I've been catching up on my reading on fraud strategy recently (I was asked to contribute a couple of pages to a new book on the subject). And whilst there have been some great strides forward on the technology front, it seems to me that we still haven't fully faced up to the magnitude of the task at hand...

• In Cybersource's Fifth Annual UK Online Fraud Report, their survey shows that 'fraud losses consume more than 1% of revenue for 37% of UK online merchants; 13% lose more than 5% of their revenue'.
• According to APACS - The UK Payments Association, 'UK card fraud losses for 2008 totaled £609.9m, online banking fraud losses £52.5m and cheque (check) fraud losses £41.9m ...the main driver for growth in card fraud is on those transactions without chip and PIN protection'.
• Also, from KPMG's Fraud Barometer - 'More than £1.1bn of fraud came to UK courts in 2008  ...the highest level recorded since 1995'.

I am not trying to imply that the world is sitting on its hands doing nothing - clearly not...

• Earlier this year, the UK Government (in the form of the National Fraud Strategic Authority) formally launched the National Fraud Strategy
• The NHS is having increasing success in catching fraudsters thanks to the efforts of the NHS Counter Fraud and Security Management Service (NHS CFSMS)
• And SAS continues to build on its software and services solutions to counter fraud.

But it's only when these things are brought together that a truly comprehensive approach to preventing, detecting and resolving fraud becomes a reality.

A counter-fraud platform / framework that crosses the silos of an enterprise’s operations is vital in an age of ever more sophisticated fraudsters. As the UK’s experiences with Chip and PIN have shown, cutting down fraud in one area tends to migrate it to others (with Chip and PIN, the fraud migrated to Card Not Present frauds (calls centers and online) and a reemergence of cheque fraud). Counter fraud professionals are also aware that organized criminals are targeting businesses (including Financial Services institutions) from the inside – either attempting to get their own people hired, or engaging an existing employee with their criminal conspiracies – there is no point locking the front door if you are going to leave all the windows and the back door open.

So, the recipe for success in reducing losses to fraud requires:

• Addressing people (culture), processes and systems
• Suppliers, employees and customers
• A committed, continuing effort across the organisation.