Shyam_Bhatt
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Investigating Network Fraud: 4 Key Areas for Investigators
Following on from my article on why networks are important – I regularly talk with investigators on how best to identify and investigate organised network fraud. I am mindful that there are a lot of seasoned investigators out there so in this article I will be talking basics and from a perspective of using technology only to investigate network fraud. The first principle of investigating network fraud is to have all available data in the hands of the investigators – this sounds quite basic but often we speak to investigators who use different data sources, capabilities, and sources of alerts that are not integrated into one platform. The best technology platforms I have seen take a best of breed approach and provide the ability to integrate easily and onboard data as efficiently as possible to allow for greater data coverage and better investigator efficiency. The second principle is to think of fraudsters as business people, and from that lens we should understand that fraudsters want to “sweat their assets” (vehicles, synthetic IDs, group resources etc.) to make their business (illicit streams of money through fraud) as profitable as possible in the shortest time-frame whilst taking the minimum operational risk. Read the full article here (login required): https://community.quantexa.com/kb/articles/203-investigating-network-fraud If you are not a customer or a partner and would like to see the article, please comment below.Event Roundup: Global Insurance Fraud Summit - Edinburgh
This month, the Quantexa team and customers participated in the Global Insurance Fraud Summit (GIFS). This summit aims to bring together global consortia and insurance organisations as well as law enforcement such as the Insurance Fraud Enforcement Department (IFED) and Interpol. Quantexa and our customers participated in several panels and presentations. One consortium in Asia indicated the importance of bringing together technology, training and operational processes, with the rollout undertaken this time taking into account of all three for maximum benefit to its members. It was also great to hear from our Public Sector customer, who provided learnings on how to tackle fraud as there are commonalities between insurance fraud and public sector fraud. This organisation also stressed the importance of using data correctly in conjunction with accurate entities and networks, highlighting that they had saved close to £311m overall as an organisation. It was fascinating to hear from other countries on how they are tackling fraud, and to hear from David Glawe, the CEO of NICB. The key common threads throughout the majority of the presentations were: Fraud is commonplace across all territories with a huge victim or consumer impact Fraudsters are like business organisations, and like businesses have extended their supply chains, impact and networks globally The use of technology on the fraudster side is increasing, and only by insurance organisations doing the same can fraud be tackled sufficiently It was also great to hear the insurers’ view on these panels as well, with senior executives talking about the importance of a single customer view for use in multiple use cases as well as understanding that at the moment it is a tough financial climate due to inflation. There was an appetite to work together with bureaus, however this process needs to be easier either through the mechanisms of sharing data more easily or understanding global schemes or problems centrally. It was a great pleasure to take part in the Global Intelligence Sharing panel, and during this we discussed how can insurance organisations share more easily, and by sharing it won’t be as easy as sharing data globally due to the many different data sharing restrictions we have globally. Rather, we must start with understanding how we are sharing currently, what learnings we can take from there and then building on this to start sharing modus operandi or common trends.Re: The changing shape of fraud in the UK market - ABI Fraud Statistics
Good points - I think the key term in the ABI stats is "detected" claims. When we speak to the insurers in the market, there is a concern especially relating to fraudsters utilising new technologies or chancing their arm because of economic hardship - the numbers don't imply that and therefore we should not be seeing these statistics as complete validation that fraud is reducing when there may be more factors in play.The changing shape of fraud in the UK market - ABI Fraud Statistics
With the latest release of the ABI fraud statistics, there have been some interesting numbers highlighted. The figures indicate that the total number of fraudulent claims detected fell by 19%. But looking deeper at the figures – whilst the number of fraudulent claims detected reduced, the average value of a suspicious or fraudulent claim increased to £15,000 – a 20% increase from the previous year. Does that mean fraud has reduced? My view is that looking at the numbers it implies that insurers may have good measures in place to detect the traditional fraud scams, however an increase in the average claim indicates that fraudsters are changing the way that they are trying to defraud an insurer through cost-layering for example. One figure from an insurer in the market as an example highlighted that previous to the OIC and Whiplash Reforms being implemented, only a fraction of claims had psychological damage whereas now it features in 60%+ of claims that are being made. This changing nature of fraud has always been a common trend, and this is further implied from the latest ABI fraud statistics with the rise in value of property frauds, which rose £134m and up 8% from the previous year. With the cost-of-living crisis, and with the advent of new technical capabilities in the market – insurers need to be constantly adapting to new changes and modus operandi through efficient use of technology. The ABI itself highlighted an increase in opportunistic fraud of 2% demonstrating that unfortunately individuals previously unknown to the insurer may attempt to make fraudulent claims due to economic circumstances. AI is seen as the silver bullet but without better context, using the data more efficiently and enabling investigators more, fraud will just get displaced into other areas of business which without identifying as soon as possible will cause even more challenges for insurers down the road. Read here about how poor data quality can hurt the insurance industry's ability to detect and prevent fraud.Re: Insurance data privacy & ethics - how far does the market need to go?
This is an interesting topic - because if you see insurers who follow GDPR across Europe for example - they have different interpretations. GDPR should be seen as a mechanism to share data under lawful conditions when often it can be said that it is instead used to say no to sharing. This has an impact to fraud - especially with data sharing and we all know that fraudsters are not vertical specific i.e. if they commit insurance fraud, they may commit banking fraud, tax fraud, benefits fraud etc. Having a platform that is transparent, explains decision making and only uses the data required to make decisions is very important. Especially when considering multiple use cases - with data collected under different gateways i.e. consent versus legitimate interest.
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