© 2015 Fair Isaac Corporation. Confidential. This presentation is provided for the recipient only and cannot be reproduced or shared without Fair Isaac Corporation’s express consent. Fraud – Our Next 8 Months At A Glance John Buzzard Product Manager FICO Card Alert Service

2 © 2014 Fair Isaac Corporation. Confidential. Our Present Climate

3 © 2014 Fair Isaac Corporation. Confidential. Brands Under Attack

4 © 2014 Fair Isaac Corporation. Confidential. Apple Pay 17% Yes-we are live. 43% Launching in % Not planning a launch. “Is your financial institution currently participating in Apple Pay?” Source: February 2015 FICO informal poll.

5 © 2014 Fair Isaac Corporation. Confidential. Apple Pay Risk – Best Practices  Require cardholder to opt into Apple Pay (via mobile app or secure online banking).  Ask account-based challenge questions for added security. (last deposit amount, most recent place of travel). In doubt? Call the cardholder’s can be reached number.  Device recognition: Compare the mobile banking device identification to the Apple Pay provisioning request for additional layer of security.  Deny authorizations for payment types you are not currently accepting like EMV, NFC, Apple Pay. Know your Presentation Instrument “PI Codes” to help identify fraud origins.  Leverage push notifications via mobile banking apps to notify/confirm Apple Pay with the cardholder.  Utilize available rules-based technology for entry modes and presentation instrument type codes consistent with mobile payments. NOTE: Be aware of PI codes in the authorization log for Apple Pay.

6 © 2014 Fair Isaac Corporation. Confidential. Card Skimming Trends

7 © 2014 Fair Isaac Corporation. Confidential US PIN COMPROMISE MAP RESUTLING IN ATM FRAUD Blue=FI ATM Light blue=Non FI ATM Red=POS Source: FICO 4/6/15 last update

8 © 2014 Fair Isaac Corporation. Confidential. Predictions – The next 8 months  Counterfeit fraud will continue to flourish as the US gains ground on chip acceptance.  Identifying the “real” customer will become more difficult due to Anthem loss of PII.  Gas dispenser fraud and pump skimming will intensify thru  Customized malware attacks will increase.

9 © 2014 Fair Isaac Corporation. Confidential. Fraud Networking Website