Case Study: TSYS Smart Secure for ecommerce decisioning

TSYS develops innovative products and solutions that solve real customer challenges.

Like many card issuers, Metro Bank desired to ensure 3D Secure (3DS) compliance due to the change in PSD2 rules for Strong Customer Authentication (SCA). Metro Bank determined it would probably not be able to accomplish that compliance with its existing provider, primarily because of a lack of provider’s integration in Metro Bank’s ecommerce fraud environment.

Enter TSYS. Metro Bank officials learned that TSYS was developing its own product in the 3DS space. Metro Bank knew that TSYS’ PRIME Access Control Server (ACS) was already established in the market, and Metro Bank had just achieved positive results by implementing TSYS’ Foresight Score with Featurespace’s ARIC^TM machine learning engine. The combination of TSYS with Featurespace — and Metro Bank’s past experience from working with both — led Metro Bank to partner with TSYS. As a result, Metro Bank was the first client to go live with TSYS Smart Secure in November 2021.

Solving Metro Bank’s challenges

Siloed channels

Metro Bank faced numerous challenges, starting with three unique channels that all had different resource requirements and contained disparate data: a consumer mobile app, a consumer web platform, and an online banking commercial card application. None of these channels could communicate with each other.

Compliance

Metro Bank was also looking to lower the compliance burden while integrating their credit and debit card portfolios under one central authentication process. Given Metro Bank’s high standards for customer service, they wanted a frictionless fraud solution for cardholders.

Baseline stability

Finally, they desired greater uptime stability. Responsiveness of a service provider was a key consideration in Metro Bank’s plan to stabilize uptime.

Combining resources to answer the challenge

Using TSYS Smart Secure as a catalyst and by pulling in device profiling, Metro Bank was able to migrate all three channels onto a single platform in a shared fraud ecosystem. This gave cardholders the ability to start trusting devices and IP addresses and allowed Metro Bank to better capture account takeover attempts thanks to the ecosystem feeding more data into the TSYS Smart Secure solution.

Metro Bank and TSYS collaborated to achieve optimized performance and meet PSD2 SCA regulations. Fully certified and compliant, TSYS Smart Secure’s enhanced access to relevant and timely data gave Metro Bank the visibility needed to contact merchants quickly and proactively — resolving 3DS issues that previously may have gone ‘under the radar’.

Metro Bank ramped up TSYS Smart Secure until reaching its main book of business of more than one million debit and credit cardholders. Inherently, the day a business chooses to migrate large volumes involves risk, however, the migration was successful and completed ahead of the compliance requirement deadline. The migration progressed amidst a fully remote working environment with the onset of the pandemic. The migration could have gone wrong and inconvenienced customers, but this was not the case.

Service beyond expectation

The combination of layering authentication and authorization with TSYS Smart Secure and TSYS Foresight Score working together in a combined fraud ecosystem resolved many of the challenges Metro Bank faced. With the Smart Secure integration based on SCA requirements, Metro Bank advanced from a step-up one-time passcode (OTP), to authenticating payments within its mobile app and online banking platform.

TSYS’ global experts augmented Metro Bank’s right-sized, focused team and helped deliver the solution. TSYS brought in experienced resources during the initial implementation, responding to Metro Bank’s needs for customization and resource assistance through the initial phases of the project. TSYS' partner, Featurespace, added vital programming expertise to support Metro Bank. ARIC, the machine learning engine, operates very differently from what Metro Bank had in place from a fraud prevention perspective. The primary difference is how rules are written within the system.

The depth of integration within the TSYS fraud ecosystem available to feed the model was based on Metro Bank’s specific findings. Fraud managers could see authentication requests come through TSYS fraud management and determine whether they had been successfully authenticated. This integration allowed Metro Bank to essentially mark its fraud in one system and have it automatically update the other.

Model performance — machine learning results

Integration

TSYS Smart Secure, integrated with TSYS’ core card processing capabilities and leveraging Featurespace technology and expertise, is now a critical part of a bank’s customer-centric fraud management system. TSYS Smart Secure offers unfettered visibility into the payments data for Metro Bank to learn spend behaviors and use that knowledge to provide a better cardholder experience. Combining authentication and authorization under one provider gives Metro Bank an opportunity to enhance its analytics and make informed decisions in terms of authentication. This helps avoid scenarios where cardholders go through step-up authentication only to be declined by card blocks or insufficient funds.

Metro Bank also added features, such as intelligent authentication, which enable real-time checks for available funds before authentication. This enhanced Metro Bank’s existing device and online profiling tool by providing a single customer view based on a unique digital behavior across all banking channels. Before TSYS Smart Secure, Metro Bank couldn’t perform enterprise profiling. Interrogations were split between cards and non-plastic banking activities — where scam attempts are concentrated. Now, Metro Bank learns from many sources to build the profile and applies it across the entire banking relationship, to achieve a full view of the customer’s digital identity for the first time.

Enhanced metrics

Based on the period of transactions from July 2023 to February 2024, through machine learning scoring and rich fraud decisioning, Metro Bank challenged 5.5% of its overall 3DS authentication volume and confirmed that 77.8% was fraudulent behavior. This metric tracks under the mandatory challenge threshold, the transaction value band where fraudsters generally operate. This confirms that TSYS Smart Secure’s model and fraud detection capabilities accurately spot fraud and invoke the necessary challenges.

