Technology unused in combat against fraud

KPMG has released an interesting finding on technology, fraud, and anti-fraud efforts, with somewhat strange results.

It says that a quarter of fraudsters are using technology to 'rip off' companies (leading to the conclusion that three quarters are not). But what's even more interesting is that just three per cent of businesses have detected fraud using data analytics.

It also says that, out of those fraud attempts which were spotted, 24 per cent have been spotted by accident.

KPMG believes businesses would be much better protected using data analytics to track patterns of behaviour, and build risk profiles by aggregating unusual behaviour.

That 'unusual behaviour' includes incomplete expense submissions, authorisations consistently below thresholds, and high levels of changes to standing payment data.

Instead, they’re opting for more traditional measures. They’re relying more on employees, third parties and suppliers to report suspicious behaviour.

Almost half (44 per cent) of fraudsters have been caught after a tip on the whistleblowing hotline, and KPMG says it shows just how important it is for employees to feel safe reporting these things.

“As technology becomes more advanced, so too do the schemes to use it maliciously. And while it’s clear that fraudsters are all too comfortable using technology to perpetrate a fraud, we are seeing little evidence that companies are doing the same in response to prevent it,” says Alex Plavsic, head of investigations at KPMG in the UK.

“A shockingly small number of companies have invested in threat-monitoring systems and data analytics, which can shift through data looking for suspicious items and help businesses uncover and question anomalous or suspicious behaviour.”

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