Chinese banks get smarter in combating credit card fraud

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Ping'an Bank's newly announced anti-fraud system can identify fraudulent credit card transactions within 0.2 of a second, making it the fastest of its kind in China, according to the bank.

The system, which was put into use last year, but only formally announced last month, allows the bank to stop credit card fraud the instant it occurs, while many of their competitors react only after the transaction has been made, said Zhang Shen from Ping'an's risk management department.

"Once a card has been stolen it's very difficult to prevent the first fraudulent transaction, because a real-time response requires the bank's anti-fraud system to make precise decisions very quickly," he said.

Statistics from the Ministry of Public Security showed that credit card crime has surged in China, with more than 63,000 cases filed in 2016, accounting for one-third of the country's total financial crime.

An outlet of Ping'an Bank in Dalian, Liaoning Province. /VCG Photo

Hu Yuefei, president of Ping'an Bank, said the company's system conducts round-the-clock surveillance of credit card accounts and identifies abnormal user behavior based on big data analysis within an average response time of no more than 0.2 of a second.

"We can ensure no money is lost from a stolen account," Hu said.

Since the system was activated in January 2016, more than 800 million transactions have been monitored, with 65 million yuan (9.8 million US dollars) in both direct and indirect losses avoided.

The technology is part of the bank's moves to develop smart banking, Hu said, adding that financial technology has become all the more important in improving operation efficiency and service quality as competition between banks gets fiercer.

Ping'an Bank has invested 1.2 billion yuan (180.4 million US dollars) in research and development of financial technology during the first half of the year, up 20 percent year-on-year. Its technical team has increased from 200 to more than 1,800 staff members.

Agricultural Bank of China in Beijing. /VCG Photo

In late September, Agricultural Bank of China (ABC) announced that customers no longer need to insert their bank cards to withdraw money from ATMs at three branches in Jinan, Shandong Province. ATMs will scan the account holders face to access their account.

The technology will help eliminate the risk of copied or fake bank cards, and lower the possibility of cards being damaged or confiscated by ATMs, according to Zhang Baojing from ABC.

"It will enhance the customer experience," he said.

Other banks, such as China Merchants Bank and Construction Bank of China, have also introduced similar technology in their ATMs.

China Merchants Bank in Qingdao, Shandong Province. /VCG Photo

Starting in 2018, ATMs installed in ABC branches in Tianjin Municipality and the provinces of Shaanxi, Hunan and Hubei will be paper-free. Customers can scan the screen with their mobile phone to receive an electronic receipt of the transaction.

Source(s): Xinhua News Agency