In a previous blog post I discussed the many different forms of fraud, as well as the growing complexity of the fraud schemes. It may have discouraged some people and led them to the conclusion that we are fighting for a lost cause. But that would be a rash conclusion: we still have a lot of defense mechanisms and tactics available.
Inform, raise awareness and detect
So what can we do to counter this constant stream of sophisticated and varied attempts at fraud? We can install good physical and digital security, of course, and make our staff aware of the risks of cybercrime, social engineering, bribery, blackmail and other dangers. Because it is not just about financial loss, but also increasingly about the theft of confidential information, customer data or business secrets.
Awareness is important because you need to pay attention to all possible forms of fraud, so that you can quickly recognize and preempt suspicious patterns, whether they are linked to one another or not, before the fraud itself is actually perpetrated. Fraud detection and prevention is always simpler than trying to recover losses. It is also cheaper and the organization can protect its reputation and retain the trust from its customers.
Company-wide frameworks
To achieve this, you need an all-encompassing framework capable of uncovering, analyzing and linking suspicious behavior at every possible level. This begins with gathering all the relevant data from every possible channel and integrating those data in the analysis process. The system must then be capable of filtering out suspicious behavior from all of the transactions and events observed, both in the past and in-real time. The system also needs to be self-learning so that it becomes better at distinguishing genuinely suspicious behavior from the ‘false positives’ in the future. Such a framework has been developed at SAS.
To find out more about this framework, its value for Chief Risk Officers and equivalent managers, and to learn more about a specific German insurer using this solution, please click here.