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EMV chip card technology for added protection
COMBAT EBT FRAUD
Explore client stories
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contents
A win for all
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A call to upgrade
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EMV is the new global standard
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Protection against card-present fraud
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EBT cards – An easy target
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Card skimming: A costly fraud technique
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An urgent need for change
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INSURANCE RISK, COVERED
It’s time to act
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Read the full stories
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Partnering with industry leaders to build talent
Get insurance risk covered with FIS
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AN URGENT NEED FOR CHANGE
Did you know?
Maneesh Sharma VP, Managed Cloud Services, FIS
FIS Insurance Risk Suite (formerly Prophet) is APAC’s most used actuarial modeling and risk management system.
But as the modeling environment gets more complex, models become more costly to build and run.
“Today, cloud is much more than a mandate for operating in a digital world—it’s where breakthrough innovation and transformation take place.”
To deliver on all fronts, you need peak performance without driving up costs.
As financial institutions continue to make security a priority, a growing number of fraudsters are attacking a less secure target: public assistance . Electronic Benefits Transfer (EBT) cards play a crucial role in providing essential financial assistance to those receiving public assistance for the purchase of food and other necessities. However, these benefits are at risk due to the increasing prevalence of card skimming fraud, with painful impacts for both recipients and states. The security measures needed to protect EBT funds already exist, and they’re the industry standard for the U.S. and globally. States can take action now to prevent card-present fraud by adopting contactless EMV (Europay, Mastercard® and Visa®) chip card technology – enhancing security and safeguarding benefit recipients from fraudulent activities. In this e-book, we’ll explore the nationwide surge in EBT fraud, EMV’s deterrence against fraud and how agencies can easily transition and enable a more secure recipient experience.
Insurance companies are more aware than ever of the wealth of information at their disposal. Their ability to extract value from data using advanced analytics has become critical to competitive advantage.
For actuaries, the pressure is on to gain greater insights from big data and rapidly transform modeling results into business intelligence.
1,500+ insurance companies in 80 countries use Insurance Risk Suite, including 80% of the world’s largest insurers.
insurance companies in countries use Insurance Risk Suite, including of the world’s largest insurers.
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FIS® Insurance Risk Suite (formerly Prophet)
In March 2023, the United States Department of Agriculture (USDA) announced that states can adopt chip cards without approval or waivers, while the agency continues to explore chip card technology.
Sources: EBT card fraud makes smart chips essential, Sen. Wyden says | kgw.com
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Jaco Grobbelaar Chief of Finance and Deputy CFO, Partners Life
The FIS IFRS 17 solution does everything, from sourcing data and calculating results to generating GL postings and disclosures. We’re delighted to continue our partnership with FIS and are confident the solution will meet all our business and compliance needs.
CARD SKIMMING: A COSTLY FRAUD TECHNIQUE
Ideally, you should start your digital transformation from the ground up – at the application level.
Credit card skimming has been around for decades and continues to be a threat. The Federal Bureau of Investigation estimates that card skimming costs individuals and organizations around $1 billion annually — and there are no signs of it slowing down. In fact, in the first half of 2022, FICO reported a year-over-year increase of 759%. Skimming occurs when a card reader is illegally installed on ATMs or point-of-sale terminals to capture data or record a cardholder’s personal identification number (PIN). The stolen data can be used to make unauthorized purchases or create counterfeit cards, putting cardholders at significant risk. Cards that employ magnetic stripe technology are more vulnerable to card skimming. A majority of states still use this less secure technology for EBT cards, putting EBT recipients at a higher risk of being impacted by card skimming.
Mid-Atlantic
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45% of companies fully achieving their outcomes are using managed cloud services to a great degree.
Three big moves that can decide a financial institution’s future in the cloud, 2022
McKinsey
Fortune 500 financial institutions alone could generate as much as $60 billion to $80 billion in run-rate EBITDA in 2030 by making the most of the cost-optimization levers and business use cases unlocked by cloud.
