July 20, 2012, 11:28 PM — That's why, when I found out about the HP/ReD solution for Pulse, which is one of the largest card transaction handlers, I got interested. Using ReD and HP technology, Pulse implements real-time fraud protection.
Prior to this, folks could only approach near-real-time, which means the bank finds out the transaction is fraudulent at about the time the criminals drive away in the car you bought them. While this may prevent them from buying a nice sports car to go along with the SUV, you are still out that first purchase.
Real-time means the criminals don't screw you over at all. To make that happen, the solution didn't just need to be fast, it needed to be cheap. That's the appliance computing part of this story.
For Banks, Fighting Card Fraud Not Worth the Cost
Until recently, most banks accepted credit and ATM card fraud as a cost of doing business, largely because the cost of prevention appeared to them to exceed the benefit. Realize that much of the cost for fraud, particularly in the case of ATM fraud, is born by the customer. In a case of broad fraud, it can cost up to 9 months of near full-time work and around $250,000 to fix you identity and credit scores-and you may never again get the high rating you once had.
Commentary: ATM Fraud Refunds May Not Come Quickly-If At All
For a solution to work, then, it has to be very inexpensive. Since banks don't want false positives-after all, they make money on the transaction and don't want you using another card-they won't accept a system that so aggressively blocks transactions that legitimate ones are accidently blocked as well.
Pulse picked the ReD platform because it came closest to meeting its fraud prevention needs. However, to meet both speed and cost requirements, it needed to reside on a far simpler baseline of technology.
HP's Appliance Allowed for Growth Where Oracle's Didn't
With HP, IBM and Oracle already in house, Pulse felt an appliance from one of these vendors would be a better approach. Oracle's Exadata was knocked out early, and the company wasn't asked to bid-Pulse felt it simply wasnt competitive. Even though the company use IBM System Z for transaction processing, the team implementing this solution didn't know it well enough and believed it wasn't tuned for this particular use. (It is generally wise to pick a platform that the folks who are implementing the solution know, since learning a new system or having to replace key staff prior to a major deployment can be catastrophic.)