Anti-fraud management solution. Torsten Zube October 2012

Transcription

1 Anti-fraud management solution Torsten Zube October 2012

2 Legal Disclaimer This presentation is not subject to your license agreement or any other agreement with SAP. SAP has no obligation to pursue any course of business outlined in this presentation or to develop or release any functionality mentioned in this presentation. This presentation and SAP's strategy and possible future developments are subject to change and may be changed by SAP at any time for any reason without notice. This document is provided without a warranty of any kind, either express or implied, including but not limited to, the implied warranties of merchantability, fitness for a particular purpose, or noninfringement. SAP assumes no responsibility for errors or omissions in this document, except if such damages were caused by SAP intentionally or grossly negligent SAP AG. All rights reserved. 2

3 , Waste, and Insurances Total cost in the US of insurance fraud (non-health) is estimated to be more than $40 billion per year (Source: Federal Bureau of, US) is time consuming Insurance fraud has risen by 23% in the last 12 Month. as a result, insurance fraud is estimated to now cost 2.1 billion per year. (Source: Experian Report 2012) According to the Association of British Insurers, the sector is detecting more than 2,500 fraudulent claims worth 18 million every week. (Source: Experian Report 2012) Source: Accenture global claims study (3000 personnel interviews) Historical fraud detection methods identify only 10% of fraud cases. In combination with post-payment identification only 5% of detected frauds are recovered SAP AG. All rights reserved. 3

4 , Waste, and Public Sector Waste and Abuse costs government billions of Dollars per annum The United States Government Accountability Office (GOA) estimates $125.4 billion in improper payments. In Australia fraud is the most expensive crime category estimated to be $5,880 m The UK National Authority (NFA) estimates the public sector fraud at 38.4b prevention / detection important in government spending US: President Obama made the elimination of fraud, waste and abuse a top priority The US Department of Labor awarded $191 million to 40 states, the District of Columbia and Puerto Rico to modernize unemployment insurance systems (Sep 11) U.S. Department of Health and Human Services budget includes a request of $581 million in funding to reduce Medicare and Medicaid fraud ½ Trillion Dollar Challenge! 2011 SAP AG. All rights reserved. 4

5 , Waste, and Your Company Survey participants estimated that the typical organization loses 5% of its revenues to fraud each year. Applied to the 2011 Gross World Product, this figure translates to a potential projected annual fraud loss of more than $3.5 trillion REPORT TO THE NATIONS ON OCCUPATIONAL FRAUD AND ABUSE 2012, ACFE 2011 SAP AG. All rights reserved. 5

6 What Does This Mean for Your? How can we identify fraud before a damage occurs? How can we improve the fraud investigation efficiency? How can we keep track with changing fraud behaviors? How can we reduce the false positive signals? What is the best approach to automate the fraud detection process and predict the likelihood of fraud? How do we manage to check all transactions for fraud but ensure no business impact? 2011 SAP AG. All rights reserved. 6

8 Aligning Stakeholders to Achieve Excellence in Closedloop Management Head of Investigator Analyst Head of Department CIO How can I ensure to investigate on most valuable cases in the most efficient and effective way? How do I get all information I need for investigation- fast, accurate and always up-to date? How can I set-up and optimize best fitting fraud detection strategies without IT Support? How do I ensure to check for fraud quick with immediate results to avoid payment in case of fraud? How can I respond rapidly to business needs while keeping costs under control? processing performance Monitor and optimize quality of investigation React on changing situation Investigate more fraud cases Improved investigation results Intuitive to handle Detect fraudulent networks Predictive Analytics Real-Time Analysis Optimization of strategies Reduce false positive Speed up business processing Detect fraud before financial loss Reduce manual hand over to SIU Integration Scalability & Configuration One strategic solution across functions and LoB s Reduce TCO 2011 SAP AG. All rights reserved. 9

