Insider Fraud Laura Hutton SAS detecting the invisible The new - - PowerPoint PPT Presentation

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Insider Fraud Laura Hutton SAS detecting the invisible The new - - PowerPoint PPT Presentation

Jul 27, 2023 159 likes •505 views

Insider Fraud Laura Hutton SAS detecting the invisible The new fraud landscape & the rise of the insider How to rob a bank How to detect fraudulent staff Fraud is a global problem Typical organisations lose 5% of revenues Source:

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Laura Hutton SAS

Insider Fraud

detecting the invisible

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How to rob a bank The new fraud landscape & the rise of the insider How to detect fraudulent staff

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Fraud is a global problem

Source: Association of Certified Fraud Examiners
  • Typical organisations lose 5% of revenues

to fraud each year

  • Estimated to be a global loss of more

than $3.5 trillion

  • Industries most commonly victimised:
  • Banking & Financial Services
  • Government and Public Administration
  • Manufacturing Sector
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Tough challenges for

  • rganisations

Organisations are faced with tough challenges to focus on reducing losses AND ensure a smooth customer journey AND take effective, timely action.

Potential projected global fraud losses related to

  • ccupational fraud are more

than $3.5 trillion USD.

ACFE 2012 Report to the Nations

“Cyberthieves have cost US companies and their banks more than $15 billion in the past five years, the FDIC found in a recent study.”

Financial Times, 2012

Estimated global financial crime IT spending will grow to $4.3 billion USD by 2013.

Chartis Research

In the UK, estimates show that 55% of fraud – a massive £21 billion – is committed against the public sector .

National Fraud Authority

The global AML market is currently at $450 million USD, will grow at a CAGR of 9%, reaching $690 million USD in 2015.

Aite Group 2011

Tax evasion losses are estimated at $3.1 trillion for 145 countries in the world which represent 98% of the world GDP between them.

The Tax Justice Network
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Today’s frauds are

Increasingly sophisticated Higher velocity/faster Cross industry Multi channel Advanced technologies Social with pressures on staff

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Current fraud systems are not good at finding insiders:

Siloed by line of business - No sharing of data Act on event or customer Rules and predictive models alone have limitations Few proactive steps taken to combat cross channel fraud Evidence insufficient to act upon Investigation time consuming

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Today’s schemes are Internal fraud and collusion are on the rise

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Why is insider fraud so hard to spot ?

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75% of all major fraud cases involved insiders

KPMG Australia 2012 survey

Statistics

75%

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Today’s schemes are

Financial losses Reputational Risk

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Real Fraud

Would make a terrible heist movie!

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How to rob a bank

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The perfect heist requires:

  • Advanced safe cracking
  • Mountain climbing
  • Kung Fu
  • Computer hacking
  • CCTV hacking …
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Or …

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Get a job at the bank … … or better still

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Get to know someone who has a job at the bank

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Insider fraud is the low risk, high reward crime of choice for modern

  • rganised criminals
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Mortgage fraud

The FBI Estimate, Washington Post, Dec 11

80%

How many mortgage fraud cases involved collaboration with industry insiders?

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What is internal ‘fraud’?

Favouring applications from a friend Stealing money from a dormant customer account Searching the account

  • f a

favourite team Giving themselves credit to cover debts Searching for information

  • f use to a

competitor

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Intervention strategy is key to success

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Fixing Fraud

How to detect staff behaving badly

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Fixing Fraud

How to detect staff behaving badly Avivah Litan, VP Gartner

"Security and fraud risk exposure is increasing as organizations are threatened at multiple points of vulnerability. Companies are re-evaluating how they tackle security since a fragmented approach is consistently leaving organizations at greater risk of attack. A more holistic approach to security ensures all layers

  • f protection function together.“
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Detection

3 step programme

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Step 1

Train your staff to spot the signs of social engineering and Organised Crime recruitment.

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Step 2

Recognise that none

  • f your external

fraud detection systems are likely to find an insider – they already have the keys to the safe!

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Step 3

Adopt a holistic “defence in depth” approach to the problem. Identify data sources that will enable you to distinguish staff behaviour.

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Make better use of your data

Network Entity Event

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Understand the risks

Theft from customers Credit Abuse Breaches of policy Money laundering Data theft Procurement fraud Expenses & Payroll Trading fraud

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Hybrid Analytics

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SAS Fraud Framework

The fraud threat landscape

Hybrid Analytics

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SAS Fraud Analytics

  • Reduce reputational risk
  • Through more accurate identification of high risk employees
  • Reduce exposure to operational risk and fraud committed by employees
  • More suspicious cases identified
  • Fraud identified earlier
  • Reduction in false positive rates
  • Improved investigation efficiency
  • Create extensible solutions
  • Fraud grows and changes over time - your solutions need to be able to evolve

faster

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Demonstration

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Questions & Answers

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For further information

WWW.SAS.COM