Fraud
How often does fraud occur within your company? It’s probably a rare event, but when it does occur it can be extremely expensive. Not only are you out money, but the integrity of your underlying operations are in question. Fraud may be infrequent and you don’t want to let it happen, if it can be avoided. To help companies prevent fraud, PredictiveMetrics (PMI) has a variety of statistical modeling solutions that can help you evaluate the possibility of fraud and stop it before it happens. This technology provides a real savings over any alternative that requires in-depth auditing and significant manual labor.
PMI leverages information, statistical analysis, and technology to quickly and effectively evaluate potential fraudulent behavior. This type of model can be designed for any type of business including utilities, credit card issuers, financial services, travel agencies, and lessors to name a few. PMI’s statistical models can predict whether a specific transaction has a high probability of fraud and put you on notice of a potential problem. For example, a model designed for a utility can predict which customers have the highest likelihood of committing theft of service providing the basis for remedial action to prevent the theft before it occurs. Alternatively, PMI’s systems can spot the occurrence of a fraud almost as soon as it occurs.
Steps in Developing a Fraud Model
1. PMI works with you to understand the details of how frauds can occur and what data are available to understand this risk (Fraud Research).2. PMI then designs a data request based upon the information gathered in Step 1 and uses it to conduct a Fraud Statistical Analysis.
3. The Fraud Statistical Analysis allows PMI to determine whether your internal data or any other data is sufficiently predictive to warrant the development of statistical models to evaluate fraud risk.
4. If the answer to Step 3 is yes then PMI will develop a statistical-based Fraud Model.
5. As a follow-up, PMI conducts annual maintenance of the model(s) to ensure ongoing model predictiveness.
Benefits of Fraud Modeling
- Save time, money, and valuable resources through the early detection of fraud or the likelihood of fraud.
- Decrease DSO, delinquencies and write-offs
- Proven to accurately predict fraud and provide the basis for fraud avoidance.
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