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9/21/2007
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Sallie Mae Becomes Online Business With Help Of Complex Event Processing

The former government entity uses 35 fraud detection patterns to combat fraud and ensure student loans are processed correctly.

For college students, "the preferred means of communication is digital," said Jo Lee Hayes, VP of enterprise technologies at Sallie Mae, the student loan supplier currently managing $153 billion in loans.

That means over the last four years, 90% of Sallie Mae's loan applications have shifted away from paper based applications to Web-based forms. On peak days, 20,000 applications pour in from its Web site, a pace that's lead Sallie Mae into online monitoring systems to help it manage its sudden shift into an online business.

Sallie Mae is no longer a government entity. It was taken private by investors earlier this year as SLM Corp. But it's still popularly known as Sallie Mae and uses Salliemae.com as its Web site. It monitors the daily user experience on the Web site through Tealeaf Technology, a system that captures and reports on the end user activity and when an individual end user has stalled at filling out an application or failed to finish the process.

But the quality of the customer experience, the safeguard that keeps customers coming back, rests more on background complex event processing. Complex event processing can spot business processes that regularly misfire or scammers as they deliberately try to fox the system, often a sign that loan fraud is underway.

While Tealeaf helps with individual problems, "complex event processing has fundamentally changed the way we do business," said Hayes.

Complex event processing lets Hayes' staff to build up a history of correctly executed business processes, often those reported by Tealeaf. Coral8 can then be used to define exceptions or events to watch for that may indicate the process is going awry. Such event sequences can be given a specific window, such as a time period of one week or 30 days. For example, if 10 different applicants show up within 30 days, all with the same co-signer, that's "warrants closer inspection," and the 10 applications will be flagged, said Hayes.

Sallie Mae's IT staff has constructed 35 fraud detection patterns that Coral8 can watch for, as well as more mundane indicators, such as spotting that the loan application process is moving too slowly.

In the past, systems management, such as CA-Unicenter or BMC Software's Patrol, have kept an eye on whether servers with their applications were running. End user monitoring systems, such as Keynote or Tealeaf, have watched the response times to end users or compared expected responses to what's being sent to end users, detecting error messages and other disruptions. But complex event monitoring lets IT staffs combine those types of monitoring with added intelligence, and correlate what the monitoring systems are saying as events occur.

Said Hayes, "We now have end-to-end visibility into what is occurring. With Coral8, we can take action on those events" when preset triggers indicate action is needed.

Complex event processing has been slowing growing in popularity as IT staffs recognize the amount of complexity it can handle. Complex event processing got its start on Wall Street, where traders wanted software assistance in watching events unfold in trading markets. Complex event processing was engineered by some of the pioneers in database transaction processing, such as Michael Stonebraker, the Berkeley, Calif., computer science professor behind Ingres and Postgres. Streams of events can be queried in real time with something that resembles the relational database SQL query.

Aleri, Streambase, Syndera, and Coral8 are among the firms that offer complex event processing systems.

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