The race to the cloud: Reaching the inflection point to long sought value, 2023
Accenture
FIS accounting and reporting technology for IFRS 17 helps AmMetLife develop financial statements and reports, build budgets and forecasts, and track allocations.
IFRS 17 requires insurers to value their insurance contracts on current fulfillment value, not book value. Industry experts predicted this would raise debt balances for Korean insurers to unprecedented levels.
CARD SKIMMING IS A NATIONWIDE ISSUE
In October 2023, this Mid-Atlantic state reported an increase in card skimming incidents. Since January 2022, there have been more than 22,000 claims of SNAP skimming, totalling $17 million.
EBT fraud in this Northeastern state cost $172,000 as of March 2023. Accounts linked to 321 EBT recipients have been hacked since October 2022, with an average loss of $538 per cardholder.
Northeast
Public benefits theft costs this Western state an average of $10 million monthly. Between July 2021 and March 2023, the state has seen a 14,000%+ increase in EBT theft.
West
This Southeastern state reported EBT fraud totalling $1.34 million for the first half of 2023 — a fourfold increase since the previous year.
Southeast
Source: 1 U.S. Card Skimming Fraud Grows to 700%+ in First Half of 2022 | FICO.com
Sources: U.S. Card Skimming Fraud Grows to 700%+ in First Half of 2022 | FICO.com EBT card-skimming scams on the rise in New York: officials On Your Dime: EBT fraud costs Rhode Island $172,000 California missed chances to stop EBT theft. It’s lost tens of millions of taxpayer dollars since Government benefits fraud continues to increase concern for the most vulnerable
Here are some recent headlines:
EBT CARDS – AN EASY TARGET
Anna Leonita, CEO, Avrist Assurance
Partnering with FIS at this stage will stand us in good stead for implementing IFRS 17 on time. We look forward to working with the team on improving our modeling capabilities.
For many firms, some applications may be harder to modernize for the cloud than others. Again, automation is the answer.
It’s not difficult to see why fraudsters have pounced on EBT cards. In most traditional payment card transactions, there are usually several parties that have a financial interest in minimizing fraud and fraud losses, including the bank that issued the card, the card network and the merchant. But that infrastructure doesn’t apply to state EBT programs. The majority of EBT cards have limited fraud controls, making them a likelier target.
But beyond lockdown conditions, there are more reasons than ever to run your organization’s most powerful systems in the cloud.
In 2020, unprecedented global circumstances have shown us all the benefits of hosted IT for business continuity and remote working.
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Over 40% of businesses struggle to understand the dependencies and architecture of existing apps before cloud migration.
Cloud Workload Analysis: How to Determine the Configuration, 2022
PhoenixNAP
Haywood Talcove, CEO, LexisNexis Risk Solutions Government Business
It doesn't make any sense that the SNAP program, which spends $157 billion annually, is using a glorified hotel room key to provide benefits to the food insecure.
Insurance Risk and Accounting Suite is an integrated combination of Insurance Risk Suite and FIS Insurance Accounting Suite (formerly EAS), which allows Ocean Life to optimize automation, governance and control throughout the IFRS 17 reporting life cycle.
By performing IFRS 17 calculations within an actuarial system, TAL gains natural advantages for business planning and regulatory reporting – while also improving connectivity and data flow between risk and finance.
Pathmanathan Perumal, Financial Controller, AmMetLife Takaful
We are delighted to benefit from FIS’ global expertise in leading IFRS 17 projects. With FIS, we can greatly augment our risk management framework for compliance, while reducing project risk, potential errors and operational burden.
Sources: 1 True Cost of Fraud Study for SNAP | LexisNexis.com
“For every dollar of benefits lost through fraud, the Supplemental Nutrition Assistance Program (SNAP) spends approximately $3.72 on detection, investigation , reporting and administrative tasks.”
Jesselyn Ocampo, Chief Actuary, Insular Life
With FIS providing and managing the modeling hardware, software and control framework as a one-stop service, we can focus on growing our core business while saving money.
