How Virgin Trains is tackling delay compensation fraud using ServiceNow
- 26 October, 2018 13:00
Virgin Trains is using the data flowing through its ServiceNow instance to better process delay compensation claims and help spot fraudulent claims.
Speaking on stage during the ServiceNow Forum in London last week, CIO John Sullivan and head of technology services and support Dean Underwood talked through the train operator's use of ServiceNow, focusing on those two use cases.
Virgin Trains is one of the UK’s busiest rail travel providers, carrying 38 million passengers a year, serving the West Coast line of the UK.
The rail company believes that 50 per cent of its passengers will travel on digital tickets by the end of the fiscal year.
Virgin adopted ServiceNow initially in 2016, switching from a third party IT service provider, and has deployed 700 changes to the platform since then. Simply by bringing things in house and consolidating around a single, transparent platform, the company claims to have brought service ticket levels down by 33 per cent.
For the uninitiated, ServiceNow is a cloud-based SaaS platform for everything from IT service management (ITSM) to HR and customer service, aimed at making service requests simpler and more transparent.
The UK’s railways are notorious for delays, and ServiceNow and Virgin Trains alone aren’t going to be able to solve that. In fact, Sullivan said on stage that “it happens too often and 85 per cent of it is down to Network Rail.”
“As an industry the biggest challenge we face is disruption,” Underwood added. The answer for the IT team was to build a ServiceNow Customer Service Management (CSM) module to drive that compensation claims process between passengers and customer service staff.
Since being put in place that module has processed 500,000 cases in seven months, paying out a staggering £10 million in compensation.
Working with its implementation partner UP3, Virgin Trains was able to move its compensation claims process from Microsoft Dynamics to ServiceNow in the space of six months.
“That gives us a lot of data,” Underwood said.
The flexibility of the new system, which allows for Virgin Trains to roll out changes as requested by the users themselves, has meant that the provider has been able to consistently hit its service level agreement (SLA) targets from regulator the Office of Road and Rail (ORR), which is to respond to compensation claims within 20 days.
“The technology was hampering the team and since migrating we have hit nine months in a row," Underwood said. He puts this improvement down to “purely visibility” as the team can now easily see when a claim is about to breach the SLA and respond accordingly.
The next step for Virgin was to see if it could leverage that data in ServiceNow to better spot fraudulent claims, a problem the industry has pegged at responsible for between 10-30 per cent of claims.
“That’s a lot of money, so by using this rich data in the CSM module to link up consumer records and various identity markers we can project the loss if we allowed that individual to continue in that space, and have had massive success with that,” Underwood said.
Sullivan said they were able to develop the fraud monitoring capability with UP3 and ServiceNow in two months at a cost of £60,000, whereas other fraud systems were being quoted at £400,000 and above, and included a sharing clause for any savings made.
Underwood added that the flexibility of the system allowed his team to incorporate a “a journey validation element” which automatically parses the ticket information to validate it as a genuine journey, or pass it on to the fraud team in more complex cases.
“That sits on top of CSM and every claim comes though that module,” Underwood explained. “Historically we took data out and sent it to a company who would create a report and tell us we had lost £5 million in fraud and would recommend changes. We can’t get that back," he added.
Now the fraud team has closer to real time data and can weight claims based on a risk profile, including a capability to spot ‘impossible journeys’ where a customer is claiming to be on two different trains at the same time.
This is currently a 'partly automated' process, according to Underwood. "Details are entered manually by agents and then the validation against railway systems is automated at that point. We do see this being a fully automated check at point of capture when we release our consumers portal," he explained.
Virgin is currently running the fraud detection system as a pilot in a team of three, and Underwood admits they are still tweaking it to bring down the level of false positives, but at a cost of £60,000 if the system can spot even one percent of existing claims it could prove an immediate return on investment.