Five takeaways from the fraud panel at SAS Innovate Madrid
There was a lot of buzz and excitement about SAS Innovate Madrid, taking place on 25 May. We heard considerable discussion about what people were looking forward to at the event. This included being able to meet colleagues, clients and others face-to-face again to talk about Innovation. We also heard about the excitement of hearing Inma Shara and her Virtuosi Camerata.
As an expert in Fraud, Compliance and Security analytics solutions, I would like to share my top takeaways that were discussed in the panel discussion entitled ‘Effective prevention of fraud and financial crimes in all sectors: fraud & security intelligence’. The panel featured Myriam Sánchez González, Cyber Resilience Iberia Lead, Accenture, Ignacio García, Socio de Risk Advisory, Deloitte, and Ignacio González, Vocal Asesor a la dirección General, Oficina Nacional de Investigación del Fraude (ONIF), AEAT, and was moderated by Emilia García, Senior Alliance Manager for Iberia at SAS.
- The panelists identified growing sophistication among financial criminals—but also in systems and techniques for fraud detection and prevention.
Myriam Sánchez González noted that cybercriminals have become increasingly sophisticated and organized. She also observed that globalization makes it harder to ‘follow the money’, and that customer demands for real-time payments were a challenge. However, the panelists agreed that using analytics and artificial intelligence (AI), and unifying data to get a 360 view of customers, could improve fraud detection. Other technology and tools also make fraud detection easier. It may even be possible to use cyberinformation in the fraud detection management process. Analytical models were certainly helping companies to stay ahead of fraudsters. However, it also helped that senior managers were more aware of the risks and inclined to be proactive in preventing fraud.
- Fraud is constantly changing, and therefore detection systems also need to change over time
Ignacio González from ONIF observed that fraud had changed considerably in the time that he had worked in the area of fraud prevention. He recalled reviewing paper lists and noted that the use of technology has made fraud detection much easier. He also noted that the adoption of technology, especially analytics, had been a gradual and ongoing process in his organization. There had been no ‘big bang’, just a steady progression. His view was that technology was largely helping fraud detection and prevention rather than cybercriminals.
- Deloitte had identified three different fraud prevention approaches for different types of organizations
The prevention and detection of fraud are among of the challenges that must be addressed to modernize any tax system. Deloitte is expert in the application of AI and machine learning solutions to detect and prevent fiscal fraud. However, Ignacio García was clear that this was not a one-size-fits-all approach. He observed that different approaches were needed for B2C, B2B and public administration organizations. B2C companies had to prevent fraud among their end customers. In B2B, the concern was more about cycles of payment to third parties. In public administration, the main challenges were in tax fraud, European funding, and public procurement.
- One of the biggest challenges in fraud prevention is managing ‘noise’
Ignacio González was asked about the challenges in fraud prevention from an official point of view, and how those could be addressed. He highlighted, criminals often got a lot of useful information from the media, especially news stories about fraud detection. It was therefore important not to give away too much when publicizing important cases and to try to control the ‘noise’ around fraud prevention.
- One of the best defenses against financial fraud is knowing your customers
Identity theft has become a main source of bank fraud and other financial crimes. Myriam Sánchez González noted that individuals and organizations are increasingly exposed to the risk of this because it is very profitable for criminals. She observed that it is essential for banks and other organizations to have good information about their customers, and particularly their digital footprints. This enabled them to take a more holistic view of their customers and be increasingly agile in responding to anomalies in behavior. In her view, it was essential to bring information together, and treat managing cybercrime and fraud detection as part of the same process.
