More than 84 percent of fraud mitigation professionals interviewed see fraud that crosses multiple industries in their investigations, according to a newly released LexisNexis Fraud Mitigation Study.
The study revealed that multi-industry fraud has a moderate to high financial impact on the organizations involved. A strong majority of respondents also indicated that they see value in accessing data and information about cases from other organizations within and outside their industry to aid their fraud mitigation efforts.
“It is not a surprise that cross industry fraud was confirmed as a problem, but the fact that data is not yet better shared across industries reveals an exposure for organizations that are combating millions in fraudulent activities each year by individuals and organized crime rings,” said Bill Madison, CEO, Insurance, LexisNexis Risk Solutions. “Status quo fraud mitigation is not enough for fraud schemes that are becoming increasingly sophisticated. Sharing more data will enable organizations to be armed with more effective tools in the fraud battle.”
Other key findings include:
- More than three quarters of fraud mitigation professionals would use data about potential fraudulent activities from other industries as a pointer to a potential problem related to a case they are investigating.
- 77 percent say fraud mitigation cases connected to another industry have a high or moderate financial impact on their organization.
- 87 percent agreed with the need for a universal and consistent way of describing fraud across industries.
- Nearly half of respondents are using data analytics solutions for fraud mitigation in their organizations, mostly driven by the need for compliance and a desire for accuracy. Budget was found to be the primary deterrent.
Additional findings from risk professionals in insurance:
- They use external data for fraud detection. Insurance (52 percent) and financial services (51 percent) respondents are ahead of other groups in their use of external data for fraud detection.
- Analytics was a top choice (22 percent) for use of extra budget when asked about how they would spend extra money for fraud mitigation.
- Ad hoc database searches was the top selection when asked about the types of analytics solutions insurance professionals use, compared to Automated Business Rules systems, which was the top choice for participants from all other industries.
“Having data analytics programs at the organizational level is very beneficial, but our vision with the Fraud Defense Network is to begin to share data insights across industries to benefit all fraud mitigation professionals and better attack the fraud problem,” Madison said.
The LexisNexis Fraud Defense Network commissioned the national study to gain insights about how frequently fraud mitigation professionals encounter fraud cases from other companies and industries, and to understand how these professionals are using data analytics solutions for fraud detection. The study included 400 respondents from financial services, insurance, healthcare, retail and government organizations.
Source: LexisNexis Insurance Solutions
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