Fraudsters’ increasingly sophisticated methods in their intent to steal taxpayers’ money by any means necessary is an ongoing battle for legitimate businesses and organizations, and one that many are struggling to win.
More than 5 million cases of fraud and computer misuse offenses were recorded in the UK last year, according to the Office for National Statistics, while the National Audit Office revealed that fraud is now the most commonly experienced crime in England and Wales – accounting for nearly one-third of all crime (31%).
The public sector is not exempt from this, with a CIPFA report into fraud and corruption finding that over £325m worth of fraud was detected or prevented in the public sector in 2015/16. Furthermore, 97.3% of public sector workers claimed that fraud is an issue that the government needs to address – a study revealed nearly four in five employees (78.5%) believe fraud is a concern within their organization. And that’s not all – one-third of employees do not believe their organization has an effective solution in place for detecting and preventing fraud.
It’s clear that fraud is a major issue undermining the effectiveness of programmes and missions across government, and could have a major effect on building and maintaining public confidence.
That’s why countering fraud is an important priority at all levels of the public sector.
While the problems are clear, the solutions need not be. Government organizations have data, but they often struggle to use it in the right way. In this blog, I look at how the public sector can overcome these challenges and draw on data to fight fraud in real-time.
Combating the threat of fraud
One of the most vital things that public sector organizations are sometimes lacking in their attempts to combat fraud is real-time detection of attacks, which would enable them to uncover hidden trends and patterns that are unavailable with legacy technology solutions.
The aforementioned research finds that staff in public organizations are demanding more sophisticated, super-fast, data-driven capabilities – the upshot of which means embracing real-time detection and powerful big data analytics.
Australia’s Department of Human Services has done exactly that by replacing its aging legacy system with a rapid rollout of a fraud management program. Fraud was costing the Australian government around $600 million annually. Therefore, the agency, which is contacted by 1 million Australians every day regarding social benefits, replaced its archaic interfaces, databases, and workflows to help it comply with established policies.
This made the systems easier to use, provided consistent data and automated processes that made fraudulent activity easier to track. DHS employees are therefore able to monitor active cases more effectively, and ultimately are able to see more referrals result in prosecution thanks to the increased insight and enhanced data integrity and protection.
Data defeats the fraudsters
As the mountain of records and data that UK public sector organizations have on file continues to grow across disparate systems, it becomes increasingly difficult to understand and gain value from it. But the fact that they have the data in the first place is a good start. The missing piece is the ability to analyze it, see it in context and actually gain insight from it. Which is how governments can start using what they know to improve what they do.
To get this started, and to effectively combat fraudsters, it’s key to create an end-to-end strategy that covers both internal processes and external threats. This will enable better access to real-time data, which will, in turn, enable them to consolidate and work with large volumes of data sets that can be used for efficient detection, investigation, and predictive analytics. It’s also vital to clearly define employees’ duties and access to data, applications, and processes to further reduce risk across the organization and make it easier to detect and remedy violations.
Any effective fraud management process rests on identifying and assessing potential risks. It’s only when these are fully understood that the necessary policies, controls and organizational measures to monitor and mitigate them can be implemented. Governments have the data they need to do all of this. What they’re missing are the tools to turn info into insight.
For more information on how to reduce your organization’s risk of fraud and how SAP’s solutions can help you, download our whitepaper on fighting Public Sector fraud.