Austin Logistics Announces Solution for Float Decisioning that Sharply Reduces Payment Risk for Banks

Austin Logistics Inc., the leader in embedding predictive analytics into the customer decision lifecycle, today announced the availability of its NSFGuard predictive analytics software solution for payment risk management. Now, for the first time, card issuers looking to reduce payment risk can rapidly, in real-time or batch, score each individual payment transaction, enabling them to quickly identify high-risk, out-of-pattern (such as bust-out) and fraudulent payments. Accurate float decisions are then applied to these payments, made by checks and other payment vehicles, with little to no impact on ?Good? customers.

NSFGuard?s predictive analytic approach does this by attacking the float decisioning problem with greater precision and accuracy then traditional methods such as rules engines, decision trees and home-grown solutions. Until now, such solutions could only decision around bad payments at the individual account level. That meant that if an account was considered low risk, it was possible for a bad payment made on that account to slip through, unstopped.

NSFGuard, on the other hand, scores each payment, independent of individual account risk assessment. This gives a more accurate hold decision, for better identification of bad payments and fewer false positives. The results are both greater profitability, because fewer bad payments occur, and better customer relationships because fewer deserving customers get caught in a false positive float decision.

PREMIER Bankcard, headquartered in Sioux Falls, SD, which is one of the nation’s leading credit card providers to the underserved, yet creditworthy market, deployed NSFGuard to help meet its goal: identify the number of bad payments while affecting fewer total payments (in effect, reducing the number of false/positives.) The result was twofold: a 25 percent uplift in identification of bad payments?with positive affect on the issuer’s profitability; and a 35 percent reduction in false positives, which meant fewer “good” customers were negatively affected. Moreover, because NSFGuard produced more precise open-to-buy decisioning, it allowed deserving customers to get faster access to the appropriate line limit.

Interestingly, banks and issuers have struggled with this profit-impacting problem for a long time. So the issue of how much line or balance to give a customer who?s paid by check or other payment vehicles remains fraught with consequence. Providing more restrictive float decisioning jeopardizes customer satisfaction. Yet loosening funds availability increases risk. Until NSFGuard, this was literally a Hobson?s choice.

?Check payment fraud and counterfeiting are increasing substantially,? said Tom Miller, senior vice president, Austin Logistics. ?The National Check Fraud Center estimates this problem produces annual losses of $10 billion. And that figure doesn?t even include the negative influence on customer relationships. With issuers facing a wealth of problems, including saturated prime markets, risky market entry and competition from global issuers, they?re looking for solutions that will positively impact both profitability and customer service. NSFGuard is the first such solution that does both, without the need to implement an enterprise platform that could take years to implement.?