BNZ partners with IBM for cross-channel fraud prevention

We are stepping up protection, analysing every transaction in real time, but without sacrificing the customer experience Owen Loeffellechner, BNZ

Bank of New Zealand says it is deploying IBM Safer Payments, a modern transaction monitoring system that allows banks to intercept fraudulent activity before it happens, while ensuring customers’ genuine transactions are not stopped in error.

IBM Safer Payments uses machine learning and artificial intelligence to analyse behaviour and fraud patterns, build and adapt models of emerging fraud threats, and recommend countermeasure responses.

Implementation of the Safer Payments system is already underway and BNZ’s 1.2 million customers will be enjoying heightened security within weeks.

“We are ruthlessly vigilant in protecting our customers’ trust in us, and we put security front and centre so they can be sure their money and personal information is well-protected,” says Owen Loeffellechner, chief safety and security officer at BNZ.

“With IBM Safer Payments, we are stepping up this protection, analysing every transaction in real time, but without sacrificing the customer experience,” he adds.

“Everything we do to protect our customers from fraud and cybercrime also helps us contribute to upholding New Zealand’s excellent e-commerce and trading reputation globally.”

Owen Loeffellechner, chief safety and security officer at BNZ

IBM Safer Payments uses both financial and non-financial data together with a customer’s transaction history, to perform rigorous authentication and profiling on each and every transaction.

Fraudulent transactions are quickly identified – allowing them to be stopped, or put on hold pending further validation. The solution also complies with all credit card scheme rules.

“Banks are facing the challenge of needing to adapt to meet their customers’ evolving expectations for a frictionless transaction, while also ensuring their security,” says Mike Smith, managing director of IBM New Zealand.

“With financial crime becoming increasingly sophisticated, BNZ partnered with IBM to address the rising threat of crime and fraud while still enabling top quality experiences for customers and allowing for future growth.”

BNZ says the multi-million dollar deal will support its aim to provide customers the ability to bank securely while delivering a positive customer experience.

BNZ says many conveniences that customers enjoy as a result of modern banking carry an increased risk of fraud.

Global card fraud losses are on the rise, and from 2016 to 2025, they are projected to nearly double, climbing from US$22.8 billion to nearly $50 billion, says BNZ.

It points out legacy systems were designed to see and stop easily recognisable fraud patterns, however modern anytime, anywhere banking on mobile devices has made fraud detection much more challenging.

Banks’ time to respond is also shrinking as real-time payments mean there are just milliseconds to detect and prevent theft before it’s too late, it points out.

“Banks are facing the challenge of needing to adapt to meet their customers’ evolving expectations for a frictionless transaction, while also ensuring their security,” says Mike Smith, managing director of IBM New Zealand.