Enterprises could better use analytics to prevent fraud

Fraud detection and analytics CSC Blogs

Given that we’re now in a digital economy in which millions of transactions are completed electronically every hour, one might expect enterprises to aggressively leverage technology to combat fraud.

Instead, they’re being beaten to the technology punch by fraud artists, according to a recent survey by KPMG International.
“Almost a quarter of fraudsters rely on technology,” the report said. “Companies, by contrast, could do a great deal more to use technology as a tool to prevent, detect and respond to wrongdoing.”
The report cites one technology as being particularly effective in combating fraudsters: the light saber of analytics.
“The key anti-fraud technology is data analytics, a tool that can sift through millions of transactions, looking for suspicious items. An increasing number of organizations are introducing data analytic solutions to search for unusual transactions amid millions of day-to-day sales and purchases.”
Unfortunately, “data analytics does not appear to be fully deployed by companies. Proactive data analytics, searching for fraud amid anomalies and suspicious business activity, accounts for only 3 percent of frauds detected.”
Frauds in North America were most often detected by (in descending order):
  • Tip-offs and complaints
  • Management review
  • Accidentally
  • Suspicious superiors
  • Internal audit
One common obstacle is that enterprises “often buy off-the-shelf solutions that do not integrate well and are eventually scrapped. Far better to look for a more comprehensive solution that will cover most of a company’s important surveillance and detection needs.”
That’s absolutely true. If you want the job done right, you need the right tools for the job. This means determining your fraud-detection needs, conducting research, comparing vendor solutions and choosing the right partner. Oh, and actually deploying your data analytics tools.


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