Jen Q. Public: Detecting fraud with advanced analytics

Digital Marketing Lead, Public Services Sector, IBM Analytics

June 11, 8:45 p.m.

Dear diary,

I laughed heartily when my Grandpa Ray announced that he was done with “these modern-day banks” and vowed to put all his money right back under his mattress. I chalked it up to the generation gap. But today even I’m seriously considering depositing my money with First National Mattress. While scanning my credit card bill, I found four fraudulent transactions originating from another state—the second time this year! So much for secure chip technology!

I mentioned my annoyance at the prevalence of fraud to my coworker and found that she, too, has seen erroneous charges on her account this year—in her case, made by perpetrators in London. And the credit card company says that every time it updates its systems, criminals find ways to breach it again.

Today fraud seems pervasive, whether it’s fraudsters taking up to 50 million in tax refunds, an IRS employee netting $326,000 from identity theft or fraudulent billing of the government for Medicaid. Most recently, government employees have been “warned of potential fraud after massive hacking of personnel files.” When will it end? How can we stay ahead of these criminals?

An IBM newscast shares ways to “detect new deception tactics, uncover multiple identities and identify suspicious behavior determine if an ‘action’ is potentially fraudulent before unnecessary deposits, withdrawals, transfers or payments occur.” The buzz is that advanced analytics is critical to minimizing fraud, and there may be something to that. Ted Bridenstine, Systems Development Manager at MoneyGram International indicated that the organization is able to “detect and respond to fraud far faster than before to protect our consumers as well as our global network of agents,” though he also warns, “We must remain ever vigilant in the face of more sophisticated financial fraudsters.”

I’m crossing my fingers in hopes that more financial organizations and government agencies leverage advanced analytics to detect fraud and respond to it more quickly, or my bed will become too lumpy to sleep on.