Real-Time Fraud Prevention and AML Compliance: Case Study

real-time fraud prevention

How a real-time fraud prevention and AML system helped ease compliance and expanded business opportunities for IDT Telecom.

Name of Organization: IDT Corporation

Industry: Telecommunications, Payments

Location: Newark, NJ USA

Business Opportunity or Challenge Encountered

IDT Telecom, a pioneer in prepaid and VoIP telephony, is a leading provider of prepaid communication and payment services. The company’s Payment Services division sought to grow its business by offering prepaid cards, money transfers and other types of payment services, according to a recent case study. The company’s managers understood that real-time fraud prevention, sanctions screening, and anti-money laundering (AML) compliance were critical issues that had to be addressed with deep expertise, insight and speed. There also needed to be a fast and efficient customer experience with every transaction.

As IDT expanded into payment services, the management team’s focus on fraud detection, AML compliance and watch list screening intensified. The company needed an automated solution that could identify beneficial ownership and detect fraud accurately –without slowing or impeding legitimate transactions.

How This Business Opportunity or Challenge Was Met:

IDT implemented a system that would monitor, report on, and potentially block high-risk transactions based on business rules without impeding the customer experience, the case study reveals. The system was also intended to provide automated agent risk scores based on aggregate transaction activity level and other defined risk factors. The system also was designed to deliver reports and record keeping that would help the company comply with regulatory requirements.

The company contracted with Fiserv, a financial services vendor, for fraud detection and compliance capabilities associated with its payment services. Fiserv’s AML Risk Manager offers a platform that delivered analytics-based risk scoring to help stop fraud in real time. The system also enabled instant decision making, critical to maintaining a quality customer experience while also protecting the company from loss and compliance fines.

The system provides real-time predictive analytics that yield high detection and low false positive rates.

Measurable/Quantifiable and “Soft” Benefits from This Initiative

Once the system was fully implemented, IDT was able to continue to expand its payment services business. The company was able to add international bill-pay capabilities and real-time analysis for the U.S. Treasury’s Office of Foreign Assets Control.

In addition, IDT managers can continue to submit accurate and timely regulatory reports and an ability to show auditors and bankers it is in compliance anytime it is asked. The company is also able to continue to offer superior customer experience, the case study reports.

(Source: Fiserv)

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