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Solution OverviewIndustry |
When it comes to credit-card fraud, the detective work is anything but elementary. With millions of dollars at stake and thousands of merchants depending on timely payment, the job must be done right and it must be done fast. The people at Louisville, Kentucky-based Financial Alliance know this, because that's the job they do every day: examine 100,000 credit-card transactions, flagging the ones that may be problems and sending the others through-all by six o'clock that evening.
A subsidiary of Deluxe Corp., Financial Alliance (FA) processes $2.5 billion annually in credit-card transactions, guarantees payments to some 45,000 merchants, and provides customer service to more than 170 banks issuing credit cards such as MasterCard, VISA, Discover, Diners Club, and American Express. Having boosted its revenue by 10 percent in the first quarter of 1995 alone, the young company now stands in the top tenth of its industry. In response to such growth-and anticipating even more of it-FA has developed an enterprise-wide client-server system and mission-critical applications based on the Microsoft® BackOffice product family.
Reliability and Efficiency Imperative
The need for such a system became evident soon after FA launched its operations in 1992. At that time, FA ran its business on a Novell®-based network of servers and desktop computers connected over Novell NetWare® for SAATM to an IBM® 3090TM at Omaha, Nebraska-based FDR, the institution directing the actual funds transfer. For fraud detection, FA used an MS-DOS®-based filtering program.
"Because we've standardized on open systems, we can move quickly-into other transaction-based industries, for example-and not worry about conflicting with legacy systems."
Jeff Compton |
But problems arose with this setup, the most critical concerning reliability. In response to unpredictable events, FA's processing load could fluctuate by nearly 100 percent, a variance its information systems could not handle. "Large queries would routinely crash the database, and the SAA link was down at least 10 percent of the time," says MIS Director Jeff Compton.
In addition, the fraud-detection program wasn't flexible enough to filter out false alarms, which meant that analysts had to hand-sift daily through a 2500-page report. Moreover, the lack of widely accessible and timely information slowed the new-account approval process and made customer service costly and inefficient. To answer the 40,000 customer inquiries that came in every month, FA was spending $350,000 annually maintaining microfiche archives. Even worse, each inquiry required three or four days to resolve.
Time for an Overhaul
By late 1993, Compton and his MIS colleagues decided it was time for a system overhaul. After evaluating alternatives, they rejected a system running the UNIX® operating system and the SYBASE® SQL ServerTM database management system in favor of a Microsoft BackOffice solution. "For us the Microsoft products offered clear advantages, particularly in terms of fault tolerance, centralized administration, interoperability, ease of upgrades, and scalability," Compton says. Over the next five months, three FA developers built an initial release of the new system.
Today, the enterprise-wide FA information system resides on six 128-MB RAID 5 PentiumTM symmetric multiprocessing servers running the Microsoft Windows NTTM Server operating system. One server runs a Microsoft SQL Server-based database for accepting initial transaction information from an off-site company and passing it along to a new, mission-critical, fraud-monitoring application. This database is 10 gigabytes, supports an average of 75 users and a peak of 150 users, and processes some 550 transactions per second and millions of transactions per month.
Another server runs Microsoft SNA Server for connection with FDR's IBM 3090 and other remote IBM mainframes. Yet another server runs Microsoft Remote Access Services (RAS) for remote administration and communications with regional offices, and the three remaining servers provide domain, file/print, and e-mail services. Also connected to the network are 275 client workstations running the Windows® for Workgroups operating system, Microsoft Office Professional, Microsoft Mail, and an assortment of custom applications for fraud monitoring, new-account approval, and other activities. The new applications use front ends created with the Visual Basic® programming system and either Microsoft Access or Microsoft SQL Server back ends.
Saving Time and Effort
"From the get-go, we've done great things with this system, particularly in terms of reliability," Compton says. "We have round-the-clock, near-real-time transaction processing, with virtually no database crashes or downtime in links to remote systems."
On the application level, the fraud-detection system is providing major efficiency improvements. "Because the new system enables us to use rules-based analysis at the merchant level, we're reducing the number of false alarms," he explains. "In turn, we're saving considerable effort and time by concentrating on the cases most likely to be fraudulent."
Line-of-business information is also now easily accessible throughout the company, expediting new-account approval and customer service alike. "Employees can export data from the Microsoft SQL Server database in their choice of Microsoft Excel, Word, or Microsoft Access formats," Compton points out. "As a result, they're finding it easier than ever to address risk management, operating efficiency, profitability, and customer satisfaction."
For example, in the first quarter of 1995, FA approved most new accounts in one-third to one-seventh of the time required on average in the industry. As for customer service, by replacing its microfiche archives with online information, FA has slashed the costs of maintaining the microfiche down to practically zero and is answering most customer inquiries within a few minutes. What's more, information is always available because FA doesn't need to take systems off line at night to update master records, as its competitors on mainframe systems must do.
Corollary advantages are FA's low system-maintenance costs and superior flexibility. "So far, we have spent the same amount a typical mainframe shop would spend on a year's maintenance and upkeep on our entire system," Compton explains. "Because we've standardized on open systems, we can move quickly-into other transaction-based industries, for example-and not worry about conflicting with legacy systems."
A Strong Competitive Position
The next plan for the system is to use Microsoft Remote Access Services to provide dial-up access to all of FA's 18 regional offices throughout the United States. After that, FA will upgrade its Microsoft SQL Server databases to support some 18 million transactions per month and will implement super-redundant databases using Microsoft SQL Server version 6.0. Another near-term FA project calls for Microsoft Systems Management Server to administer desktop software licensing. "Systems Management Server will help us put a huge dent in the paperwork we ordinarily would have to do for licensing," Compton points out.
Now that FA has implemented a Microsoft BackOffice system to such a degree, Compton says, the company finds itself in a strong competitive position. "No doubt others in the industry are considering moving toward client-server, but we're not worried," he says. "With the powerful base we've already established, I figure we're about three years ahead of anyone else on the learning curve."
For More Information
For more information about Microsoft products, call the Microsoft Sales Information Center at (800) 426-9400. In Canada, call the Microsoft Canada Customer Support Centre at (800) 563-9048. Outside the 50 United States and Canada, please contact your local Microsoft subsidiary. To access information via the World Wide Web, go to http://www.microsoft.com.
© 1995 Microsoft Corporation. All rights reserved.
This case study is for informational purposes only. MICROSOFT
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