Why Complex Fraud Cases Require an Intelligence-Led Approach

“Bad things happen”. When it comes to banking, this statement would be followed by how bad, how much, and what is our exposure?

Senior bank executives have grown accustomed to being on the receiving end of “bad news”. This might be the result of alleged wrongdoing by customers, internal bank officials, or a geopolitical event. It could come from government regulators, internal whistleblowers, or investigative reporting through news media. Whatever the source, the information given will trigger a range of activities and responses, which require a speedy intelligence-led investigation to assess the facts.

Even though the available information may be incomplete, fragmented and should be the subject of scrutiny, this does not lessen the urgency required to assess the impact it may have had, or is likely to have, on your bank.

These time-sensitive fraud cases happen frequently, and in terms of potential fines or losses, adverse publicity, and even criminal prosecution, the consequences can be extreme.

Real-world examples of complex fraud cases

There are a number of potential time-sensitive scenarios a bank might find itself in. Here are a few real-world examples of the types of fraud cases a bank may be faced with:

• A powerful political figure and head of state in another country is deposed. He flees the country and as a new government takes power. As a result, many allegations of corruption by the former leader surface. The former leader and members of his family are customers of your bank. Prosecutors with your nation’s anti-fraud agency or central bank contact your bank and demand to know what assets and real property are owned by the leader and his family in your country. And they need answers within 48 hours.

• There is a difference of opinion between your country’s anti-terrorism agency and another country’s counterpart agency over whether a religious charitable group is in fact just that, a dedicated charity fulfilling its mission, or a subterfuge with a real mission of funding violent terrorists. Your bank handles payment processing for the charity. A government agency in your nation contacts your bank and demands a complete listing of all payments made over the last four years – within 24 hours.

• Your nation has made tens of billions in small business loans in the last 18 months as part of the government’s efforts to support the economy during the Covid pandemic. Now the date is approaching for repayments to be made, or documentation filed showing that the loan program’s loan forgiveness terms were met. Investigative media reports indicate that a high number of the loans were actually given to fraudsters. The government needs to identify all new companies formed in the previous 18 months with family members of the company owners on the payroll.

Challenges to time-sensitive fraud cases

Given the high stakes consequences resulting from these complex investigations, many banks and other financial institutions struggle to quickly resolve these types of situations. One of the challenges in conducting complex fraud investigations at speed is having confidence that the conclusions reached are accurate, and that the level of risk and exposure articulated in your report to senior stakeholders provides clear, concise answers and, where required, recommendations to mitigate immediate risk.

These events can quickly escalate to board level and the demand for a concise assessment of risk, exposure, and reassurances that the problem – whether it be reputation or losses – can be mitigated.

Complex investigations demand innovative technology

Fraud cases like these require technology and tools that let officials respond with speed, flexibility, accuracy, and confidence. These tools must be easy to use and adaptable.

When the problem hits, the demand for answers will be high and the required risk mitigation time critical. It is highly unlikely that a senior financial crime or fraud manager will be given weeks or months to investigate numerous data sources across lines of business. As such, the ability to investigate complex fraud cases needs to be in place and ready to be deployed. And this starts with taking control of your data.

Building your own fraud investigation system can be expensive and time consuming. Furthermore, it could fail in matching the speed and quality requirements of advanced analytic tools that are already in use in the banking sector.

But an innovative approach to fraud investigations, like Quantexa's Decision Intelligence Platform (DI), can deliver fast, flexible, comprehensive results by adding much-needed context to complex, time-sensitive investigations.

“What would have taken us manually six or seven weeks with some attendant risks to errors in identification, we are able to execute literally in a matter of hours using the Quantexa platform.”

David Howes, Global Head Financial Crime Compliance

Standard Chartered Bank

Revolutionize your fraud investigation process with Decision Intelligence

Quantexa's DI Platform is an effective tool to tackle complex fraud investigations due to its following capabilities:

• Entity Resolution: Leverage both internal and external data sets to enhance results and go “deep and wide” in your data analysis, the platform resolves entities accurately.

• Network Generation and Visualization: Uncover linkages and insights, even when analyzing billions of data points, uncovering the relationship between entities.

• Intelligent search: Enable analysts to conduct exact, partial, or fuzzy searches for any profile of interest.

• Enrich alerts by applying to all types of data: Transactions, customers, claims, events, calls, shipments and more – the platform doesn’t discriminate against any type of data.

• Simple to use: Empower analysts to be self-sufficient by making it easy to test data-led typologies or thematic explorations without having to depend on a data science department.

Investigate with confidence using Quantexa's DI Platform

By leveraging the power of an advanced analytic platform like Quantexa, bank leaders can have confidence that when the next “bad news” event occurs, they’ll be well prepared to unlock answers at speed, mitigate risk, and reduce fraud losses.

Adapting to a World of Digital Fraud