Date post: | 13-Jul-2015 |
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Data & Analytics |
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Jerry Chetty
Myths About Data Investigation
THE WORLD WE LIVE IN Speaker 3 of 17
Followed by
Gary Hope
@4JerryC
Facts about fraud
• Fraudsters do not discriminate • No organisation is immune from fraud • It’s not about if, but rather when
• Fraudsters love big data – the more, the merrier! They use big data to camouflage their fraud!!!!
Investigations in data heavy industries
INDUSTRIES WHO CARRY AND PROCESS BIG DATA The following are some examples: • Banks • Telecommunications • Retailers • Insurers • Government departments
Cost of insurance fraud
NO ACCURATE MEASURE OF INSURANCE FRAUD The following are some of the calculations/estimates: • Internationally insurance fraud = 7-15% of gross written
premiums • 2011 UK insurance fraud = 1billion pound, ABI (2012) • UK – fraudulent claim exposed every hour LOCALLY: • SAIA says 10% of claims amount contains an element of
fraud = R2-3billion
Insurance process flow chart: Structured & Unstructured Data (250 million lines of data)
4. CLAIMS PROCESS
SOS
INTER- MEDIARY
INFLATED
FALSE CLAIMS
BACKDATING OF COVER
CHANGING CIRCUMSTANCES OF CLAIMS
SUBMIT FALSE CLAIMS ON CLIENTS POLICY
2. ISSUE POLICY
3. PAY
PREMIUM
DEBIT
ORDER (D/O)
INTER- MEDIARY
THEFT OF PREMIUMS
CONTRAVENTION OF S45 of STI
1. SELL COVER
CONTACT
CENTRE SANTAM
MANDA-TED
INTER- MEDIARY
PREVIOUS CLAIMS
SECURITY REQUIREMENTS
UNDERWRITING FRAUD
FRAUD
MATERIAL AFFECTS FACTS
PREMIUM
UNDERWRITING FRAUD
5. ASSESOR
INTERNAL EXTERNAL
6. SERVICE PROVIDER
CORRUPTION
FALSE INVOICES
INFLATED REPAIR COSTS (FALSE CLAIMS)
INFERIOR REPAIRS
SUPPLIER FRONTING
Insurance process flow chart
4. CLAIMS PROCESS
SOS
INTER- MEDIARY
INFLATED
FALSE CLAIMS
BACKDATING OF COVER
CHANGING CIRCUMSTANCES OF CLAIMS
SUBMIT FALSE CLAIMS ON CLIENTS POLICY
2. ISSUE POLICY
3. PAY
PREMIUM
DEBIT
ORDER (D/O)
INTER- MEDIARY
THEFT OF PREMIUMS
CONTRAVENTION OF S45 of STI
1. SELL COVER
CONTACT
CENTRE SANTAM
MANDA-TED
INTER- MEDIARY
PREVIOUS CLAIMS
SECURITY REQUIREMENTS
UNDERWRITING FRAUD
FRAUD
MATERIAL AFFECTS FACTS
PREMIUM
UNDERWRITING FRAUD
5. ASSESOR
INTERNAL EXTERNAL
6. SERVICE PROVIDER
CORRUPTION
FALSE INVOICES
INFLATED REPAIR COSTS (FALSE CLAIMS)
INFERIOR REPAIRS
SUPPLIER FRONTING
Our case study – Investigating in numbers ELECTRONIC FUNDS TRANSFER FRAUD • R22 000 only one incident • Sufficient evidence to prove this • Great case solved! • Or is it? • Enter Santam Sherlock Holmes and Data Mentalist • Extract claims data processed by alleged fraudster = 20 000 lines (Overwhelming) • Traditional analysis = Investigation = zero results (Frustration) • Profile existing fraudulent transaction and alleged fraudster • Refine analysis = Investigation = What’s in a surname? = R1.4m
DOES LIGHTNING STRIKE IN THE SAME PLACE TWICE? • Extract claims data for entire department = 60 000 lines • Analysis = Investigation = R1.2m fraud
Learning's
• Huge opportunity for using data in investigations - Uncover more fraud - Provides most accurate financial impact of fraud incident - Develop detective and proactive anti fraud strategies
• Results from any form of data analysis does not prove FRAUD • Still need hard-core investigations • Having an inventory of data sets
• Need the skill of both an investigator and the data mentalist – collaborative effort • Using one person to execute both functions is NOT a collaborative effort • Data heavy is the way of the future – need to embrace its usefulness
FRAUDSTERS DO – THEY UNDERSTAND THE USEFULNESS OF BIG DATA AS A MEANS OF CONCEALMENT FOR THEIR ACTIVITIES!
Insurance process flow chart
4. CLAIMS PROCESS
SOS
INTER- MEDIARY
INFLATED
FALSE CLAIMS
BACKDATING OF COVER
CHANGING CIRCUMSTANCES OF CLAIMS
SUBMIT FALSE CLAIMS ON CLIENTS POLICY
2. ISSUE POLICY
3. PAY
PREMIUM
DEBIT
ORDER (D/O)
INTER- MEDIARY
THEFT OF PREMIUMS
CONTRAVENTION OF S45 of STI
1. SELL COVER
CONTACT
CENTRE SANTAM
MANDA-TED
INTER- MEDIARY
PREVIOUS CLAIMS
SECURITY REQUIREMENTS
UNDERWRITING FRAUD
FRAUD
MATERIAL AFFECTS FACTS
PREMIUM
UNDERWRITING FRAUD
5. ASSESOR
INTERNAL EXTERNAL
6. SERVICE PROVIDER
CORRUPTION
FALSE INVOICES
INFLATED REPAIR COSTS (FALSE CLAIMS)
INFERIOR REPAIRS
SUPPLIER FRONTING
Hiding within those mounds of data is knowledge that could change the life of a patient, or change the world.” Atul Butte, Stanford School of Medicine
“Without big data, you are blind and deaf in the middle of a freeway” Geoffrey Moore, management consultant and theorist
“Information is the oil of the 21st century, and analytics is the combustion engine.” Peter Sondergaard, Gartner Research