Detecting fraud

The rise of data analytics

So how do you stop an economic crime in progress — or better yet, before it happens?

Methods of fraud detection usually fall into one of three categories: corporate controls, corporate culture, or beyond corporate control. The figure below displays how the major fraud at responding organisations was detected.

Share Facebook Twitter Google+ Linkedin

Note that the percentage of fraud detected through suspicious transaction reporting and data analytics increased by over one third, from 18% to 25%. Moving forward, we expect more organisations to build on this success story, and use leading data analysis tools to help detect and mitigate fraud.

The Enemy Hiding in Plain Sight

Practitioners commonly refer to a “Fraud Triangle” — the three elements that are often present when a perpetrator commits fraud: pressure, opportunity and rationalisation.

Three quarters (73%) of our respondents indicated that the opportunity or ability to commit the crime was the factor that most contributed to economic crime by an internal fraudster. Of the three factors, opportunity is the one most within an organisation’s control. While life’s pressures and the ability to rationalise may swirl around employees, if an organisation can limit the opportunity, they may be able to more often stop the fraud before it starts.