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Why are networks so important in financial crime?

Shyam_Bhatt
Shyam_Bhatt Posts: 13 QUANTEXA TEAM
in Specialist User Groups

A question I get asked quite often is "why are networks so important in identifying financial crime?"

Organised criminals have learnt to attack weaknesses in claim/application/quote systems to generate high value low-risk income. Often, legitimate identities are hijacked or bogus ones are created and typically these individuals would have a deep understanding of the workings of existing protection systems and systematically probe systems to discover risk rules.

This means that existing systems which are rules based cannot typically detect these attacks as each individual transaction looks "normal" - there are also similar techniques engaged against banks and tax authorities or examples of a "below the radar" distributed attack.

This means networks are really important as suspicious transactions will tend to cluster together as criminals will:

  • Re-use mobile phone numbers
  • Re-use email addresses
  • Re-use bank accounts
  • Re-use addresses
  • Use a "template" for a transaction that they know will avoid triggering the existing rules to create bursts and look to illicitly gain money from financial organisations

Only with well-formed entities, networks and indicators that can amplify weaker signals across these can we detect patterns and relationships.

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