What do risk analytic engines do?
They try to sniff out fraud based on the pattern of actions a consumer engages in online. This idea has been borrowed from the credit card industry, which has long used transaction analysis to detect fraud. For example, suppose I am an online banking customer of a big bank, and suppose I normally engage in simple activities like checking my account balance or setting up online bill payments for routine amounts. Then suddenly one day $3 million passes through my account on the way to North Korea. A risk analytic engine will flag this as abnormal. Q: Do these risk analytic engines work in real time? A: Originally you mostly had passive risk analysis that operated after the fact. You would have an engine sitting there combing automatically through a pile of transaction records, and when it flags something a live person in the fraud department will call you up and ask if you really meant to transfer $3 million to Kim Jong-ils cousin. This approach works for most transactions at financial i