PROTECTION AGAINST CARD-PRESENT FRAUD
States can reduce card-present fraud by adopting contactless EMV chip cards, already widely used in the U.S. and around the world. EMV chip or “smart” cards are credit, debit or prepaid cards that have an embedded microchip. The embedded security chip holds encrypted data, making the technology extremely difficult to duplicate. The stored transaction codes are dynamic, meaning they change and are never used twice, which keeps the data from being compromised. Even if a hacker manages to steal the authentication code, it’s useless for future transactions and makes duplicating cards to commit counterfeit fraud nearly impossible. EMV was created to combat mounting losses related to the use of stolen and counterfeit credit cards and is now the global standard for card security. EMV chip cards can also be used as a contactless payment method. Using near field communication (NFC), the enabled card may be tapped, waved or held in close proximity to a point of sale (POS) terminal to complete the transaction, avoiding skimming devices entirely.
Nearly 11 billion EMV cards have been deployed worldwide, and nearly 1 billion of those cards were added in 2020 alone.
Through the managed cloud service, FIS hosts and manages the Insurance Risk Suite application and its supporting hardware in the public cloud, backed by high-quality service management and rigorous security standards.
Sumit Behl, Group Chief Financial Officer, Singlife with Aviva
As a digital innovator, we are delighted to partner with FIS on the digitization of our actuarial, reconciliation and reinsurance operations. We look forward to the extra power and efficiency that the solutions will bring to the business.
Between 2015 and 2019, chip card technology reduced card-present counterfeit payment fraud losses by 87% among merchants who upgraded to EMV.
Sources: 1 10 Billion and Counting: What the Latest EMV® ChipData Means for Global Payments | EMVCo.com 2 Visa EMV Chip Cards Help Reduce Counterfeit Fraud by 87 Percent | USA.Visa.com
EMV IS THE NEW GLOBAL STANDARD
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Financial institutions face major modernization challenges as they often maintain:
The U.S. began its migration to EMV in 2014-2015. Currently, the U.S. has more than 1.4 billion EMV cards in circulation, with 89% of card-present transactions involving EMV chip cards. Visa and Mastercard's EMV liability shift in 2015 – which placed the liability for fraudulent charges onto the party which did not have more secure EMV technology enabled – has driven NFC contactless capabilities in almost all new POS devices in the U.S. Merchants can easily enable contactless EMV acceptance through a software update to their devices. Additionally, contactless chip cards offer EBT cardholders a convenient, fast and frictionless POS experience. By simply tapping the card at a contactless-enabled terminal, the transaction is completed in a second.
With FIS managed cloud service providing hosting, support and upgrades of software as a single service, AIA New Zealand no longer has to maintain its own hardware for the purpose of using Insurance Risk Suite.
Shinhan Life acquired large South Korean insurer Orange Life in 2019. Insurance Risk Suite has played a key role in bringing together the two firms’ actuarial operations and preparing them for IFRS 17 compliance.
Ragil Setyadi, Head of Technical and Actuarial Division, Jamkrindo
Insurance Risk Suite is a well-integrated, complete solution for actuarial modeling, data management and reporting that’s indispensable to not only the insurance industry but also the guarantee industry. Now our actuarial team can work more efficiently.
Ankur Saraf, Appointed Actuary, Tata AIA Life Insurance
With these new [data management] solutions in place to handle actuarial results, Tata AIA is now a step closer toward seamless implementation of IFRS 17.
of U.S. card-present transactions are EMV chip.
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of total cards and
of total terminals deployed are based on the EMV standards.
Sources: 1 EMV Compliance in the U.S. | Capgemini.com 2 Worldwide EMV® Deployment Statistics | EMVCo.com 3 Chip Technology Helps Reduce Counterfeit Fraud by 76% | USA.Visa.com
Mike Kirby Head of Managed Risk and Cybersecurity Services, FIS
Through managed cloud and cybersecurity services, organizations of all types can benefit from the same strictly regulated levels of security as financial institutions.
