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

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

3. Evolution
Source: FBI

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

5. 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

6. 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

7. Practical Detection Strategies
The Classic Fraud Detection Model

8. Practical Detection Strategies
The Classic Fraud Detection Model

9. Practical Detection Strategies
False
Positive
Ratio
Point Of
Detection
Rate

10. 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

11. 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

12. 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

13. Practical Detection Strategies

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

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

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

17. Essential tools for the future
The Genuine Detection Model

18. 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

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

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

21. Collaboration for the future

22. Flipping the Fraud problem - KYC
Questions?