We examine factors behind the low detection rate of fraud using analytics, and offer our perspective on the benefits for businesses when trust is carefully managed in analytics programs.
Fraud is a very damaging facet of business life which companies often suffer from. To detect fraudsters, companies can deploy data & analytics to search for suspicious transactions. For a detection program to be successful, it must have access to reliable data and be trusted to perform according to the company’s expectations. Executives must have confidence the analytics will work as intended, and they may lose trust in the anti-fraud program if it does not successfully detect cases of wrongdoing in the early phases.
KPMG’s report Using analytics successfully to detect fraud explains the challenges of managing an analytics-driven program and examines the steps companies should take to improve the chances of delivering such benefits, including protecting the reputation of the organisation.
We find that very few companies are successfully employing analytics for the detection of fraud. This lack of adoption reflects a ‘trust deficit’; there’s a lack of trust that the underlying data, the analysis and the business interpretation of the outcomes will be able to distinguish between legitimate transactions and fraudulent activity in an efficient and cost-effective manner.
People must be confident that the analytics algorithms are working as intended and must trust each other to use them properly. Find out more about the elements of an effective, anti-fraud analytics process and how companies may benefit from a carefully managed program of fraud detection.
© 2021 Copyright owned by one or more of the KPMG International entities. KPMG International entities provide no services to clients. All rights reserved.
KPMG refers to the global organization or to one or more of the member firms of KPMG International Limited (“KPMG International”), each of which is a separate legal entity. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. For more detail about our structure please visit https://home.kpmg/governance.
Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.