Educational webinars, new IP and customer successes heralded for International Fraud Awareness Week
Though the exact toll is immeasurable, fraud losses drain about 5% of a typical organisation’s annual revenues, estimates the Association of Certified Fraud Examiners (ACFE). Applied to last year’s gross world product of $84.84 trillion, that equals an astounding $4.24 trillion stolen, swindled or otherwise usurped in 2018 – the equivalent of $11.6 billion looted from the global economy each day.
To spotlight the critical role of anti-fraud technology, analytics leader SAS sponsors International Fraud Awareness Week, Nov. 17-23. The ACFE-led campaign aims to reduce the immense business and personal impacts of this criminal pandemic through awareness and education, including these live and on-demand webinars:
- One Step Ahead: Fight Fraudsters With Cutting-Edge Technology, Tuesday, Nov. 19 at 11 a.m. ET. Hosted by SAS with Intel and Capgemini, ACFE President and CEO Bruce Dorris will moderate a panel of experts exploring anticipated trends, challenges and best practices for integrating anti-fraud technologies.
- Managing Risk in the Age of Fraud, Friday, Nov. 22 at 3 p.m. ET. Exclusive to ACFE members, this webinar will convene FinServ fraud experts from SAS alongside Mary Ann Miller, Head of Fraud Strategy at Varo Money; and Frank McKenna, author of the blog Frank on Fraud, and co-founder and Chief Fraud Strategist of PointPredictive. Topics include 2020’s top fraud trends and the vital importance of artificial intelligence (AI) and predictive analytics to drive digital transformation.
“The techniques used by cybercriminals and organised crime groups are growing increasingly sophisticated. That’s why SAS is taking steps to ensure that banks, insurers and other organisations can use advanced analytics to keep ahead of the agile fraudsters of the digital age,” said Alex Boothroyd, Senior Banking Fraud Solutions Specialist at SAS UK & Ireland. ” The SAS suite of solutions provides organisations with full visibility of fraud risks, leveraging AI and predictive analytics to pre-emptively detect emerging threats, both known and unknown.”
SAS readies launch of new digital identity and authentication offering
As digital transformation accelerates, the matter of identity and authentication has emerged among the most pressing fraud issues. Is the person transacting on the other side of that computer or smart device who they claim to be? Banks, insurers, telecommunications firms and retailers have mere seconds to answer that question, even as online identities have become more malleable and spoofable than ever.
SAS® Identity Enrichment and Assessment will soon debut as a software-as-a-service (SaaS) offering. Powered by SAS Analytics, it harnesses the deep intelligence of consortium data – identity data crowdsourced from multiple providers – to deliver rapid, centralised authentication of digital users.
“Authentication measures can be an ongoing thorn in the side for organisations of all size, who need to strike the balance between security and providing a seamless customer experience,” said SAS’ Boothroyd. “Organisations need to have a thorough understanding of true identity if they are to succeed in preventing fraud. SAS solutions can provide this by sifting through large volumes of multi-spectrum data from industry-leading providers, encompassing digital identity, biometrics, telephony data, public records, fraud scoring and more.”
The forthcoming offering is just the latest in an arsenal of fraud-fighting analytics solutions helping SAS customers outpace the bad guys.
UK Insurance provider Admiral fights fraud with AI
Fraudulent claims and applications are a major problem for the UK insurance industry, with both insurers and genuine customers paying the price through increased premiums. According to Cifas, the UK’s leading fraud-prevention service, false insurance claims rose by 27% in 2018 from the previous year, with auto/motor seeing a 45% increase.
Admiral, a UK-based insurance company, has developed fraud portals that eliminate the need for manual referrals, saving significant time and resources while detecting more fraud than ever before. Fraud investigators and analysts now work from a single centralised hub, sharing data across the organisation and applying sophisticated analytics to detect and prevent fraud. This approach has delivered more than £31 million of benefit in the last 12 months alone, including £6 million in savings for claims fraud.
“We used an insurance fraud analytical engine from SAS to apply multiple techniques – including automated business rules, machine learning, artificial intelligence, text mining, database searches, anomaly detection and network-link analysis – to automatically score claims, associated entities and any corresponding social networks,” explained Sarah Lang, Head of Business Analytics at Admiral. “This process has allowed us to build a strong relationship between analytics and claims fraud. A continuous feedback loop ensures we continue to update the process, identifying fraud in more cases in a faster way, whilst improving our customers’ experience.”
Detecting fraud, waste and abuse in prescription drug claims
Health care fraud costs insurers between $70 billion and $234 billion each year. Prime Therapeutics is fighting back with an initiative that saved the 23 Blue Cross Blue Shield plans it serves $279 million in the first year.
Last fall, Prime became the first pharmacy benefits manager (PBM) to integrate pharmacy and medical drug claims with medical service data in a comprehensive anti-fraud platform. Prime’s new SAS platform delivers a holistic, total drug management view: data from members, prescribers and pharmacies, fully integrated together. That complete data picture combined with the platform’s robust AI and machine learning capabilities enables Prime to detect fraud, waste and abuse (FWA) regardless of cause or source.
“While many PBMs and health plans have facets of these data, it is the integration of the data – and the complete picture it creates – that powered our early success,” said Jo-Ellen Abou Nader, Vice President of FWA and Supply Chain Optimisation at Prime. “In 2019 alone, Prime investigators referred 721 cases involving activities by doctors, patients and pharmacies to payers based on insights from the SAS platform and our new approach to detection and prevention.”