Additionally, the score threshold for these challenge rates also increased in the same time period. The higher the score, the more likelihood of fraudulent behavior. As the model continues to learn and adjust, the score threshold will likely continue to increase, along with fraud challenge rates. This gives the fraud strategist increasing confidence in the score’s ability to detect fraudulent behavior. Through TSYS’ daily reporting packs and scorecards, the fraud strategist’s burden is significantly reduced in having to play the guessing game with setting the score threshold in rules. And for transactions, it’s a win-win as Metro Bank’s data is proving the impact of fraud detection in reducing unnecessary inconveniences to the consumer.

Reporting

Daily outputs of visuals are available via the TSYS Client Portal. The user is able to filter a myriad of data points and glean insights on individual performance using dashboards.

Keys to client success

Continuous improvement and innovation

The user interface (UI) is continuously improving for Metro Bank cardholders, resulting in faster processing and reducing the number of challenges against genuine transactions. For fraud operators at Metro Bank, they’re seeing significant reduction in the number of steps and complexity.

Yet another area of innovation, data reporting, is seeing robust improvement, now providing detailed views through dashboards. With TSYS, fraud operators can request isolated metrics, enabling reporting with flexibility to make more timely changes.

Depth of relationship

Apparent in the handoff from the TSYS implementation team to Metro Bank’s fraud team is the unwavering client support from the TSYS Managed Services team, who are experts in managing policies and back office functions. The synergistic effect of TSYS’ client consultants working directly with Metro Bank fraud operators on weekly fraud ‘check-in’ calls, generates an easier implementation to support transition even to the point where Metro Bank takes control. Operators receive the scorecard, then review it and adjust rule sets in accordance. TSYS consultants adjust the bands, then place them in a monitoring phase for a period of time just to make sure all behavior is as expected. Then the rules ‘go live’ impacting customers and their journeys. This results in a seamless transition from TSYS implementation to the point TSYS maintains and manages support.

Stability

The prevailing theory is that if you challenge broadly, fraud will go away. With scams, you challenge them, but fraudsters will still get through because they're controlling the account. The principle is to find more fraud than the last model. With a machine learning model like TSYS Smart Secure, reliance on fraud rules is lessened, and more emphasis is placed on the score. When compared to other vendor solutions, most require significant re-trains of their models. Great performance is realized for a while, but the model doesn't actually move with time. Fraud changes quickly and as soon as you stop one form of fraud, fraudsters move on to the next.

Other models are not trained on the current fraud threat. With a dip in performance, the model is re-trained and then performance starts to accelerate again. In effect, an FI will experience a rollercoaster of performance. With the TSYS machine learning model with Featurespace, as long as case marking occurs, ARIC immediately sees what's fraudulent, enabling the model to continuously learn. Therefore, the rollercoaster effect may be avoided and stability is realized.

Single fraud provider ecosystem

Fraud teams are challenged with bolt-on 3DS solutions that aren't fully integrated across the payments journey, inhibiting real-time data access. TSYS Smart Secure leverages a proprietary ACS that’s pre-integrated across the entire fraud ecosystem including fraud analytics, TSYS Communications and Featurespace’s ARIC rules engine. Its API-driven architecture allows for seamless integration into third-party fraud and authorization systems with TSYS Smart Secure. Fraud strategy and operations teams can better leverage data in near real time for rules and case management that leads to a reduction in fraud.

TSYS is doing all the heavy lifting: protocols, compliance, regulations, data integrations with core processing, fraud ecosystem and even microservice partners. Clients have to simply utilize the service.

TSYS Smart Secure Differentiators

Smarter decisioning

Without integration in your fraud ecosystem, the authentication and authorization do not talk to one another. They operate in silos. Intelligence from pre-authorization is essentially lost.

This is what’s meant by making smarter decisions: TSYS Smart Secure is making smart call outs to the authorization platform to say, “I'm about to put this customer through an authentication journey, but before I do, can you tell me, do they already have a block on their card?” TSYS utilizes non-monetary aspects, and that's one of the advantages of Smart Secure. It’s a wealth of data that a standard 3DS solution just wouldn't see that influences the customer journey in a far better way.

New service stability

TSYS Smart Secure is based on proven technology. It’s derived from the seamless integration of two existing — and proven — solutions: TSYS PRIME’S ACS, which is deployed at dozens of issuers globally, and Featurespace’s ARIC Risk Hub. With a backbone of proven technology, TSYS Smart Secure benefits from the stability of using machine learning to quickly adapt to new trends in payments fraud.

Maximized digital engagement

Customer perception of security increases. Inquiries to the Metro Bank contact center diminish. TSYS teams collaborate on design screens that Metro Bank describes as “easy to navigate, clear and self-explanatory”, that fully explain the step-up process.

Fraud performance and operational simplicity

The Metro Bank fraud team’s rule writing and digital profiling combine to deliver strong results. Metro Bank vigilantly tracks transaction risk analysis throughout and is delighted to see stable basis points and no jeopardizing of exemption rates — avoiding friction through step ups at lower purchase thresholds. For the first time, Metro Bank colleagues can access vast, meaningful data on one screen. They perform tasks just once in a single, integrated tool, avoiding multi-system inefficiencies.

Built on pillars of success

Metro Bank’s fraud advantage with TSYS Smart Secure is built on pillars of shared success. Its excellent customer service reputation is now supported by less friction for cardholders, the protection of cardholders with smarter decisioning, complying with industry regulations and continued innovation and agility that’s generating growth with operational efficiency as a result of the fraud solutions that TSYS provides.

If you're interested in learning how TSYS can help you align your data and fraud fighting strategies within a comprehensive fraud solution, please click here.