As we embark on the New Year, resolutions abound. For 2013, consider what you are going to do in the area of fraud prevention and detection. With the prevalence of data, whether big or small, I would suggest incorporating data mining into your fraud detection and prevention procedures.
Data is an Opportunity
Rather than view the incredibly large data sets your organization generates every day as a challenge; view them as an opportunity. You can leverage this data to enhance your fraud detection and prevention efforts – increasing both effectiveness and efficiency. That is a great resolution to start any year.
Why Data Mining
As an investigator, I have my reasons for using data mining for fraud detection and prevention:
- Effectiveness – data mining allows for 100 percent coverage and testing, rather than relying upon sampling and extrapolation
- Efficiency – data mining an entire data set can generally be accomplished in the same amount of time, or less, than sampling and reviewing transactions manually
- More comprehensive testing – analyzing an entire data set with electronic procedures allows you to identify patterns, trends and relationships between multiple data sets
Spreadsheet and database programs enable basic analyses. However, they restrict you from completing more complex and thorough analyses. ACL Desktop provides many important functions for data mining:
- Data integrity – when investigating allegations of fraud, data integrity is critical; ACL Desktop safeguards the data within the program, so it cannot be changed or altered
- Data manipulation – while data cannot be changed, the many conversion and string access functions within ACL Desktop allow you to isolate, extract and utilize critical attributes contained within various data fields
- Comparability – numerous commands and functions within ACL Desktop provide the ability to compare datasets based on a single, or multiple, criteria to determine relationships, potentially omitted items or other unknown commonalities between datasets
- Benford’s Law – when trying to identify unusual concentrations of amounts or potentially fictitious data sets, Benford’s Law is a very powerful tool
When choosing a resolution to help you enhance your fraud detection and prevention efforts, resolve to incorporate data mining into your efforts. Increases in effectiveness and efficiency are a great way to start the year.
To learn more about data mining with ACL, register for the 2013 ACL Connections Customer Conference, and hear Jeremy speak on Uncovering Fraud, Waste and Abuse – Developing Your Game Plan