There can be no doubt that fraud is on the increase, and is becoming a growing concern for organisations across the board, particularly those in the financial services and government sectors.
This increase in the number of fraudulent activities is largely due to the global economic climate, compounded by advances in technology, which enables fraudsters to launch ever more sophisticated attacks that are more difficult to detect.
The fact is, fraud can have a drastic impact on the financial performance of organisations, and the sheer prevalence of fraud, along with the dangers of letting it run undetected in your business, creates unacceptable levels of risk.
At a recent business breakfast, held at the Michelangelo Hotel, in Sandton, experts from SAS and Facts Consulting explained how understanding fraud is the first step towards preventing and thwarting it, and gave insight into industry trends around fraud to help delegates better come to grips with exactly what their organisations face in this space.
Yoland'e Byrd, a certified fraud examiner and director of FACTS Consulting, is well known for her best practice in the forensic data analytics unit of a government statutory body. She delivered the keynote address at the breakfast, outlining current fraud trends as well as the impact of fraud on organisations.
“According to a US survey by the Association of Certified Fraud Examiners, organisations lose 7% of their annual revenue to fraud. Fraud schemes go undetected for years before being detected,” she says. “Fraud is more likely to be detected because of a tip-off rather than through internal controls and audits. This points to a greater need for stronger internal anti-fraud controls, and harnessing the power of data analytics to analyse massive volumes of data and flag various suspicious events. In doing so, it could go a long way towards detecting and preventing fraud.”
Supporting Byrd was Colin Hill, SAS Senior Principal Consultant for risk, who discussed the SAS Fraud Management solutions, as well as how these powerful tools can assist organisations to become more proactive in their efforts in detecting fraud early and minimise the impact of these crimes.
“The SAS Fraud Management solutions provide the ability to analyse 100% of transactions in real-time, leveraging additional data in the fraud identification process and using the capability of powerful advanced analytics and extensive rule writing capabilities to give organisations the edge over fraudsters,” says Hill.
Antoinette van Zyl, Practice Lead for Data Quality and Data Integration at SAS, explained how data governance is an important aspect when it comes to combating fraud.
“Data governance provides ongoing services that enable fraud detection, reactive issue resolution that can be used for fraud resolution, and proactive rules that can be used to determine fraud standards, policies, procedures and governance,” she says. “A good data governance initiative allows for increased consistency and confidence in decision-making, improved data security, designation of accountability for information quality, and standardised, repeatable and transparent processes. All of these aspects can help to minimise the risk of fraud as well as make these activities easier to detect.”
Completing the presentations, Goran Dragosavac, Practice Lead for Analytics, further explained how business intelligence can help organisations to manage fraud.
“Few organisations have strong BI-enabled enterprise wide fraud management programmes that can effectively fight fraud in a way that is easy to manage and which offers fraud protection on all levels of an organisation,” he says. “BI in the context of the SAS Fraud Framework offers one integrated solution with a complete set of capabilities, including a powerful analytical engine, which can help to find unusual data, identify unexplained relationships, and generalise the characteristics of fraud.”
The ability to detect fraud is the first step in preventing it from happening in the first place, and with the prevalence of fraudulent activities taking place in organisations across all sectors currently, knowing that fraud is happening and shutting it down is of paramount importance to keeping businesses running as profitably as possible.
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