ERSTE BANK HUNGARY IMPROVES AND SECURES THE REMOTE BANKING EXPERIENCE WITH ONESPAN MOBILE SECURITY
Leading Hungarian bank deploys OneSpan’s Mobile Security Suite to one million customers to make mobile banking convenient while fighting fraud and meeting PSD2 requirements
OneSpan™ (NASDAQ: OSPN), the global leader in securing remote banking transactions, today announced that Erste Bank Hungary, a subsidiary of Erste Group Bank AG, one of the leading banks in Central and Eastern Europe, has integrated OneSpan’s Mobile Security Suite into its banking app MobilBank. Erste Bank Hungary selected Mobile Security Suite to enable and protect online and mobile transactions and to comply with PSD2 requirements for authentication and dynamic linking.
The European Payment Council has stated that social engineering attacks continue to increase and remain instrumental in fraud schemes, often in combination with malware. Erste Bank Hungary chose to implement OneSpan’s Mobile Security Suite to protect against potential social engineering and malware attacks directed at its customers. OneSpan’s technology enables banks to integrate application shielding, biometric authentication and transaction signing.
Erste Bank Hungary added Mobile Security Suite’s Cronto visual transaction signing to replace the bank’s SMS authentication with push authentication for login and transaction signing. This new process improves security and eliminates significant costs related to SMS delivery. OneSpan’s Cronto technology also helps fight social engineering attacks like phishing, while enhancing the customer experience by enabling transaction signing using a color QR code.
“OneSpan’s proven technology will help us maintain our leading position in the market without compromising on security or the customer experience,” said Erste Bank Head of Digital Services, Akos Andras Molnar. “As part of this roll-out, our customers can also make online purchases using push notification with any retailer connecting to Erste Bank via the 3-D Secure protocol.”
“Criminal hackers continue to target banking customers as social engineering remains a preferred technique,” said OneSpan CEO, Scott Clements. “In their search for security solutions, banks need to consider cost, convenience and regulatory compliance. OneSpan’s technologies address these concerns so that banks can focus on providing a secure and convenient customer experience.”
HOW WILL LENDERS TREAT THE FINANCIAL SYMPTOMS OF COVID19?
COULD the coronavirus pandemic spark a financial crisis similar to that which was seen in 2008? Tim Kirby, Group Commercial Director of the global fintech Monevo, a personal lending marketplace and platform, discusses how Covid-19 could play out for lenders.
The 2008 financial crisis, explains Kirby, was about credit over-exposure. While strains are apparent in the money markets today, it is not 2008, when risky mortgage investments in the US banking sector and into the UK caused everything to collapse.
Kirby said: “The financial crash was self-inflicted for many reasons, including poor income verification, poor credit quality assessment and poor employment verification (self-certification). It was asset-backed predominantly as it was led by sub-prime mortgage lending.
“My thoughts are that once the virus is contained, the economy will most likely turn back on within a few months, however recovery to current levels will be somewhat longer.”
Kirby predicts that it is very possible this downturn will be shorter than the 2008 financial crisis based on a number of factors.
He said: “The financial crash was either at a house purchase level or encouraging debt consolidation through re-mortgaging that placed unsecured debt into secured debt over a longer term. The consumer then ramped up unsecured debt again with the same poor assessment applied and eventually ran out of headroom.
“This was propped up by the capital markets and warehouse funding lines being supported through securitisation models that rated the loans held in the bonds as AAA.”
Kirby adds that the coronavirus outbreak is more micro and consumer-led than the recession was.
“There is still a great deal of uncertainty, but consumers are certainly going to experience affordability difficulties in the short-term, perhaps three to six months,” Kirby explains. “Lenders are already tightening their criteria and that could lead to more tactical initiatives being introduced.”
Kirby points to the potential introduction of black-listing certain occupation types most affected, and reducing opening balances to applicants that they are most prepared to lend to.
He said: “At Monevo, we have been speaking to lenders who are predicting a 50% slow down, with some pausing to assess short-term strategies, as clearly there are aspects of credit / risk scorecards that aren’t working at the moment.”
Kirby also adds that access to capital markets will be a challenge in the short term: “Lenders who don’t lend off balance sheet may become constrained and you would have to question the Peer-to-Peer lender impact as the returns and appetite of investors could be under threat.”
“Additionally, those lenders nervous about funding certain cohorts of consumers, now have those very same consumers currently in their loan books.
“So, for lenders, focussing on forbearance and other support activity to protect these consumers in the short term of 3-6 months, will be a priority.
Kirby takes the view that it is important lenders relieve some repayment pressure from consumers in the short term, so they can rehabilitate when the new normal arrives.
“Lender feedback in the last week is that they haven’t seen a massive increase in defaults, it’s very early days though. Anecdotal feedback from lenders that are strong and well-funded is that they expect strong growth when the market returns, and that those who are optimised and agile will see an upswing.
“What I am hearing, is that consumers will remedially seek liquidity through debt, as the world normalises to address the short-term pain being experienced at present.”
Kirby adds that lenders who look at credit risk closely when the upturn comes in three to six months could see dramatic growth, albeit from a reduced base.
He added: “From Monevo’s perspective, day trading is difficult to predict and lenders are re-assessing short-term strategies. We are using the time at present to apply additional focus on our internal tech pipeline in driving the product development roadmap forward to continue to deliver great solutions for our partners.
“We want to ensure when normality returns and the upswing in both demand and supply inevitably happens, that we are supporting our origination partners and the lenders on our panel as effectively as possible.”
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