IBM has introduced software that can be used by business to combat attempted fraud in insurance, financial and healthcare settings by applying "Big Data" analytical concepts that bring together various data streams to decide whether someone appears to be perpetrating fraud.
IBM's server-based Counter Fraud Management Software is augmented with an informational service supplied by analysts that IBM calls its "Red Cell" task force who will share security updates related to trends in fraud. The broad areas of concern, according to Craig Hayman, general manager of industry cloud solutions at IBM, is money-laundering, wire fraud, tax fraud and fraud in property insurance and healthcare.
"This is real-time detection of fraud," says Hayman, saying the Counter Fraud Management Software can be used to prevent wrongful claims from being accepted, for example. It can also be used to analyse business data to sort out whether fraud may have been committed in the past. Hayman notes that the IBM fraud-detection software makes use of capabilities IBM acquired with Cognos, SPPS, i2 and FileNet in the past. IBM plans to license Counter Fraud Management Software based on the dollar value of transactions.
Joe Palmar, project director at Memorial Healthcare based in Miami, says the hospital has been using IBM's i2 analytical software to comb its business systems for evidence of vendor-related fraud. This automated process was put in place after a scandal over bid-rigging of contracts that hit the hospital about 5 years ago that resulted in 12 vendors going to prison, 20 vendors being ejected from the hospital's procurement system and half a dozen internal employees being implicated as well.
The Miami area is often perceived by law enforcement as "ground zero for fraud," in the U.S., Palmar acknowledges, noting that automated processes can much more easily detect fraud than manual processes. It can also do help with employee and vendor background checks, he says, and he'll be looking into IBM's newer offerings to counter fraud.
"There is a lot of innovation in fraud," commented Hayman, and the idea is to investigate it--in order to prosecute it--by discovering patterns and pinpointing the needle in the haystack by applying "Big Data" analytical concepts at high speed to catch contradictions and lies. This might involve pulling in data streams from any variety of available social, online and mobile information using sophisticated analysis to monitor for fraudulent indicators.
IBM also compared it to using similar tactics that law enforcement might use to help commercial organisations counter fraud leading to financial loss. IBM says its anti-fraud software has found early adoption use in the United Kingdom with the London Borough of Camden, which has used it to reduce tax fraud.