The domestic bank sector is going through a process of great change. The PSD2 regulation, based on which the financial institutions are obliged to open their infrastructure to external service providers (such as fintech companies), has already been implemented. The system of instant payments will go live at the beginning of March: from then on, each domestic HUF transfer, under 10 million, will have to go through within 5 seconds.
All this means, that the banks will have to apply novel methods to detect and prevent frauds. Putting suspicious transactions on hold, then calling the customer to make sure that they are indeed behind the transaction, won’t be viable anymore. If the transaction must be fulfilled within 5 seconds, then 150 milliseconds, or 0.15 seconds are available to detect fraudulent ones.
This was the challenge K&H Bank faced, and they called T-Systems Hungary to help. The bank was already satisfied with using the cybersecurity solution of T-Systems, and believed that by extending it, they can also resolve fraud detection. Additionally, it was also important that T-Systems could deploy the latest technology for success, and was able to provide long term, reliable and continuous support – listed Tamás Kovalovszki, Head of the K&H Bank’s daily finances, deposits and investments directorate, the criteria for selection.
The project and the implemented system is a special one from several aspects. First, contrary to the regular procedure in a banking environment, they did not introduce the monolithic system of a big vendor, instead, an almost fully open source technology based solution was built. Second, the Bank decided that they would not only use the new solution for detecting fraudulent transfers, but would also rely on it to replace functions of several earlier, separately working, similar systems (card, cyber and internal fraud detection). The solution is interesting because it uses a small, but important module, through K&H’s Belgian mother company, using their cloud system, explains Tamás Keiger, Senior sales manager of the T-Systems’ financial institutions business unit, the technical details.
As in every IT project, the development of the fraud detection system also had to overcome the difficulties of scarce resources and strict deadlines. The Hungarian Banking Authority’s postponing the launch of the instant payment system, made the latter somewhat easier. Still, the bank card fraud detection module had to go live, since the corresponding support system was switched off by the bank in October. The two companies managed to tackle the difficulties and issues emerging during the project, thanks to their especially good partnership. „Our collaboration was exemplary, we could continuously make compromises, and instead of the regular customer-vendor relationship, a genuine strategic partnership developed between the two companies”, said Tamás Kovalovszki.
The system offers a number of benefits to the bank. Efficient, lightning quick fraud detection and prevention will save costs for the company. Thanks to less fraudulent activities, the customer experience will also be better. By integrating various fraud detection solutions into a single system, the bank will obtain a more consistent, comprehensive view of their customers and the accuracy of detection will also improve. Last but not least, we can already have the analyses, that we used to generate with a lot of effort, easily and quickly.
Each year, T-Systems nominates three projects for the Project of the Year award, that are considered larger than average, not only due to their value or volume, but because they stand out on the basis of their novelty or complexity, representing a real professional challenge.