Flipping the fraud problem – know your customer 2015 Claims Leakage and Fraud Forum March 4th 2015

Flipping the fraud problem – KYC Evolution Practical Detection Strategies Essential tools for the future Collaboration for the future The Authentication Challenge Questions

Evolution Source: FBI

So why is this bank guy talking about Health Insurance fraud? Evolution So why is this bank guy talking about Health Insurance fraud?

Because we both do the same thing? Evolution Because we both do the same thing? On-board Authenticate Transact The right customer gets the right money

Practical Detection Strategies The Classic Fraud Detection Model Claim Alert SUSPICION KNOWN DATA ELEMENTS Inception Period Demographical Information Claim details Claimant and third party details

Practical Detection Strategies The Classic Fraud Detection Model

Practical Detection Strategies The Classic Fraud Detection Model

Practical Detection Strategies False Positive Ratio Point Of Detection Rate

Practical Detection Strategies Seize control back from Business Technology. Uplift in effectiveness Control timeliness Employ analysts who have the skills and drive to pro-actively detect fraud. Use all data elements available to you in rule design. Own, know and understand your data. False Positive Ratio Point Of Detection Rate

Practical Detection Strategies Structure matters. Rule Naming Conventions make work fun. Diversity of operations provides a challenging work environment. Suncorp detection officers look after: Card Fraud Internet Fraud Loan Application Fraud ….all banking fraud detection When they aren’t detecting fraud they: Deliver Fraud awareness training Undertake project work Officers are involved in the process. False Positive Ratio Point Of Detection Rate

Practical Detection Strategies Management of all 3 components will ultimately drive down the number of alerts without compromising your detection effectiveness. Suncorp has enjoyed a 68% decrease in the number of fraud detection alerts generated over the last 5 years through close management of the 3 pillars. Current statistics for Card Fraud are: Detection Rate > 98% False Positive Ratio < 6:1 Point of Detection < 2.2 False Positive Ratio Point Of Detection Rate

Practical Detection Strategies

Bank Card Crime Evolution Multi-layered organised crime syndicates RISK Carders/Darkweb Petty theft 1960 2000 2010 2020 TIME

Insurance Crime Evolution Multi-layered organised crime syndicates RISK Staged Accidents False Claims 1960 2000 2010 2020 TIME

The risk landscape is rapidly changing Risk Evolution The risk landscape is rapidly changing

Essential tools for the future The Genuine Detection Model

Essential tools for the future Fluid analytics which can model on the fly Real time intelligence sharing Real Time Fraud Intervention Intervention in only high-risk transactions Detect more complex fraud indicators such as authentication bypass

Essential tools for the future CGI False Positive Ratio Detection Rate Point Of Detection

The Authentication Challenge Invisible Authentication 3 Factor Authentication SECURITY 2 Factor Authentication Static Passwords CUSTOMER EXPERIENCE

Collaboration for the future

Flipping the Fraud problem - KYC Questions?