large numbers of users with minimal infrastructure.
Its server-based reporting architecture provides a foundation for large-scale deployments at a relatively low cost. Built-in load-balancing and failover processes distribute the load across multiple back-end servers.
Native data-adapters speed up information retrieval, while a sophisticated data manipulation engine generates complex reports in one or two passes through the database.
WebFOCUS queries are dynamically partitioned, with complex number crunching and aggregation operations optimised across the back-end database and reporting servers, not on Web servers or front-end devices.
Thus a single processor can serve multiple, simultaneous user requests, maximising system performance.
U.S. Bank’s system administrators can easily scale-out each tier of this clustered architecture by using Information Builders’ Cluster Load Management software, Autonomic Server, and Workload Distribution Facility, which intelligently route requests to servers with the most available capacity.
Information Builders also developed a custom security module to seamlessly integrate ScoreBoard with U.S. Bank’s existing Merchant Dashboard environment via a single sign-on process.
Return on investment
ScoreBoard has been providing value for many years, with very little ongoing investment.
According to Kaufman, U.S. Bank spent about a quarter of a million dollars to get the first InfoApp online, yet it has easily saved the company tens of millions of dollars so far.
One way to quantify those savings is to calculate the immense expense involved in training thousands of customer-facing employees to supply credit card information to customers—not to mention staffing up the call centres and branches during busy times of the year.
Kaufman prefers to focus on the business benefits.
He says unique offerings such as ScoreBoard help U.S. Bank attract new clients and retain existing ones, driving revenue and building long-term value for the company. He foresees big savings in the call centre, especially as the Consumer ScoreBoard gains traction.
Source: Information Age