The latest anti-fraud technology study by the Association of Certified Fraud Examiners (ACFE) and SAS revealed that anti-fraud professionals are doubling down on analytics against the onslaught of seemingly endless schemes and scams.
Notable trends
- More than 40% of respondents reported accelerating their use of data analytics significantly (14%) or slightly (29%) amid the pandemic.
- 60% expect their anti-fraud tech budgets to grow over the next two years.
- Advanced analytics topped the investment list, particularly artificial intelligence (AI) and machine learning (cited by 26% of respondents) followed by predictive analytics/modelling (22%).
Bruce Dorris, J.D., CFE, CPA, President and CEO of the ACFE, noted that increased reports of fraud are not going to slow any time soon.
He advised that to stay ahead of not only the increased volume of fraud instances but also emerging trends, it’s critical for organizations to be flexible and proactive in adopting new anti-fraud tools and processes.
Takeaways
Analytics is an indispensable fraud detection tool.
When asked about their use of analytics, nearly all survey participants indicated their organization’s use of data analytics was beneficial in helping them boost the volume of transactions reviewed or suspected fraud cases identified (99%); the timeliness of their anomaly detection (98%); their efficiency in automating time-consuming tasks (98%); and their overall accuracy in reducing false-positive rates (97%).
“Even as proliferating online and digital channels have heightened risks and created lucrative new avenues for criminal exploitation, there’s a silver lining,” said Stu Bradley, senior vice president of fraud and security intelligence at SAS.
He added that these same channels allow organisations to capture droves of data that can be integrated to better monitor trends and, ultimately, take a more preventive stance against rapidly shifting threats.
Data-sharing consortiums are gaining momentum.
Internal structured data sources remain the crux of most organizations’ anti-fraud analytics initiatives (cited by 80% of respondents), but many are also tapping a variety of external data sources, including public records (41%), law enforcement or government watch lists (31%), social media (29%), other third-party data (25%), and data from connected devices (25%). Moreover, 34% of respondents reported they contribute to data-sharing consortiums – and another 24% indicated that, while they do not currently contribute, they would be willing to do so in the future.
A variety of emerging technologies to fight fraud
The report highlights the growing use of technologies like physical and behavioural biometrics, computer vision analysis, robotic process automation (RPA), blockchain, and virtual and augmented reality. The current use of these technologies ranges from 7% (virtual/augmented reality) to 34% (physical biometrics) of surveyed organizations. Among respondents from organizations not using particular emerging technology, 13% (virtual/augmented reality) to 19% (RPA) expect to deploy it within the next one to two years.
An unpredictable predictable future
“Resoundingly, the anti-fraud professionals surveyed said analytic technologies are helping them identify more fraud more quickly and accurately,” said study co-author Andi McNeal, CFE, CPA, director of research at the ACFE.
She opined those time-tested techniques like exception reporting and anomaly detection remain mainstays yet growing tech budgets and the 150% leap in AI adoption anticipated over the next two years signal that organisations aren’t resting on their laurels.
She expects the landscape to look quite different on the next survey scheduled for 2023.