A CALL TO UPGRADE
As EBT fraud spikes, benefit recipients, industry experts and government officials are calling for a switch to more robust, secure chip technology. Several states that have been the target of EBT card fraud are working alongside the USDA to identify options to further enhance the security of EBT cards. The Department of Agriculture’s Food and Nutrition Service (FNS) is providing technical support to SNAP state agencies exploring and implementing chip-enabled cards. The USDA says it will work with any state that wants to switch EBT cards from strip to chip technology.
Hand every aspect of complex modeling technology to an expert provider and you'll reep the benefits:
FNS awarded nearly $3.1 million in SNAP Fraud Framework Implementation grants to five states – Colorado, Michigan, Mississippi, Texas and Wisconsin – to fund new projects to improve recipient fraud prevention, detection and investigation efforts. Three of these grants focus on the prevention of card skimming by developing media campaigns to educate recipients about the security of their EBT cards and implementing new optional EBT card features.
Ganesh Prakash, Head of Actuarial Services and Appointed Actuary, Takaful IKHLAS Family
As a growing insurance company, we needed complete confidence that we would…continue to deliver on any further reporting requirements. With its expertise, experience and global track record, we trust FIS to help us implement a fast, effective and future-proof solution.
Bonny Fu, Partner, EY
As Insurance Risk Suite becomes the mainstream software of choice for actuarial modeling and implementing IFRS 17, we’ve seen its advanced capabilities meet the insurance industry’s demand for advanced computing performance and data flow.
Sources: 1 USDA and States Achieve Nationwide Card Skimming Safeguards for SNAP Participants | FNS.USDA.gov
A WIN FOR ALL
Iwan Pasila CEO, Mandiri Inhealth
As well as giving us a much faster valuation system, FIS has helped us minimize manual errors and improve governance of the end-to-end process.
While switching to EMV chip cards is a major initiative, this more secure measure has advantages across the ecosystem.
Lu Wan Chun Chief Actuary, CMG Renhe Life Insurance
With Insurance Risk Suite, we get seamless integration between the actuarial modeling, data management and accounting components, which considerably reduces pressure on our resources and operations. Such an open, efficient and well-integrated solution is indispensable to the insurance industry.
Frankie Nip Chief Actuary, Well Link Life
The entire purchase process was transparent and clear, and the implementation of the software was very easy and well supported by FIS.
The results that Insurance Risk Suite generated for Well Link Life Insurance matched the firm’s own manual calculations very closely, so migration to the new solution was seamless.
Frankie Nip, Chief Actuary, Well Link Life
Sheila Natadiningrat, CFO, BCA Life
• Improved security and reduced risk of fraud • Faster and more convenient payment process at participating merchants and ATMs • Access to additional payment options, including online and mobile payment platforms • Improved accessibility for individuals with limited mobility or disabilities
EBT Cardholders
• Enhanced program integrity and reduced EBT fraud or misuse • Streamlined distribution of benefits and reduced administrative costs • Improved data collection and monitoring capabilities for program oversight • Increased compliance with federal regulations and standards for EBT payment systems • FNS is an agency under the USDA so saying both is repetitive
States & FNS
More than 4,000 clients in the government, financial, retail and healthcare sectors rely on FIS® for EMV chip card expertise.
For EMV expertise, FIS is here to help.
EBT fraud is hitting families in need harder than ever. States need to act now to get ahead of fraud and protect their most vulnerable residents.
IT’S TIME TO ACT
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About FIS
FIS is a financial technology company providing solutions to financial institutions, businesses, and developers. We unlock financial technology to the world across the money lifecycle underpinning the world’s financial system. Our people are dedicated to advancing the way the world pays, banks and invests, by helping our clients to confidently run, grow, and protect their businesses. Our expertise comes from decades of experience helping financial institutions and businesses of all sizes adapt to meet the needs of their customers by harnessing where reliability meets innovation in financial technology. Headquartered in Jacksonville, Florida, FIS is a member of the Fortune 500® and the Standard & Poor’s 500® Index. To learn more, visit FISglobal.com. Follow FIS on LinkedIn, Facebook and X.
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