Financial Fraud
Financial fraud costs governments and other organisations vast sums of money each year. In fact, it is estimated that fraud cost these organisations a massive £13.9 billion in the UK alone in 2006, and the Association of Chief Police Officers (ACPO) estimates that this increased to £20 billion with the inclusion of income tax and EU related fraud. Amounting to £330 per year for every man, woman and child in the UK, the overwhelming majority of these incidents were committed by organised criminal groups, and KPMG noted that in 2007 almost 200 fraud cases, worth over £1 billion, came to court.
Identity fraud in particular is a constant threat, with stories of stolen identities often making front-page news. Indeed tales of consumer IDs being sold for a pound on Russian websites are not over-rated, and CIFAS, the UK’s Fraud Prevention Service, identified an astounding 65,043 cases of identity fraud in 2007. By any measure, then, fraud is one of the greatest economic threats that governments have ever faced.
Fraud is an increasingly challenging problem to address: whilst traditional financial fraud often saw fraudsters leaving a convoluted, but still traceable audit trail, this is no longer the case. And as traditional accounting methods of detecting irregularities have become more effective, so too have those of the fraudsters, developed to such an extent that their activities can no longer always be detected ‘in the numbers’. This challenge has led many fraud investigation teams to turn to information and analysis which sit outside the account books.
In the fight against fraud, collaboration is undoubtedly one of the most powerful methods, but for this to be effective, governments and their agencies require data management and analytical systems to effectively share information. Only be doing so can they uncover connections within information that will unveil fraudsters. It is vital that ‘soft’ information about a suspected fraud is collected and analysed, and questions asked of the data such as who had access to funds, who had custody of them, what relationships do these people have, have we encountered any of these people at another point in the system, is this person who they say they are etc?
The answers to all these questions are crucial in the modern fight against fraud. The Memex anti-fraud solution enables organisations to increase the automation and efficiency of the investigation process and manage their data outside of traditional audit tools. Crucially, it allows organisations to answer all the right questions, enabling them to predict, prevent and respond to fraud threats, in real-time.
