IBM Systems Magazine, Mainframe - July/August 2016 - 19

Supplementing traditional
fraud prevention methods
with analytics improves an
organization's ability to pinpoint
patterns or trends in data that
indicate likely fraud schemes.
By combining analytics, human
insight and machine learning,
companies can predict attacks,
protect against improper
transactions and take steps to
prevent them in the future.

Predictive Modeling
in Action
Because fraud is hard to detect
and can happen quickly,
organizations may not realize
they've been defrauded until
after the money is gone. Such
was the case for Medicare when
it paid nearly $35 million to a
criminal cohort that used stolen
personal information to bill
the program for unperformed
medical services, according
to Analytics magazine
(bit.ly/1WeaZmN).
Predictive modeling can
play a significant role in the
early warning, detection and
monitoring of fraud, and early
detection of fraud-before
a payment is made-can
significantly reduce losses.
Recognizing its own vulnerability
to billing swindles, the Centers
for Medicare and Medicaid
Services (CMS) implemented
a system for identifying fraud
using predictive analytics,
which in 2014 helped the CMS
identify or prevent more than
$210 million in fraud, as noted
in Modern Healthcare magazine
(bit.ly/1SZvTky). By aggregating
historical data of past fraud
events and using those variables
in predictive models, companies
can anticipate the likelihood
of future fraud events and take
appropriate steps.
Similarly, connection analytics
can identify individuals and

companies suspected of
engaging in fraud by offering
greater visibility into fraud
across a network, in addition
to a single person or entity. By
spotlighting such links, the CMS
can identify new threats earlier,
minimizing financial losses.

protection that might
alienate customers.

Uncovering the Trail

Eliminating False
Positives With
Geolocation
Between 2013 and 2014,
credit card breaches increased
more than 3x to 31.8 million
incidents (bit.ly/1NBokyO).
Not surprisingly, companies
that issue credit cards-from
financial institutions to
retailers-rely heavily on fraud
detection processes to protect
customers. If they aren't careful,
those processes can lead to poor
customer experiences.
When companies block
charges based on an anomaly,
such as uncharacteristic
charges in a new city, they
risk deactivating a credit card
for fraudulent activity when
the customer is conducting
legitimate business. In fact,
50 to 80 percent of declined
transactions overseas
occur due to false positives
(on.mktw.net/1qE5Msz).
Multifactor authentication
incorporates any two of three
types of authentication:
something you have, something
you know and something
you are. Along with analytic
insights, companies can keep up
with sophisticated attacks while
also protecting the customer
experience.
For example, a credit card
issuer can ping an account
holder's registered mobile
device when a location-based
anomaly triggers a fraud alert.
By confirming the location
matches the charges, the
company avoids overzealous

$$$
65 percent
of organizations
hit by fraud only
recoup

25 percent
or less of the
stolen funds,
as reported at
AllBusiness.com

Today, almost anyone who
commits fraud leaves behind
digital fingerprints. With
the help of fraud analytics,
organizations can follow the
evidence to identify the culprits.
For example, when fraud occurs
in banking, the people stealing
the money need a place to send
it. Fraud analytics can spot the
movement of funds from one
location to another-an action
that cannot be hidden. The
analytics also enable companies
to better understand customer or
employee behaviors that could
be fraudulent, uncover atypical
business actions, and identify
where and when fraud occurred
or is likely to occur.
A fraud prevention strategy
enhanced by analytics
helps mitigate financial and
reputational risk. In today's
global business landscape,
companies face increased
regulatory scrutiny related to
anti-bribery and corruption
compliance, as well as to the
protection of consumer data.
Regulators expect traceability
when it comes to compliance,
and a clearly defined, proactive
approach to fraud prevention
helps companies demonstrate
a commitment to mitigating the
risk of fraud.
Ultimately, when it comes
to predicting, protecting and
preventing fraud, companies
must implement comprehensive
strategies that encompass
traditional prevention methods,
such as holographs on banknotes
and cybersecurity monitoring
with analytics-based fraud
detection, to ensure they remain
as agile and adaptable as those
who are operating with more
nefarious purposes.

