Connecting the Dots: Detecting Fraud Through Big Data
Understanding and insight is everything in the world of modern business, which is becoming more and more driven by digital tools and means. Where might this insight come from? Increasingly, it’s coming from Big Data; the data sources, data points, patterns, and data structures that a company can use to gain insights which then can be used to take a business to the next level.
This is now a well-trodden path. Big Data management is no longer a big secret; it is a necessity for businesses who want to get ahead. But is this the whole story? Is there more to Big Data than this?
Yes, there is. Big Data has become a key factor in the fight against fraud. Here’s how it is being leveraged by companies today that want to connect the dots in an effort to fight fraud.
Historical Analysis
One of the most important elements in fighting fraud involves spotting patterns and clues that point to fraudulent behaviour. Of course, with so much information to draw upon, companies have found themselves data-resource rich but insight-poor. So, what is the answer?
Big Data analytics. This is the only way to approach such a vast amount of data and then to analyse and cross-reference that data against current activity. Making the connection between a current claim or transaction and a pattern which has been associated with fraud in the past is a major step towards staying secure.
Utah-based Zions Bank is a great example of how this can effectively be put into practice. The financial institution identified a severe issue with cross-channel fraud and realised that an integrated understanding of behaviours across all channels was necessary. Analytics has helped them to achieve that, matching up examples of fraudulent behaviour across multiple channels and reducing annual losses to fraud.
Staying Big
Big Data is Big Data for a reason. In the past, organisations tended to summarise or dilute their data, simply because the level of storage required was unavailable or prohibitively expensive. This left gaping holes in fraud prevention strategies; holes which could easily be exploited by fraudsters.
Not anymore. The advancement of cloud computing and increasingly refined data storage structures have made it easier than ever before for companies of any scale to store and wield data in its entirety. This means having the potential to see the bigger picture all the time and staying several steps ahead of the bad guys. And, with innovations in Big Data collection and interpretation tools, the use of data analytics to combat fraud and other types of digital crime is becoming a reality for more and more businesses.
Artificial Intelligence and the Future of Big Data
The beauty of Big Data is not only that it is continuing to evolve, but that it is evolving at such a rapid pace. As capability grows, businesses are finding new and exciting ways to apply that capability directly to their business practices and protocols.
This is where artificial intelligence comes in. Through machine learning and semantic processing, analytic systems can begin to understand the different types of interactions that users make and what different behaviours signify. This enables the system to recognise and flag a potentially fraudulent activity, and also to predict fraudulent activities in the future. This capability is not only restricted to the organisation’s internal data, but can incorporate publicly available data such as personal information, demographic data, blogs, and news reports.
This technology is already being employed in the world of cyber security, preventing malicious access to systems by unwanted applications or users. However, it also has an obvious application in fraud prevention for businesses.
The key for advanced analytic systems is merely data. Provided that data is being appropriately captured and obtained from whatever sources and across a range of online and offline channels, the intelligent software can do its work. The result is a robust and reliable layer of evidence assisting in fraud prevention and business intelligence insights.
The data is there; business owners now understand this. What comes next is effective leverage of that data. Tools such as Latize Ulysses can handle this for you, interpreting and translating your data into a language and knowledge base you can understand and use to build your defences against fraud and improve your business governance processes.
