Author: Vivekananda J

New IBM LinuxONE system designed for cybersecurity, scalability and AI inferencing for hybrid cloud environments

We are excited to collaborate with IBM as the company unveils its new IBM LinuxONE 4 Express system available globally on Feb. 20, 2024. Powered by IBM’s Telum processor, this new system expands the performance, security and AI capabilities of IBM LinuxONE to small and medium sized businesses and within new data center environments. This can potentially bring Clari5 clients significant cost savings and is designed to remove the guess work for clients when it comes to spinning up workloads quickly and getting started with the platform.

In today’s fast-paced digital payment landscape, fraud has become a major concern, exploiting vulnerabilities in real-time transaction systems. The surge in digital transactions highlights the need for advanced real-time AI to combat this problem. Banks face significant risks during the brief moments of transaction processing, where preventing fraud, ensuring compliance, and maintaining productivity are crucial. Failure to do so can lead to substantial losses to a bank.

Clari5 Enterprise Fraud Management Solution on IBM LinuxONE 4 Express is designed to empower Financial Institutions with Powerful Decisioning Engine for Real–Time fraud Prevention. It is designed to monitor, detect and influence (stop/ hold) transactions, execute compliance and enhance productivity all while delivering at unprecented speed and scalability.

This next-generation LinuxONE 4 Express is meticulously engineered for exceptional throughput, high availability and resiliency, thereby delivering AI inferencing at speed and scale to support Clari5 as we aim to consistently monitor and prevent fraud without disrupting business operations.

Moreover, Clari5 leverages AI/ML models, powered by IBM’s Telum processor, to process large data volumes efficiently. This can reduce false positives and can improve customer onboarding. Together, with Clari5 EFM on IBM LinuxONE 4 Express, banks can analyse vast amount of data in real-time, employ  AI/machine learning and swiftly integrate decisions into every transaction.

Building an integrated hybrid cloud strategy for today and years to come 

According to IBM, when organizations move their products and services online quickly, oftentimes, they are left with a hybrid cloud environment created by default, with siloed stacks that are not conducive to alignment across businesses or the introduction of AI. In a recent IBM IBV survey, 84% of executives responding acknowledged their enterprise struggles in eliminating silo-to-silo handoffs. And 78% of executives answering say that an inadequate

operating model impedes successful adoption of their multicloud platform. To accelerate and scale the impact of data and AI across the enterprise – and ultimately improve business outcomes – IBM predicts that organizations are starting to build a more intentional hybrid cloud.

operating model impedes successful adoption of their multicloud platform.[1] To accelerate and scale the impact of data and AI across the enterprise – and ultimately improve business outcomes – IBM predicts that organizations are starting to build a more intentional hybrid cloud.

IBM brings the power of hybrid cloud and AI with LinuxONE to a simple, easy to use format that fits in many data centers. IBM LinuxONE 4 Express offers an approachable hybrid cloud platform entry point for small to medium sized businesses and startups. For example, IBM LinuxONE 4 Express systems, with GDPS, IBM DS8000 series with HyperSwap and running a Red Hat OpenShift Container Platform environment, are designed to deliver 99.999999% availability.[2]

IBM LinuxONE 4 Express is designed to help clients simplify their IT environments and cut costs by consolidating databases onto a LinuxONE system. Designed to bring significant cost savings for clients over time, clients that move Linux workloads from compared x86 server to an IBM LinuxONE 4 Express can save over 52% on their total cost of ownership over 5 years.[3]

Installing these systems in the data center can help create a new class of use cases, including the enhanced execution of Clari5  Enterprise Fraud Management, supporting smooth operations in a banking environment. Clari5 on IBM LinuxONE 4 Express can offer clients a highly efficient, secure and scalable platform to help businesses accelerate their fraud prevention journey powered by AI.

As a part of the IBM Ecosystem, Clari5 is helping companies unlock the value of their infrastructure investments by implementing the tools and technologies designed to help them succeed in a hybrid cloud world. We are excited to be working closely with the IBM Ecosystem to bring new innovations to our clients.

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[1] IBM IBV Research Insights: Mastering Hybrid Cloud, pg 11

[2] Disclaimer: IBM internal data based on measurements and projections was used in calculating the expected value. Necessary components include IBM LinuxONE Rockhopper 4; IBM z/VM V7.2 systems or above collected in a Single System Image, each running RHOCP 4.10 or above; IBM Operations Manager; GDPS 4.5 for management of data recovery and virtual machine recovery across metro distance systems and storage, including Metro Multi-site workload and GDPS Global; and IBM DS8000 series storage with IBM HyperSwap. A MongoDB v4.2 workload was used. Necessary resiliency technology must be enabled, including z/VM Single System Image clustering, GDPS xDR Proxy for z/VM, and Red Hat OpenShift Data Foundation (ODF) 4.10 for management of local storage devices. Application-induced outages are not included in the above measurements. Other configurations (hardware or software) may provide different availability characteristics.

[3] Disclaimer: Compared IBM LinuxONE 4 Express Model consisting of a CPC drawer and an I/O drawer to support network and external storage with 12 IFLs and 736 GB of memory in 1 frame, versus compared 3 x86 servers with two Xeon Sapphire Rapids Platinum 8444 processors with 32 cores each (2ch/32c) with a total of 384 cores. All Systems are modeled to be running Linux Postgres Enterprise-DB workloads with virtualization and DB tools. Results may vary based on client-specific usage and location. LinuxONE hardware is the expected global price in $USD and discounts. X86 purchase price was included and maintenance costs is from IDC’s Pricing Service: https://www.idc.com/myidc3/products with an aggressive discount. Postgres Enterprise-DB software and tools prices are based on street prices that is discounted from the list price. TCO is calculated over a 5-year horizon. Cost estimates include hardware costs and annual maintenance, Linux OS subscription costs, virtualization software, people cost, and infrastructure (network, energy, space) costs.

