MASTERCARD ADVISORS (MCA) PUBLIC SECTOR BIG DATA ANALYTICS & LESSONS LEARNED FROM THE PRIVATE SECTOR

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1 MASTERCARD ADVISORS (MCA) PUBLIC SECTOR BIG DATA ANALYTICS & LESSONS LEARNED FROM THE PRIVATE SECTOR AUGUST 24,

2 Table Contents 2 Big Data Overview: What does it mean for State Agencies? MasterCard Advisors Approach Case Study

3 Big Data Overview 3

4 Big Data by the Numbers 4 Number of card transactions in the US each year: 122 BILLION Every day we create 2.5 quintillion (10 18 ) bytes of data - so much that 90 percent of the world's data today has been created in the last two years alone AT&T collects 30 billion data points per hour in order to measure network quality that it feeds back into improving customer experience. WSJ, July 29, 2014 There is a big data revolution, says Weatherhead University Professor Gary King. But it is not the quantity of data that is revolutionary. The big data revolution is that now we can do something with the data. - Harvard Magazine, July MasterCard - No reproduction or sharing without express written consent of MasterCard

order to measure network quality that it feeds back into improving customer experience.

5 What does Big Data mean for State Agencies? 5 Survey Results: Agencies see the importance of big data but often face challenges when implementing data-driven projects 72% of respondents cite Big Data as important to their agency However, 50% of agencies have no plans to introduce a big data platform within a year Importance of Data Big Data Platform Rollout 42% 50% 30% 22% 5% 1% 22% 8% 10% 10% Extremely Important Important Neither Not Important Extremely Not Important No plans to introduce Piloting/experimenting Exploring ways to a platform in the next 12 months a platform move beyond our pilot phase Deploying a big data environment to support the agency Getting value and expanding our current big data environment

agency However, 50% of agencies have no plans to introduce a big data platform within a year Importance of Data Big Data Platform Rollout 42% 50% 30% 22% 5% 1% 22% 8% 10% 10%

6 MasterCard Advisors Approach: Develop Solutions that Leverage Behavioral Data to Benefit our Customers 6 Transaction Data is Behavioral Data Comes in large volumes and is updated frequently Presents facts not opinions Descriptive and specific about priorities and preferences Predictor of future behavior and revenue opportunities

and is updated frequently Presents facts not opinions Descriptive and specific

7 Case Study 7 A large regional U.S. issuer lacked a cohesive fraud strategy and used limited data/analytics in their decision making process Baseline Data Total Transactions Total Spend Fraud Transactions Gross Fraud 600M+ $25B+ 500,000+ ~$30M Operational Model Technology Fraud Strategy Fraud Operations Fraud Analytics & MIS Limited use of analytics or data driven decisions Operational volumes driven by staffing capacity rather than profitability or mitigation targets Little to no analytical guidance to operators Limited access to critical data which directly correlates to increased fraud levels Data architecture and lack of analytical tools are preventing robust analysis to determine and address fraudulent activity Limited understanding of portfolio impact of existing Fraud Prevention strategies Limited and inadequate analysis of existing fraud rules to determine ongoing effectiveness Insufficient tools and data to monitor effectiveness of fraud decision making processes Over abundance of manual processes significantly impacts the ability to manage queue volume Little to no operational analytics to enable data driven decisions at any level Over-abundance of unnecessary and manually generated reporting, which reduces productivity of department

issuer lacked a cohesive fraud strategy and used limited data/analytics in their decision making process Baseline Data Total Transactions Total Spend Fraud Transactions Gross Fraud 600M+ $25B+

Fraud Alert Management The Power of an Integrated Approach. Eric Kraus, Sr. Director Fraud Product Management

Fraud Alert Management The Power of an Integrated Approach Eric Kraus, Sr. Director Fraud Product Management FIS Fraud Management Who We Are FIS Fraud Management 7,600+ financial institutions served 47