9 Management A Closed-loop, Cross-Functional Process Monitoring Prevention Pattern Analysis Rules & Predictive Models Strategy Calibration & Simulation Transaction Head of Investigator Analyst Department CIO 2011 SAP AG. All rights reserved. 11

10 Prevention Objectives, Issues, Capabilities, and Benefits Objective: Define high effective fraud strategies based all relevant data in an easy way without IT-Involvement Best practice solution: Real time fraud pattern analysis and advanced, easy to use capabilities to set up hybrid fraud detection strategies. Issues Key business capabilities Benefits Unknown fraud patterns often not identified Time consuming process and high effort to change existing rules No system support to simulate impact of detection methods Pattern analysis and fraud rule testing limited to sample data from only a few data sources Limited capabilities for LoB specific fraud criteria Hybrid combination of rules and predictive methods to identify fraud users are enabled to define fraud detection strategies incl. optimization based on weight factors and thresholds Real-time simulation and calibration of fraud detection strategies All data from different source (SAP and non-sap) can be incorporated Determination of detection strategies based on fine granular criteria Identify unknown patterns and react quickly on changing fraud behaviors Reduced effort without IT-involvement to set up and calibrate fraud detection strategies Transparent, real time information of impact on new / changed strategies No misinterpretations of fraud behaviors due to sample data Reduced false positive and streamlined fraud detection 2011 SAP AG. All rights reserved. 12

11 Prevention Objectives, Issues, Capabilities, and Benefits Objective: Define high effective fraud strategies based all relevant data in an easy way without IT-Involvement Best practice solution: Real time fraud pattern analysis and advanced, easy to use capabilities to set up hybrid fraud detection strategies. Issues Key business capabilities Benefits Unknown fraud patterns often not identified Time consuming process and high effort to change existing rules No system support to simulate impact of detection methods Pattern analysis and fraud rule testing limited to sample data from only a few data sources Limited capabilities for LoB specific fraud criteria Hybrid combination of rules and predictive methods to identify fraud users are enabled to define fraud detection strategies incl. optimization based on weight factors and thresholds Real-time simulation and calibration of fraud detection strategies All data from different source (SAP and non-sap) can be incorporated Determination of detection strategies based on fine granular criteria Identify unknown patterns and react quickly on changing fraud behaviors Reduced effort without IT-involvement to set up and calibrate fraud detection strategies Transparent, real time information of impact on new / changed strategies No misinterpretations of fraud behaviors due to sample data Reduced false positive and streamlined fraud detection 2011 SAP AG. All rights reserved. 14

18 Management A Closed-loop, Cross-Functional Process Monitoring Prevention Pattern Analysis Rules & Predictive Models Strategy Calibration & Simulation Online Mass Transaction Process Head of Investigator Analyst Department CIO 2011 SAP AG. All rights reserved. 21

19 Objectives, Issues, Capabilities, and Benefits Objective: Detect fraud situations as early and as precise as possible to avoid damages for fraudulent cases without manual work Best practice solution: Integrated fraud detection with online & mass detection capabilities incl. transparent scoring results and seamless process integration Issues Key business capabilities Benefits situation often identified after transaction is closed No capabilities to check existing transactions with updated fraud strategies detection based on expert experience; manual process to overcome system boarders Limited to no real-time process integration into transaction handling process Online fraud detection at any point and as often as needed within transaction process High-speed mass detection due to HANA technology Provide business user with fraud signals while capturing data based on hybrid fraud detection strategies Fully integrated bi-directional fraud processing Identify fraud as early as possible - before transactions are further processed and financial loss occurs Use online real-time detection or mass detection without limitations Early identification of potential fraud situation to enable business user gathering more data Apply automated fraud detection to reduce manual work, ensure re-scoring due to changes in transaction and provide results of investigation back as soon as possible 2011 SAP AG. All rights reserved. 22

