The world economy is experiencing a pivotal year in 2020. The COVID-19 outbreak has tremendously affected most areas of financial activity across the globe. The IMF predicts a significant chance for steep negative economic growth as a result of the pandemic.

One important source of financial risk during these times is the rise of fraudulent activity. We are seeing novel fraud patterns that exploit the vulnerabilities of people and organizations that are insufficiently ready to adapt to the new reality. Along with the impact of COVID-19, an increasing number of government authorities are enforcing ever-stricter requirements for regulatory compliance – for example, requiring real-time monitoring of banking transactions for money laundering.

Taking new steps down a known path

SAS experts have already discussed several of the above points:

• Manuel Rodriguez described how compliance and fraud operations are converging and outlined the challenges around this trend.
• Carl Hammersburg’s blog post touched upon a specific need that the pandemic created, related to the sensitive topic of fraud in state-provided employment benefits, even before the outbreak of COVID-19 and the huge pressure it put on health care.
• Laurent Colombant analyzed procurement fraud in this crucial sector and how analytics could help to detect and prevent it.

It’s safe to say that SAS has great experience in applying analytics for fraud and compliance purposes. Anna Lykourina recently presented a great summary of the latest technological advancements in fraud analytics, which indeed can significantly enhance results in this area. However, cutting-edge technology can only do so much to boost detection practices. And it is only a piece of the puzzle. Another crucial piece is business knowledge, the expertise that translates real-world situations into the content that fuels advanced technology in order to produce optimal results.

Combining technological prowess and business expertise

In an effort to bridge the gap between these two pillars, SAS recently joined forces with the Romanian branch of Deloitte, one of the world’s leading consulting firms. Together we co-organized a series of webinars in April 2020 with the aim to bring market players up to date with the latest capabilities in this field.

These webinars covered three crucial topics: anti-money laundering, advanced analytics for enhanced fraud detection, and the use of analytics in extended use cases. We designed the content to provide audiences in the Romanian market with a combination of expert business knowledge for fraud and compliance from Deloitte’s forensic services and a showcase of the latest analytics technology advancements from SAS fraud and security intelligence experts.

This joint initiative is basically the recipe for success in every fraud and compliance engagement – at least if the business needs fall anywhere outside the simple or obvious concerns.

Advantages of business plus tech

Utilizing a knowledgeable consultant with serious expertise is a guarantee that you can tick all compliance boxes and meet all industry best practices. Technology has gone a long way to provide organizations with ways to detect abnormalities in data, spot hidden links between people and events, and block fraud before it can happen. However, even the most advanced systems cannot compensate for a lack of guidance in the processes to be followed from a purely business perspective, and how suspicious activity should be treated.

That’s why having valuable insight on complex fraud schemes, such as “CEO fraud," and how these can be addressed from a business and procedural perspective, can have an impact. Having this means that we can then leverage the actual means to achieve the best possible results, starting from common use cases, up to very complex techniques that fully utilize artificial intelligence, machine learning and other advanced technologies.

It’s also important to keep in mind that fraud and compliance are gradually coming together, at least in terms of the technical means (systems, techniques, etc.) used, but also in terms of the regulatory requirements. Although the relevant processes, teams and divisions within organizations are still siloed, it’s no longer effective to maintain isolation between the two.

Value of collaboration

To put it succinctly, the outcome of the engagement between SAS and Deloitte (both within the aforementioned webinar series, but also in every other opportunity) is that it’s imperative for organizations to stop looking at anti-fraud and compliance as two different structures within an organization – and try to imagine the tremendous results that can be achieved through a harmonious and well-planned collaboration within financial institutions.

It’s critical to ensure collaboration at a structural level (i.e., at the human level) and collaboration from innovation through advanced technology and digitisation. And by combining business expertise and technical power, it’s much easier to form and adopt a proactive approach to fraud and compliance as opposed to a reactive one, staying connected to the ever-evolving risks and with the ability to identify new threats and address them effectively.

Collaboration is one of the traits we have utilized to maximum effect in pretty much everything. Fraud and compliance should be no different.