Case Study

OTP Bank Drives Down Fraud Rates and Increases Customer Engagement

Card fraud was a growing problem for OTP National Savings and Commercial Bank in Hungary. With fraud rates rising, the bank needed a solution that would be effective, easy to implement and attractive to customers. They turned to Spectrum and ACI Worldwide to create a mobile alert system that worked in near-real time to stop fraudulent transactions.

“OTP Bank decreases fraud 90% in 6 months”

Rising Card Fraud Prompts Bank to Seek Solution

OTP National Savings and Commercial Bank (OTP) is the largest retail bank in Hungary with over 50% market share and about four million payment cards. The bank has more than 1,500 branches and 2,000 ATMs in Hungary and also has subsidiaries in Ukraine, Russia, Croatia, Bosnia, Herzegovina, Serbia, Romania, Slovakia and Bulgaria.

With card payment fraud in Hungary running at more than three times the regional average OTP urgently required a solution. OTP required the security of bank card transactions to be enhanced in a simple and cost-effective way that did not require a large infrastructure change or significant investment, yet was easy to use by consumers.

MoneyGuard BASE24 Solution Expands and Improves Fraud Bank’s Monitoring Capability

With the cooperation of BASE24 experts, Spectrum created MoneyGuard, a solution which interfaces with BASE24 and BASE24-eps from ACI Worldwide, to identify a card transaction as it comes into the system, and sends a text message notification based on pre-defined criteria to the cardholder’s mobile phone.

The solution is a highly scalable and versatile platform which can be used for a whole range of added-value functions in addition to fraud alerting. OTP connects MoneyGuard directly with ACI’s BASE24 payment switching software and has also added ACI Proactive Risk Manager™, replacing its own fraud monitoring software.

90% Reduction in Fraud Within 6 Months

After installing MoneyGuard, OTP saw an immediate and impressive reduction in fraud. In the first quarter of service, fraud decreased 70% and within two quarters, it had decreased a total of 90%. OTP’s payment card fraud level is now well below the European average.

An additional benefit has been a reduction in card fraud overall, even for customers not using MoneyGuard. There has been a “halo effect” as criminals realize it is not worth the effort to target OTP customers, as a large percentage use MoneyGuard and fraud will be detected almost immediately.

According to Mr. Ákos Takáts, the deputy CEO and head of the IT and bank operations division of OTP Bank, “Although SMS alerting started as an addition to a fraud monitoring system, MoneyGuard quickly became a highly regarded fundamental customer service of the bank that was associated with its innovative thinking whilst generating significant profit.”