Weathering the Fraud “Walleye Chop” with ID Insight at IAFCI
Minnesota’s own Bob Dylan once wrote: “you don’t need a weatherman to know which way the wind blows.” So it’s no surprise that the changing climate of fraud detection and prevention was a prime topic at this year’s International Association of Financial Crimes Investigators (IAFCI) annual conference in Minneapolis.
We liken the current climate to a “walleye chop” – a term used by anglers to describe waves associated with rough waters, one of the best indicators for good walleye fishing due to increased feeding activity. During my presentation to attendees, I warned that frequent data breaches, EMV migration and the continued growth of paperless communication has produced the perfect conditions for fraudsters to engage in a veritable feeding frenzy of account takeover, NRI and new account fraud.
Take a look at our presentation and see some case examples of fraud that could have been prevented by diving beneath the surface and seeing incongruous address patterns masked by ordinary account activity.
Fraud perpetrators today are a far cry from the small-time basement counterfeiters and check-kiters of Bob Dylan’s era – they are sophisticated, organized and complex criminal enterprises with budgets and P&L objectives, and the steady stream of private data availability ensures business will continue to boom for years to come, despite efforts at stemming the tide with EMV cards and tighter data privacy practices.
The best way to prevent widespread address fraud is to use technology and data to identify patterns indicative of criminal activity. By using complex link analysis, we have uncovered sophisticated fraud rings previously undetected by observing simple frequency attributes (e.g., the number of new account inquiries at an address). These more advanced techniques are only as good as the data that feeds it.
This is a collaborative process, as the volume of data required to observe fraud patterns and trends relies on financial institutions’ own data collection and sharing as well as third-party data. The more information that institutions can access and contribute to fight fraud – particularly data that examines all transactions across industries, product types and geographies – the better their protection will be.
Conventional outdoor wisdom tells us there are no bad conditions, only bad preparation. Whether facing choppy winds or calm seas, ID Insight has developed tools to help prepare you for the rapidly changing fraud conditions ahead.
By the way, while we are talking about walleye fishing, click here to see our CTO’s prized walleye catch from his first ever fishing excursion earlier this summer.
Written by Adam Elliott
ID Insight President, Co-Founder
Adam has a passion for creating data-driven solutions that produce positive and measurable business results. A recognized name in the analytics area, Adam has won numerous awards for marketing and training, including “Minnesotans on the Move,” the Gold Award at the Houston International Film Festival for analytics training and an award from the American Marketing Association for leading the creation of the largest B2B Webcast in Yahoo’s history. When he’s not inventing new products, he’s on the ice coaching his daughter’s hockey team.