Additional information:

• Learn more about Clari5
• View the announcement on IBM Z and LinuxONE Community and sign up
• Learn more about LinuxONE 4 Express

Image courtesy: rawpixel on Freepik

A bank’s risk and compliance leadership are faced with a wide spectrum of challenges when it comes to effective real-time Enterprise Fraud Management, including –

• Delayed detection of frauds

• Unpredictable / dynamic surge in transactions

• Prolonged fraud mitigation cycles

• Longer cycle to engage a fraud system provider and fully operationalize an enterprise-wide system

• Inability to keep pace with newer, ‘innovative’ frauds due to slow software update cycles

• Limited customer / device / behaviour profiles

• Fraud detection / management system availability

In an era where digital transactions have become the norm, ensuring the security of financial systems has become a top priority for banks worldwide. The rising threat of fraudulent activities poses significant challenges to the banking industry. To combat this menace effectively, banks must adopt innovative solutions that not only protect their customers’ financial interests but also streamline their operations. One promising direction is adopting an Enterprise Fraud Management (EFM) system in Software-as-a-Service (SaaS) mode.

Let’s explore why banks should embrace this progressive technology to fortify their anti-fraud defences and stay ahead of fraudsters.

1. Enhanced Fraud Detection
The foremost benefit of implementing an EFM solution in SaaS mode is its ability to significantly enhance fraud detection capabilities. Conventional fraud management systems often rely on rule-based approaches, which can be rigid and unable to keep up with evolving fraud tactics. However, an EFM system employs advanced analytics and machine learning algorithms to detect patterns, anomalies, and behavioural changes in real-time. By analysing vast amounts of data from multiple sources, including transactions, customer profiles, and external data feeds, an EFM solution can accurately identify potentially fraudulent activities and trigger alerts, allowing banks to take swift preventive measures.

2. Scalability and Flexibility
On-prem solutions typically plan for their best-guess peak load while utilizing only 40-50% of the work load. A sudden surge in transaction volumes (attributed to various factors) leads to tactical, reactive compromises which results in either delayed fraud detection coupled with the risk of losses to the fraud or a plunge in customer experience which impacts the bank’s brand value.

The SaaS model offers banks unparalleled scalability and flexibility when it comes to deploying an EFM solution. Rather than investing heavily in hardware infrastructure and software licenses, banks can leverage the cloud-based nature of SaaS to scale their fraud management capabilities as per their requirements. With a SaaS-based EFM system, banks can seamlessly handle increasing transaction volumes and adapt to changing fraud patterns without compromising system performance. Moreover, the flexibility of the SaaS model allows for easy integration with existing banking systems, reducing the implementation time and cost involved in deploying a new solution.

3. Real-time Monitoring and Response
Fraudsters are constantly evolving their techniques, necessitating a proactive and real-time response from banks. An EFM solution in SaaS mode empowers banks to monitor transactions and detect potential fraud in real-time. By leveraging advanced algorithms and machine learning, banks can identify suspicious activities as they occur, triggering immediate alerts to the appropriate teams for investigation and response. The ability to take swift action against fraudulent transactions can significantly reduce the financial losses incurred by banks and protect the interests of their customers.

4. Comprehensive Risk Assessment
An EFM solution provides banks with a holistic view of risk by aggregating and analysing data from multiple sources. By combining transactional data, customer behaviour, device information, and external data feeds, banks can gain valuable insights into potential vulnerabilities and risk factors. This comprehensive risk assessment allows banks to implement proactive measures and enhance their fraud prevention strategies. Moreover, the continuous monitoring and analysis of data enables banks to adapt their risk models and rules in real-time, ensuring they stay ahead of emerging fraud trends.

5. Cost-effectiveness and Operational Efficiency
Adopting an EFM solution in SaaS mode offers banks significant cost savings and operational efficiencies. The cloud-based infrastructure eliminates the need for large upfront investments in hardware and software licenses while enhancing the capability to meet sudden or planned surge of transaction volumes. Additionally, the SaaS model provides automatic software updates, reducing the burden on banks’ IT departments. By outsourcing infrastructure management and maintenance to the EFM solution provider, banks can focus their resources on core banking activities. The scalability and flexibility of the SaaS model also enables banks to optimize resource allocation and improve operational efficiency.

6. Collaboration and Knowledge Sharing
Fraud is a global problem and banks can benefit greatly from collaborative efforts and knowledge sharing. A SaaS-based EFM solution facilitates information sharing and collaboration among banks. By anonymizing and aggregating data across multiple banks, the solution provider can identify fraud patterns and trends that may not be evident within a single institution. Banks can benefit from collective intelligence, gaining insights into new fraud techniques and preventive measures. This collaborative approach can significantly enhance the effectiveness of fraud management and help banks stay ahead of fraudsters.

As the threat of fraud continues to evolve in an age of fast payments, banks must embrace innovative solutions to safeguard their customers’ financial interests. The adoption of an EFM solution in SaaS mode offers banks enhanced fraud detection capabilities, scalability, flexibility, real-time monitoring, comprehensive risk assessment, cost-effectiveness and collaborative knowledge sharing. By leveraging advanced analytics and machine learning algorithms, banks can detect and prevent fraud in real-time, reducing financial losses and protecting their reputation. With the ever-increasing emphasis on secure financial transactions, the time has come to invest in an EFM solution in SaaS mode to stay ahead in the battle against fraud.