20 Management A Closed-loop, Cross-Functional Process Monitoring Prevention Pattern Analysis Rules & Predictive Models Strategy Calibration & Simulation Online Mass Alert Notification Inquire & Analyze Evaluation & Decision Transaction Process Head of Investigator Analyst Department CIO 2011 SAP AG. All rights reserved. 23

21 Objectives, Issues, Capabilities, and Benefits Objective: Investigate on fraud cases with an environment for processing fraud cases more effective and efficiently. Best practice solution: Closed loop fraud investigation processing, full insight into all relevant information, highspeed in-memory analysis to identify fraudulent behaviors and advanced alert management capabilities Issues Key business capabilities Benefits Significant work and effort spent on non value cases Time consuming data gathering due to system boarders High effort due to insufficient investigation capabilities High workload due to huge number of false positive Updated transaction situation not visible for Investigators Up-to-date fraud scoring based on hybrid fraud detection strategies Full insight into all relevant information at the fingertip Advanced alert management functionalities and capabilities Calibration of existing fraud strategies with weight factors and threshold to reduce false positive Fully integrated bi-directional fraud processing Increase investigator ROI by focusing on high score / high value cases Faster fraud processing to avoid blocking a transaction longer than needed Improve investigator efficiency and reduced fraud processing expenses Improved accuracy of fraud detection with reduced false positive and false negative detections always on up-to-date information to avoid double work 2011 SAP AG. All rights reserved. 24

23 Management A Closed-loop, Cross-Functional Process Monitoring Monitoring & Performance Optimization Prevention Pattern Analysis Rules & Predictive Models Strategy Calibration & Simulation Online Mass Alert Notification Inquire & Analyze Evaluation & Decision Transaction Process Head of Investigator Analyst Department CIO 2011 SAP AG. All rights reserved. 26

24 Monitoring & Optimization Objectives, Issues, Capabilities, and Benefits Objective: Real-time performance analytics and management reporting to make informed decisions and take appropriate, timely action Best practice solution: User-centric dashboards provide users on all level with accurate and consistent data Issues Key business capabilities Benefits Poor control over team workload and overdue fraud signals Limited capabilities to measure fraud investigation performance No Insight into effectiveness of fraud rules and strategies Work and performance analysis incl. operational reporting Monitor and optimize quality of investigation Permanent analysis of results including real-time calibration of strategies Accurate, consistent and transparent data for informed business decisions - any time & anywhere React immediately on changing situation to improve efficiency Optimized fraud strategies based on real time data to react on changing fraud behaviors 2011 SAP AG. All rights reserved. 27

26 Integration Configuration Platform Management A Closed-loop, Cross-Functional Process Monitoring Monitoring & Performance Optimization Prevention Pattern Analysis Rules & Predictive Models Strategy Calibration & Simulation Online Mass Alert Notification Inquire & Analyze Evaluation & Decision Transaction Process Head of Investigator Analyst Department CIO 2011 SAP AG. All rights reserved. 29

27 IT & Technology Objectives, Issues, Capabilities, and Benefits Objective: Respond rapidly to business needs while keeping costs under control Best practice solution: Integrate one strategic and integrated closed-loop fraud solution across LoB s for best overall TCO Issues Key business capabilities Benefits High integration and maintenance costs due to a multitude of diverse functional systems Hugh effort to keep track with ever demanding requirements of business units to address changes in insurance fraud trends Development and maintenance of fraud strategies requires IT involvement Highly integrated & configurable solution based on flexible and communication based open standards Scalable, component-based standard application users are enabled to define fraud detection strategies incl. optimization based on weight factors and thresholds Flexibility to configure the solution based on specific business needs integrated in your existing system landscape Implementation in a step wise approach and adapt solution depending on the business needs Reduced effort without ITinvolvement to set up and calibrate fraud detection strategies 2011 SAP AG. All rights reserved. 30

28 Q&A 31

29 Thank you! Contact information: Torsten Zube 32