Insurance and Technology had a great set of posts on fraud detection and analytics - Emerging Technologies Fight Claims Fraud. In particular I liked the fact that they covered both the use of data mining and analytics to support investigation and the use of predictive analytics in individual transactions. While I tend to focus on the use of analytics in the context of transactions, there are many ways to use analytics in fraud detection:
- Helping a human investigator understand what the data they have is trying to tell them
- Helping a business owner understand cut-offs and thresholds that should be embedded in their business rules to route potentially fraudulent claims to investigators
- Showing the impact of changes to the way claims are handled to avoid unexpected outcomes - like too many referrals for review
- Calculating the probability that a specific transaction is fraudulent so that it can be dealt with appropriately
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It is good thing that people are making use of technology to assist us in combating fraud. There are many kinds of fraudulent activities nowadays and it does not only occur with credit and medical records anymore. Unlike these documents that can be shredded by a Houston shredding company, digital data can be uploaded and shared worldwide. It has expanded to social networking sites as well as other software programs used in computers. This is why we need to be extra careful in handling our personal information.