ibmsystemsmag.com JULY/AUGUST 2016 // 19


http://www.bit.ly/1NBokyO http://www.bit.ly/1WeaZmN http://www.AllBusiness.com http://on.mktw.net/1qE5Msz http://www.bit.ly/1SZvTky http://www.ibmsystemsmag.com

Table of Contents for the Digital Edition of IBM Systems Magazine, Mainframe - July/August 2016

Table of Contents
Editor's Desk: Security from every angle
IBM Perspective: Creating a secure foundation for hybrid cloud
Techbits: 'W' is for 'Watson'
Partner PoV: Get everyone in your organization on board with DevOps
It Today: Use analytics to improve DevOps effectiveness
Trends: Analytics can be your best defense against corporate fraud
R&D: IBM's data privacy and consent management technology provides greater control
Case Study: Head of the Class: Pacific Life gets ahead of retirement with Mainframe Academy training program
Cover Story: Defending Digital Domains: The z Systems mainframe proves to be a formidable defense system against cyberthieves
Feature: Securable z Systems: IBM offers platform-specific security solutions to address business needs and demands
Tech Showcase: A comprehensive backup and recovery solution is needed with always-available date
Sponsored Advertising Content: HotTECH Products
Tech Corner: Overview: The latest CICS and IMS updates place z Systems at the center of the API economy
Tech Corner: IMS: IBM IMS helps support innovation to stay competitive
Tech Corner: CICS: Getting started with architecting Java Enterprise Edition in CICS Transaction Server
Solutions: SUPERMON for Tubes, zHISR 2.7
Stop Run: IBMer finds his balance with hiking and mountaineering
Reference Point - Global Events, Education, Resources for Mainframe
2016 Mainframe Solutions Edition Product Index
IBM Systems Magazine, Mainframe - July/August 2016 - Intro
IBM Systems Magazine, Mainframe - July/August 2016 - Cover1
IBM Systems Magazine, Mainframe - July/August 2016 - Cover2
IBM Systems Magazine, Mainframe - July/August 2016 - 1
IBM Systems Magazine, Mainframe - July/August 2016 - Table of Contents
IBM Systems Magazine, Mainframe - July/August 2016 - 3
IBM Systems Magazine, Mainframe - July/August 2016 - 4
IBM Systems Magazine, Mainframe - July/August 2016 - 5
IBM Systems Magazine, Mainframe - July/August 2016 - Editor's Desk: Security from every angle
IBM Systems Magazine, Mainframe - July/August 2016 - 7
IBM Systems Magazine, Mainframe - July/August 2016 - IBM Perspective: Creating a secure foundation for hybrid cloud
IBM Systems Magazine, Mainframe - July/August 2016 - 9
IBM Systems Magazine, Mainframe - July/August 2016 - Techbits: 'W' is for 'Watson'
IBM Systems Magazine, Mainframe - July/August 2016 - 11
IBM Systems Magazine, Mainframe - July/August 2016 - Partner PoV: Get everyone in your organization on board with DevOps
IBM Systems Magazine, Mainframe - July/August 2016 - 13
IBM Systems Magazine, Mainframe - July/August 2016 - It Today: Use analytics to improve DevOps effectiveness
IBM Systems Magazine, Mainframe - July/August 2016 - 15
IBM Systems Magazine, Mainframe - July/August 2016 - 16
IBM Systems Magazine, Mainframe - July/August 2016 - 17
IBM Systems Magazine, Mainframe - July/August 2016 - Trends: Analytics can be your best defense against corporate fraud
IBM Systems Magazine, Mainframe - July/August 2016 - 19
IBM Systems Magazine, Mainframe - July/August 2016 - R&D: IBM's data privacy and consent management technology provides greater control
IBM Systems Magazine, Mainframe - July/August 2016 - 21
IBM Systems Magazine, Mainframe - July/August 2016 - 22
IBM Systems Magazine, Mainframe - July/August 2016 - 23
IBM Systems Magazine, Mainframe - July/August 2016 - Case Study: Head of the Class: Pacific Life gets ahead of retirement with Mainframe Academy training program
