In June 2016, independent auditing company Audit Scotland uncovered almost £17m lost to fraud and error. The startling find was only discovered thanks to the organisation’s biennial National Fraud Initiative (NFI), which involves local authorities and other public bodies sharing data between them. This exercise of identifying inconsistencies across large data sets is not limited to large organisations. The rise of big-data analytics, means that any business can now benefit from actionable insights into the overwhelming quantity of data now generated.
Here, Greg Richards, Sales and Marketing Director of business intelligence specialist Connexica, explores how councils and organisations can bring together service data to reduce both costs and the prevalence of fraud.
Fraud has been a recurring problem for UK local authorities in recent years. In 2013, the now-disbanded National Fraud Authority (NFA) reported that fraud cost the country a total of £52bn that year. That same year, it was reported that a fifth of London council tenancies showed indications of fraud.
It is easy to identify the high incidence rate of fraud, but it is significantly more challenging to identify fraud itself. Although the UK Government produces financial year estimations of what percentage of benefits and services are fraudulent, these are simply estimates. In reality, the figure could be much higher.
However, the reason so many incidents slip under local authority radars is due to a lack of resources to provide extensive analysis. For example, housing benefit fraud is often discovered by cross-referencing service bills, such as utilities, banking or even council tax, with housing records. Inconsistencies in this data flag up potential fraud cases.
It is the cross-referencing of this data that is difficult. Traditionally, local authorities have stored accumulated information in rudimentary databases and, sometimes, even Excel spreadsheets. This makes the process of extracting insights tedious and time-consuming, which is further exacerbated by the high volumes of data that is generated in our big data-driven society.
Likewise, more advanced analytics requires the need for specially trained personnel to make sense of the data. This means councils will either need to invest a large sum of money in extensively training certain members of staff or alternatively spend even more in hiring a data analyst. As local authorities are regularly subject to budget cuts and expected to do more with fewer resources, neither option is desirable.
In order to combat this, there needs to be a technological shift towards what we call the democratisation of business intelligence. This calls for an understandable means of interfacing with accumulated data, allowing most staff within an organisation to gain actionable insight from their business intelligence — all without the need for specialist analysis.
Software such as Connexica’s CXAIR achieves this by replacing the traditional dashboards of incomprehensible raw data with a search-powered business analytics approach. Essentially, the software creates a Google-type approach to navigating and bringing together data streams on one dashboard, while still allowing for visualisations such as graphs to be subsequently generated. The software draws from a large variety of data sources, such as council tax records and parking permits, to allow extensive cross-referencing.
This kind of approach makes the information easy to understand for staff from junior management to C-suite, letting organisations spend less time making sense of data and more time using it to make decisions. In fact, local authorities in Kent are already using CXAIR to achieve a range of business objectives, including for counter-fraud purposes. It has even been used to reduce the costs associated with processing payments for council services.
If we are to learn anything from Audit Scotland’s discovery, it is that the best means of combatting fraud and its associated costs is by making effective use of business intelligence. Fortunately, a local authority’s greatest asset in doing so is the inescapable quantities of information generated daily — councils simply need to connect the dots.