Technology Solution to Increasing Fraud Risks; with Fraud in the Midlands Running at Record Levels, Local Businesses Are Being Warned to Get to Grips with the Risks or Potentially Face Significant Losses. Jonathan Lovell, Head of Forensic at KPMG in Birmingham, Looks at the Role Technology Is Playing in the Detection and Prevention of Fraudulent Activity
Byline: Jonathan Lovell
The threat of fraud is increasing rapidly in the Midlands. In KPMG's Fraud Barometer, fraud in the Midlands reached pounds 380 million in 2008 - the highest value recorded since it began 21 years ago.
History teaches us that fraud increases in times of economic hardship, so this threat will only grow in the current environment.
It is therefore vital that local businesses exercise heightened vigilance in this area.
Businesses also need to appreciate that the more professional fraudsters can be very sophisticated in deploying new techniques to beat existing controls.
As a result, fraud prevention measures that may have been adequate in the past may no longer be sufficient in the future.
When you add to this the potential threat of cutbacks on administration and management spending, there is the possibility of new gaps opening up in the systems and controls that may quickly be exploited by fraudsters.
With this in mind, it is important that businesses review the fraud risks they face and the adequacy of existing fraud risk management procedures.
By reviewing their high risk and key operations, having effective reporting channels and deploying appropriate prevention and detection controls, they give themselves a better chance.
One key area is the use of technology in identifying and guarding against fraud, misuse and abuse. The signs of this activity and the key to its detection often reside within the business itself - hidden in the data generated by its dayto-day operations. Advanced analytical tools and techniques can unlock the value hidden within the data and identify the complex patterns and subtle indicators of suspicious and improper activity. …