Fighting fraud – making the invisible visible

How extensive is the fraud problem in government agencies? Unfortunately, reliable figures are not available, partly because it is difficult to investigate and estimate the invisible. In the Netherlands for example, the Central Bureau of Statistics (CBS) calculated that fraud, excluding money laundering, amounted to €4.6 billion in 2014. The main cases were across all sectors: in bankruptcy, insurance, tax, investment and identity data.

Government agencies are willing to contribute to the fight against fraud, but questions remain about exactly how they might achieve and sustain a significant decrease in fraud. At Atos, we believe a three-step transformation approach can help:

  1. Create awareness and identify change champions
  2. Transform your digital landscape
  3. Collaborate in the value chain

Below, we will examine each of these three phases in more detail.

Create awareness and identify change champions

Government agencies must be aware of the impacts that fraud has on organizations and society. They can include financial loss and an inability to allocate resources to resolve important social issues. To succeed, governments must answer questions such as:

What is the scale of the fraud?

What impact is it having on organizations and society?

Once the awareness is created, the challenge becomes to prevent, detect and resolve fraud as quickly as possible. The answer is to collaborate within the organization, because access to employees with diverse expertise is required. It’s important to identify champions who represent a large part of the organization and support change.

They must establish a common understanding of the fraud triangle (shown at right), to truly understand the reasons behind an individual’s decision to commit fraud. Looking at these together, fraud risk profiles can be identified and matched with customer data (known as profile matching). When risks or issues are found, solutions can be developed and implemented.

Transform your digital landscape

Technology is critically important to develop solutions for fighting fraud, and we have four recommendations for transforming the digital landscape to achieve your goals:

1. Fighting fraud requires profile matching applications that employ huge customer data sets. This requires large, flexible data storage and computing capacity, which are not always available on an on-premises platform. We advise installing these applications on a cloud platform that also provides other benefits such as economies of scale and flexibility in upscaling and downscaling.

2. Profile matching often consists of many repetitive tasks, such as identifying suspicious customers and scoring fraud risks. For organizations susceptible to fraud, the speed and quality of this process can benefit from Robot Process Automation (RPA) – allowing 24/7 automated processing and enabling employees to focus on resolving fraud cases.

3. Patterns and trends can be used to analyze the current situation, but also to predict future fraud prevention needs. Human tasks in this area can be partly handled by artificial intelligence (AI), because of its speed and intelligence. For example, AI can be used to gain real-time overviews of patterns and trends of customer income and expenses to predict suspicious situations that can be flagged for further investigation. If it is found not to be fraudulent, the information can be used by the AI to better understand the customer’s behavior.

4. Traditional computer systems on cloud platforms must evolve, because new innovations require more and more data storage and computing capacity. Replacing traditional computers with quantum computers is one future solution, because they process data exponentially faster for fraud detection and prevention.

Collaborate in the value chain

These individual elements in the digital transformation provide advantages over analog and manual processes and approaches, not the least of which is their ability to evolve as criminal activity evolves. However, in the future, a more collaborative value chain between public and private organizations can create even more value, where digital solutions can reside on a common digital platform (see right) where they share data.

For example, at the airport, each individual’s passport is checked upon departure. Profile matching is applied to customer databases of various organizations. If it appears that the person has committed fraud or is suspected of fraud, he/she will be arrested by the police. This creates the public and society to derive value from the chain and civil society, rather than only the organizations themselves.

Thus, a successful value chain must have a common sense of urgency; a common vision and strategy; efficient and effective collaboration and alignment between change champions within the organizations; and constant awareness of the need to improve fraud fighting performance.

 

The past has shown us that fraudsters will continue to evolve. If we can embed a culture of continuous change, embrace value chain collaboration and the latest proven technology, concepts and approaches, we can stay one step ahead.

 

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About Frido Hageman
Executive Business Consultant for Government Agencies
Frido Hageman enjoys helping clients to achieve their strategic goals. More than 14 years he has experience in business and IT strategy as trusted strategic advisor for Public Service & Defence organizations. His focus is on further developing and improving the interaction between people, processes, organization and IT in the light of creating and accelerating public value.

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