IBM Systems Magazine, Mainframe - July/August 2016 - 25
IBM Systems Magazine, Mainframe - July/August 2016 - 26
IBM Systems Magazine, Mainframe - July/August 2016 - 27
IBM Systems Magazine, Mainframe - July/August 2016 - Cover Story: Defending Digital Domains: The z Systems mainframe proves to be a formidable defense system against cyberthieves
IBM Systems Magazine, Mainframe - July/August 2016 - 29
IBM Systems Magazine, Mainframe - July/August 2016 - 30
IBM Systems Magazine, Mainframe - July/August 2016 - 31
IBM Systems Magazine, Mainframe - July/August 2016 - 32
IBM Systems Magazine, Mainframe - July/August 2016 - 33
IBM Systems Magazine, Mainframe - July/August 2016 - Feature: Securable z Systems: IBM offers platform-specific security solutions to address business needs and demands
IBM Systems Magazine, Mainframe - July/August 2016 - 35
IBM Systems Magazine, Mainframe - July/August 2016 - 36
IBM Systems Magazine, Mainframe - July/August 2016 - 37
IBM Systems Magazine, Mainframe - July/August 2016 - 38
IBM Systems Magazine, Mainframe - July/August 2016 - Tech Showcase: A comprehensive backup and recovery solution is needed with always-available date
IBM Systems Magazine, Mainframe - July/August 2016 - 40
IBM Systems Magazine, Mainframe - July/August 2016 - 41
IBM Systems Magazine, Mainframe - July/August 2016 - 42
IBM Systems Magazine, Mainframe - July/August 2016 - 43
IBM Systems Magazine, Mainframe - July/August 2016 - Sponsored Advertising Content: HotTECH Products
IBM Systems Magazine, Mainframe - July/August 2016 - 45
IBM Systems Magazine, Mainframe - July/August 2016 - 46
IBM Systems Magazine, Mainframe - July/August 2016 - 47
IBM Systems Magazine, Mainframe - July/August 2016 - 48
IBM Systems Magazine, Mainframe - July/August 2016 - 49
IBM Systems Magazine, Mainframe - July/August 2016 - Tech Corner: Overview: The latest CICS and IMS updates place z Systems at the center of the API economy
IBM Systems Magazine, Mainframe - July/August 2016 - 51
IBM Systems Magazine, Mainframe - July/August 2016 - 52
IBM Systems Magazine, Mainframe - July/August 2016 - 53
IBM Systems Magazine, Mainframe - July/August 2016 - Tech Corner: IMS: IBM IMS helps support innovation to stay competitive
IBM Systems Magazine, Mainframe - July/August 2016 - 55
IBM Systems Magazine, Mainframe - July/August 2016 - 56
IBM Systems Magazine, Mainframe - July/August 2016 - 57
IBM Systems Magazine, Mainframe - July/August 2016 - Tech Corner: CICS: Getting started with architecting Java Enterprise Edition in CICS Transaction Server
IBM Systems Magazine, Mainframe - July/August 2016 - 59
IBM Systems Magazine, Mainframe - July/August 2016 - 60
IBM Systems Magazine, Mainframe - July/August 2016 - 61
IBM Systems Magazine, Mainframe - July/August 2016 - 62
IBM Systems Magazine, Mainframe - July/August 2016 - Solutions: SUPERMON for Tubes, zHISR 2.7
IBM Systems Magazine, Mainframe - July/August 2016 - Stop Run: IBMer finds his balance with hiking and mountaineering
IBM Systems Magazine, Mainframe - July/August 2016 - Cover3
IBM Systems Magazine, Mainframe - July/August 2016 - Cover4
IBM Systems Magazine, Mainframe - July/August 2016 - Reference Point - Global Events, Education, Resources for Mainframe
IBM Systems Magazine, Mainframe - July/August 2016 - 2016 Mainframe Solutions Edition Product Index
IBM Systems Magazine, Mainframe - July/August 2016 - SE2
IBM Systems Magazine, Mainframe - July/August 2016 - SE3
IBM Systems Magazine, Mainframe - July/August 2016 - SE4
IBM Systems Magazine, Mainframe - July/August 2016 - SE5
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