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The Data Warehouse Institute awards ARC’s Fraud Prevention Solutions

ARC wins 2009 TDWI Best Practices Award for predictive analytics

Airlines Reporting Corporation (ARC) has earned the 2009 Best Practices Award from The Data Warehousing Institute (TDWI). The annual awards recognize companies with innovative business intelligence and data warehousing projects.

ARC was recognized for their exceptional achievements in the development and execution of data warehouse-driven business practices generating significant business value in providing Fraud Prevention Analytical Services utilizing Teradata with advanced, predictive analytics.

ARC has been providing fraud solutions to the airline and travel industry for over 10 years, continually adapting approaches, detection methods and reusability of solutions. The process has grown from manually intensive reviews of paper documents for reactive fraud prevention solutions to the development of highly proactive, adaptable, analytical models supported by a highly available Teradata infrastructure.

Today, utilizing the ARC industry data warehouse and advanced business intelligence (BI) solutions, data mining is completed in hours and risk analysis models create proactive solutions with fewer resources. Advanced BI solutions were not possible before ARC’s implementation of its Teradata data warehouse in 2002. ARC’s mission to mitigate fraud losses for its stakeholders has evolved using SQL tools for basic reporting and the development of advanced, complex, predictive analytical models. These models provide insight into behavior patterns and create alerts when these patterns change to a high risk paradigm.  

"ARC can now detect fraudulent ticketing within hours as compared to weeks. Our unique position within the travel industry allows us to detect and prevent fraud perpetrated against airlines and travel agents by monitoring the financial transactions originating from across 17,000+ travel agency locations. Fulfilling the goal of curtailing fraud involves multiple approaches, including predictive modeling of real-time data, continual monitoring of ticketing anomalies, and scrubbing data for known fraudulent schemes. We are now able to provide immediate information to our stakeholders for proactive and reactive measures against these schemes while creating and promoting best practices for the industry," said Dottie Hogan, ARC’s director of risk management.

ARC’s approach to fraud solutions and revenue integrity provides the agility to quickly respond to changes in the fraud environment. Able to respond in near real time to new scenarios and identified trends, ARC is rapidly adapting and adjusting its predictive models to meet the new challenges. By evaluating consistent ‘root causes,’ ARC is able to drive immediate refinements to predictive models.

Through deep data mining and predictive models (using the two billion+ travel transactions in the ARC data warehouse), and in conjunction with special fraud monitoring tools and reports, ARC is able to alert both travel agencies and airlines of potentially fraudulent transactions in ample time to cancel reservations or intercept passengers in time for additional fare collection.

"By using Teradata technology and advanced analytical techniques, we reduce risk exposure by detecting harmful events before they affect business or the industry as a whole with the consistent application of mathematical models created to more accurately score transactions. By identification of abnormalities – the outliers – showing when sudden, dramatic changes in activity, dollar amounts, or frequency occur, we are often able to catch the fraudsters ‘in the act’," said Becky Briggs, senior manager and data steward of ARC data and analytics business line.

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