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MELLON BANK TO INSTALL NESTOR'S FRAUD DETECTION SOFTWARE

 MELLON BANK TO INSTALL NESTOR'S FRAUD DETECTION SOFTWARE
 PROVIDENCE, R.I., July 7 /PRNewswire/ -- Nestor, Inc (OTC Bulletin Board: NEST) today announced that Mellon Bank, Pittsburgh, has agreed to install the Company's credit card Fraud Detection System (FDS) on its mainframe computer. FDS is a mainframe-based application designed to detect fraud in the credit card industry. The software is used to protect the individual cardholder and the bank against losses due to fraud.
 FDS makes use of Nestor's proprietary neural network architecture to "learn" a cardholder's pattern of credit card use. The system is capable of detecting changes in these patterns that could be indicative of fraud. FDS catches the changes as they begin to occur, providing banks with the earliest possible warning of potentially fraudulent activity. FDS's built-in adaptability allows the software to learn new patterns as new types of fraud occur.
 Mellon's decision to license the software comes at the conclusion of a pilot study that Nestor conducted to demonstrate the level of fraud savings that Mellon will derive from use of the FDS system. The pilot study consisted of Nestor's training FDS to detect patterns of fraud from data in Mellon's portfolio. The trained FDS was then tested on Mellon's credit card transactions to measure its ability to provide an early-warning fraud alert in a variety of simulated installation models.
 Philip Samson, vice president/portfolio manager of Mellon stated, "Nestor's FDS software will achieve two levels of savings for us, one from increased detection of frauds and the other from the increased efficiency that it will bring to our account review process. The feasibility study convincingly demonstrated that the FDS software could detect more frauds, and detect them earlier, than other methods allow. FDS's accuracy in spotting fraud patterns means that we will have a much smaller number of accounts to review for suspicious behavior."
 Douglas Reilly, vice president/financial applications of Nestor, said, "Mellon Bank is a leader in applying new technology to banking operations. The license agreement which they have signed for FDS paves the way for an installation of the software on Mellon's mainframes that will greatly reduce their exposure to fraud. It's a win for the bank and a win for their cardholders."
 Nestor products are based on the company's proprietary neural network technology which operates as adaptive information-processing systems that "learn" from experience. All products can be taught to recognize complex configurations of data, and to recognize and classify various patterns.
 -0- 7/7/92
 /CONTACT: Douglas Reilly of Nestor, 401-331-9640; JT Tuskan of Mellon, 412-234-0850; or Burton Arkin of Arkin Associates, 212-599-2369, for Nestor/
 (NEST) CO: Nestor Inc.; Mellon Bank ST: Rhode Island IN: SU: CON


SH -- NY008 -- 6863 07/07/92 08:45 EDT
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Publication:PR Newswire
Date:Jul 7, 1992
Words:454
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