2018 BAI Global Innovation Award Finalists
Internal Process Innovation
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At the threshold of the digital era, customer numbers, transaction volume and service channels increase, and cyber gangs target employees for unauthorized and malicious purposes. As a result, internal fraud has become an issue of big data management.
As a solution to these challenges Intertech, the IT subsidiary of Denizbank, developed Business Analytics Driven Internal Fraud Defense, which goes far beyond fraud detection and turns a complex big data issue into an advantage using artificial intelligence and a self-learning algorithm. This intelligent fraud tool focuses on:
– Detection and prevention of internal fraud
– Preventing losses and protecting bank reputation
– Decreasing control lists, detection of new types of fraud faster with a self-learning algorithm
– Minimizing fraud detection duration
– Defining/updating rules without IT development
– Ensuring efficiency with a user friendly structure
Business Analytics Driven Internal Fraud Defense is a predictive application with a new and unique approach. With artificial intelligence and a self-learning and online algorithm, data derived from different sources are combined and fraud scores are produced automatically. As a result, the number of false-positive results decreases and fraud detection becomes easier. With a complex structure behind it, the tool has a user-friendly interface that enables greater efficiency.
Over the course of 18 months, Live Oak Bank completely transitioned its internal IT infrastructure and all applications to a pure Microsoft Azure environment, empowering all employees to serve customers anytime, anywhere, with highly secure yet intuitively accessible applications. Employees can sign up new customers and service existing ones anywhere, anytime using only laptops, smart phones and the power of the cloud to originate and process loans, process deposits and provide other banking products and services.
Cybersecurity risk controls have been increased by adoption of advanced authentication and authorization processes for accessing cloud services, including the deployment of advanced real-time big data event log storage, artificial intelligence and security analysis. Moving 100 percent to cloud operations essentially makes the hardware employees use – their laptops and smartphones – commodities without data value. Limited data is stored locally, and if an employee loses a laptop or one is stolen, it can be immediately detonated remotely.
The IT expense line has shifted completely away from capital expense to operating expense. No server hardware and no on-premise software remains, and operations are paperless and electronic. Every internal and customer-touching process was re-examined and optimized for cloud operations, and all applications were transitioned to the cloud. Current 2018 cost benefit analyses indicate a 40-50 percent reduction in corporate IT spend. The only owned hardware required to run Live Oak Bank are the laptops and smartphones its employees carry.
The RBC cross-border payments shadow ledger is one of the first Canadian-built and -owned blockchain networks deployed for day-to-day use in the financial domain. The blockchain application is integrated with existing systems and operates as part of the larger technology ecosystem. Architected, designed and developed in-house, it represents a significant milestone in the integration of emerging technology with existing systems.
Modelled as a shadow ledger, it operates in parallel with the existing ledger. The application’s capabilities are targeted towards internal users to enable operational efficiencies and an improved client experience:
– The application, which operates in real-time, provides operations staff insight into the state of payments, individually and in aggregate, so they can monitor payments flow as well as respond to any exceptional events that they feel would lead to an improved client experience.
– The application provides insight into critical account balances held with partner banks, a capability that enables better account monitoring and management for this business process.
The application has been deployed as an internal network between RBC U.S. and RBC Canada.