FICO and the National Bureau of Credit Histories (NBKI), have made available the FICO Application Fraud Score to Russian lenders.

The score, the first for the Russian market according to FICO, detects fraudulent credit applications, allowing Russian lenders to stop fraud before an account is booked.

Examining credit application data and credit history at NBKI, a leading Russian credit bureau, the score ranks the probability the application involves first-party fraud.

Lenders will focus fraud investigations on new accounts that are most likely to be fraudulent, increasing the efficiency of their resources.

Alexander Vikulin, chief executive of NBKI, said: "By purchasing the FICO Application Fraud Score through NBKI when pulling a credit report, lenders will get a quick snapshot of fraud risk."

"This early warning will enable a lender to perform additional verification on the application if warranted prior to booking the account and releasing the funds, thereby potentially avoiding losses on the account."

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Cards International spoke to Elena Koneva, FICO’s senior associate partner for scores and analysis, who said the Russian credit market is not as well developed as that in the US or the UK, and that the NBKI database gave the FICO score a wider scope.

"We are not focused on one type of fraud in one region of Russia – the database that NBKI has allowed us to cover all of the country and then tries to catch all types of fraud," she said.

"It is a unique model, no-one has ever proposed this model in Russia. All banks are right now implementing it, trying it and assessing it.

"I think that in around one or two months we will have the first results on the success stories."

She added: "We are going to redevelop the model twice in a year to be able to catch all new types of fraud behaviour."

The growth of the Russian credit market has been echoed by the growth of credit fraud, which has more than tripled between 2006 and 2011.

"Identity fraud is huge and people are trying it everywhere", said Martin Warwick, FICO’s principal fraud consultant for the EMEA region.

"If somebody walks through the door and is not willing to make any payments or only one or two payments and then disappears – then you shouldn’t be doing business with them.

"Where you have got growth, like a Russian market where they are trying to get people on board to get them to have loans and everything else – those are the ones that could really bite in terms of making big losses."

FICO began its partnership with NBKI, which works with around 800 banks in Russia, in 2005.

FICO’s enterprise fraud management solutions include FICO Falcon Fraud Manager, which protects 2.5 bn cards worldwide.

The company has also just released FICO Application Fraud Manager, which will identify first party and third party fraud in credit applications.

"We have been developing credit scoring models for the Russian market for 10 years, and have been building fraud models worldwide since 1992," said Jim Wehmann, executive vice president of Scores for FICO.

"Applying our deep domain expertise to NBKI’s robust data, we produced a reliable FICO Application Fraud Score custom-built for the Russian market."

Over 50% of top Russian banks use FICO Scores delivered by NBKI, which now delivers over a million FICO Scores a month.

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