Monday, January 07, 2008

Rules as a strategic advantage

Well, thats a pretty boring business-ey title. But bear with me.

Recently I returned from a holiday to my home town of Sydney, Australia (it was a road trip, which I always like). The weather was soggier then I would have liked, had approximately 2 hours at the beach, in total, but I digress.

The part that is relevant to this blog? Well the highway (pacific highway) is increasingly turning into one big long freeway, and like all freeways, it has lots of oversize billboards.

One interesting billboard was for ANZ - a very large regional (and Australian) bank (I think ANZ standards for Australia and New Zealand - New Zealand being the wonderful place where they filmed lord of the rings). It was advertising the fact that they have a system called "Falcon" to protect against credit card fraud.

(I actually tried to find a YouTube video of the commercial showing them "unleash the falcon" - it is quite funny, but not to be found. Also, I think this is perhaps the first and only time I will use you tube in something actually work related !).

This "Falcon" is actually a product from Fair Isaac - a fraud detection system built with rules (ie a specific vertical application). That is about all I know about Falcon - but congratulations due to Fair Isaac for having a product so successful that their customers feel it is significant enough to have a major marketing campaign advertising the fact that they use this product to protect their customers.

I thought this was a great case of rule systems (or indeed any software at all) actually being a strategic advantage, not just a boring back office sub system.

And happy new year !


  1. Hi Michael,

    I was also intrigued about this ad. I was thinking that by promoting Falcon in a way that suggested they 'owned' it, they were potentially making it difficult for other banks in Australia to also use the same product.


  2. I thought fraud detection is mainly handled by CEP engines?


  3. The ad is a riot but I don't think it is on YouTube sadly!
    Falcon actually combines business rules with dynamic profiles and sophisticated neural networks to do the fraud detection. The rules, profiles and neural networks all work to "score" the transaction as to how likely it is to be fraudulent and then banks use the rules to decide how to respond. It is a classic Enterprise Decision Management or EDM application that combines rules, analytics and adaptive control.

    James Taylor
    Author, with Neil Raden, of Smart (Enough) Systems

  4. Thanks for the clarification James. Yes if I can find the ad (legally) and post it, I will (or if you do, please share). Its one of my favourite ads (yes I have favourites).

    I would think CEP could come into it - but that would more be for the card places like VISA, Mastercard etc who have the stream of realtime transactions to say yes or no to. Whereas ANZ are the bank with the money - so they tend to look more and chunks of data (and react in slightly less real time).

  5. See for a link to the FIC Falcon product itself.

  6. Falcon has been around for yonks. I first came across it when implementing another Fair Isaac product in 1992, called Triad. The ad showed a Chinese Mafia gangmember with only three fingers being brought down by Hong Kong Jackie Chan-style cop.

    Sadly one of the above sentences is a lie.

  7. Sorry, my flippant point above, caused me to forget that the point of my post was to assure anyone interested that Falcon works in realtime. Should the system identify a transaction that appears fraudulent, it can decline the card transaction and block the account, until a fraud agent from your bank contacts you to verify the transaction.