Discover Financial Services’ DFS business within the Payment Services segment, PULSE, expanded its ties with the global analytics software provider FICO. The recent move will enable the deployment of the Falcon Fraud Manager model of FICO across PULSE’s extensive network of debit card issuers.
The advanced model has the capability to segregate between card-not-present transactions and card-present transactions and subsequently, boost the effectiveness in detecting fraudulent transactions in e-commerce and other card-not-present payments.
Therefore, the ulterior motive of the latest partnership expansion remains to provide cutting-edge fraud-detection technology, which might minimize risk exposure and subsequently, losses suffered by financial institutions, merchants and consumers across the globe in case of frauds.
In addition to complementing the mutual aim, the recent move is likely to enhance the individual capabilities of the partners as well. The PULSE business will get an opportunity to bolster its fraud mitigation solutions portfolio with the help of FICO’s Falcon Fraud Manager model and provide relief to its debit stakeholders. Meanwhile, FICO’s model will benefit from the fraud data obtained from the 9,000 financial institution participants of the PULSE network.
The ongoing digitization across every sphere of life has encouraged more consumers to go digital. While digitization does provide comfort and ease, the trend to go digital has led to a rise in cybercrimes. Online frauds often result in the compromise of payments received by organizations and the breach of customer’s confidential data. Thereby, getting equipped with advanced fraud-detection and blocking capabilities will be of great help to PULSE to monitor and counter evolving security risks, which seems to be of dire need.
The facts revealed by the 2023 PULSE Debit Issuer Study also highlights the timeliness of the alliance expansion between PULSE and FICO. The study affirmed the intensified focus that debit issuers put on fraud-prevention and mitigation effort and 76% of survey respondents stated they had undertaken initiatives to upgrade fraud models in 2022.
Higher revenues are likely to flow to PULSE from the delivery of enhanced debit card fraud detection and risk mitigation services, which will ultimately benefit the performance of its parent company, Discover Financial. DFS leverages its efficient payment solutions portfolio for penetrating different sectors with the comfort and ease of digitization.
Shares of Discover Financial have gained 8.9% in the past three months compared with the industry’s 21.2% growth. DFS currently carries a Zacks Rank #3 (Hold).
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks in the Finance space are Fidus Investment Corporation FDUS, Invesco Mortgage Capital Inc. IVR and New Mountain Finance Corporation NMFC. Fidus Investment sports a Zacks Rank #1 (Strong Buy), and Invesco Mortgage and New Mountain Finance carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Fidus Investment’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 9.52%. The Zacks Consensus Estimate for FDUS’s 2023 earnings suggests an improvement of 30.3%, while the same for revenues suggests growth of 35.4% from the corresponding year-ago reported figures. The consensus mark for FDUS’s 2023 earnings has moved 5.6% north in the past seven days.
The bottom line of Invesco Mortgage outpaced estimates in each of the last four quarters, the average surprise being 54.24%. The Zacks Consensus Estimate for IVR’s 2023 earnings suggests an improvement of 1.1% from the year-ago reported figure. The consensus mark for IVR’s 2023 earnings has moved 18.4% north in the past seven days.
New Mountain Finance’s earnings surpassed estimates in two of the trailing four quarters and matched the mark twice, the average surprise being 2.20%. The Zacks Consensus Estimate for NMFC’s 2023 earnings suggests an improvement of 23.4%, while the same for revenues suggests growth of 28.8% from the corresponding year-ago reported figures. The consensus mark for NMFC’s 2023 earnings has moved 3.3% north in the past seven days.
Shares of Fidus Investment, Invesco Mortgage and New Mountain Finance have gained 7.3%, 6.5% and 9.1%, respectively, in the past three months.
7 Best Stocks for the Next 30 Days
Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."
Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.3% per year. So be sure to give these hand-picked 7 your immediate attention.
See them now >>Discover Financial Services (DFS) : Free Stock Analysis Report
INVESCO MORTGAGE CAPITAL INC (IVR) : Free Stock Analysis Report
New Mountain Finance Corporation (NMFC) : Free Stock Analysis Report
Fidus Investment Corporation (FDUS) : Free Stock Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
