Briefs

Businessweek reports New Software Aims to Cut Terrorists' Cash

Winning the war on terrorism will involve more than military
actions. As Secretary of State Colin L. Powell noted, the challenge
for the civilized world will be "going after, and dealing with, the
sources of support that they have." Some of their financing comes from
money laundered illegally in the U.S.--part of an estimated $500
billion in laundered funds that pass through American banks every
year.

HNC Software wants to stem that tide. The San Diego company has
developed a new variation of Falcon, its artificial intelligence (AI)
program for spotting credit-card fraud. Falcon is now used by 80% of
the top credit-card issuing banks--and has slashed fraud rates by more
than half. But the new technology had to be even smarter, says Walter
Lee, vice-president of risk management. "With credit cards, you almost
always know for sure when fraud has occurred," he explains, and the
software can study each incident to determine the crook's modus
operandi and work out patterns to watch for. But with money
laundering, some warning-sign patterns can't be nailed down "because
some people never get caught."

Lee says the new program uses several AI techniques to monitor bank
transactions, looking for such clues as "lots and lots of small
deposits, or lots of small international transfers from unusual
places, like Caribbean banks."  Another red flag: cash deposits with
numerous $100 bills from laundromats, delis, or from other small
businesses where big bills are normally rare. When the software gets
suspicious, it calls in the bank's sleuths.  By Otis Port

See http://www.businessweek.com/magazine/content/01_40/c3751039.htm