June 29, 2018

A blog post by Don Fancher, US and Global leader, Deloitte Services LP.

Recent Deloitte blogs have discussed how the application of data-driven analytics to transactions can help improve fraud-fighting capabilities, as well as how to address challenges associated with vast amounts of data. Analytics technologies used to extract and realize data’s value are an equally important consideration that present their own challenges. Legal and compliance organizations can apply and integrate technology more effectively by understanding those hurdles and taking a strategic approach to clearing them.

Advanced analytics are making inroads into fraud investigations, but legal and compliance organizations continue to use various legacy systems to perform data-intensive reviews. Analytics use cases tend to be ad-hoc ventures, typically performed by vendors. Tools are still maturing, a state that often complicates long-term planning and investments.

A legal or compliance team that aims to elevate its fraud-fighting analytics technology capabilities can expect to encounter several challenges in the effort, including:

• Existing technology may not be adequate and replacing it isn’t easy;
• Current operating structures don’t yet align with the tools;
• Investigation professionals may not know how to use, or may resist using, new technology; and
• Outsourcing can lock the organization into a vendor solution

Some keys to better fraud technology

The keys to achieving better fraud technology include strategy, people, process, and data considerations. Strategy defines the business problem to be solved. People get the technology solution up and running. Process comprises the steps in solving the problem. Data informs activities across the ecosystem.

Strategy. Thinking through the dynamics of fraud threats and how to respond to them can be invaluable in developing a solution roadmap and testing framework ahead of technology acquisition. A common approach involves establishing a proof of concept based on a new risk, regulatory gap, or recent industry issues, and—based on the results—newer, longer-term solutions can be scaled up over time.

People. With the affected business unit taking the lead, other organizational stakeholders should be involved in determining who will use the technology for development of analytics and review of results, how they will be trained, and how usability and accessibility issues will be addressed.

Process. Understanding which processes will need to change and how they need to change is essential in formulating a solution roadmap. Particular attention should be paid to how the solution will be sustained, including creation of a feedback loop that helps guide technology enhancements and adjustments in how people do their jobs.

Data. Data needs to be analyzed and interpreted in the context of the business problem being solved. Some basic components to be considered include data management, data and text mining, case management, and robotic process automation. 

Technology alone cannot remedy every regulatory or forensic issue. An organization also needs a team that understands the tool, can ask the right questions, involves key stakeholders, and leverages the results to fight fraud effectively. 

Read our latest report to learn more and stay tuned for our next blog post.

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