Neteller had to change the rules

Many internet businesses never meet their customers and so the bonds of trust that oil the wheels of commerce must be built up in other ways.

Neteller, an online payments company, faces this problem, with customers scattered around the globe that its officers cannot meet to verify their identities.

The company receives around $3.4m per day on behalf of its 2.5m business and consumer customers. It also recruits more than 3,000 new customers every day. Ensuring that the transactions and the new customers are genuine is vital and this is where technology helps.

When identifying a new client, Neteller draws data from up to 16,000 sources. It then runs a set of rules over the data to give a probability as to that client’s identity. The rules are also used on the thousands of daily transactions.

But the set of rules that Neteller was using to interrogate data had been written into various parts of the firm’s software by technical staff, which made it difficult to create a paper-trail. “For us as a regulated business, it was difficult to export and document the rules,” says Andy Scott, Neteller’s chief security officer.

It also had to be possible for the rules to be changed by business experts who understand the ever-shifting risks from criminals.

Neteller considered the options for months before deciding on business rules software from Corticon. “It best met our needs for allowing non-technical business users to manage our business rules in a technical environment,” says Mr Scott.

The software also enables the rules themselves and the reasons for each decision to be documented. This paperwork can then be supplied to auditors and regulators.

Corticon’s technology also allows more sophisticated and accurate decisions to be taken about customers. For example, in the US there is a high instance of identity theft, whereas in eastern Europe credit card fraud is prevalent, and the software allows such factors to be weighed. The new rules can also look at the frequency and size of transactions for each customer, for example, and detect unusual patterns that may indicate fraud.

Neteller is now able to manage its business risks better. “We are a risk-based organisation,” says Mr Scott. “We our achieve our profit on the back of good risk decisions.”

And Neteller can serve its customers better. One way it has done this is by reducing the high number of genuine customers wrongly barred by the rules.

Now armed with new software that enables the company to make more complex and sophisticated decisions, Neteller is looking to expand: “We can do business where we’ve not been able to do it before,” says Mr Scott.