...inexplicáveis e pessoas incomparáveis" como vocês! Obrigado por tudo, Filipe Abstract The Retail Banking Industry has been severely affected by fraud over the past few years. Indeed, despite all the research and systems available, fraudsters have been able to outsmart and deceive the banks and their customers. With this in mind, we intend to introduce a novel and multi-purpose technology known as Stream Computing, as the basis for a Fraud Detection solution. Indeed, we believe that this architecture will stimulate research, and more importantly organizations, to invest in Analytics and Statistical Fraud-Scoring to be used in conjunction with the already in-place preventive techniques. Therefore, in this research we explore different strategies to build a Streambased Fraud Detection solution, using advanced Data Mining Algorithms and Statistical Analysis, and show how they lead to increased accuracy in the detection of fraud by at least 78% in our reference dataset. We also discuss how a combination of these strategies can be embedded in a Stream-based application to detect fraud in real-time. From this perspective, our experiments lead to an average processing time of 111,702ms per transaction, while strategies to further improve the performance are discussed. Keywords: Fraud Detection, Stream Computing, Real-Time Analysis, Fraud, Data Mining, Retail Banking Industry, Data Preprocessing, Data Classification, Behavior-based Models, Supervised Analysis, Semi-supervised Analysis ...
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...Integrated Fraud Management Actimize Integrated Fraud Management solutions deliver real-time, customer-centric fraud prevention that supports a holistic, enterprise-wide fraud management program. Fully integrated channel and line-of-business specific detection solutions that seamlessly share data for true cross-channel fraud management Advanced and comprehensive set of fraud framework services that provide detection, decisioning, and operations capabilities Used by top global banks, such as Bank of America and BB&T, and recognized as Best-In-Class in Enterprise Fraud by CEB TowerGroup. Card Fraud Customer-centric, cross-channel, and cross-product fraud detection covers ATM, PIN and signature POS, and card not present transactions. Remote Banking Cross-channel models for retail online and mobile banking, call center, and IVR channels, to detect fraudulent monetary and non-monetary transactions. Commercial Banking Multi-channel monitoring and analytics for commercial banking transactions (e.g. wires, ACH, payroll) and non-monetary transactions (e.g. template creation, transaction approval) with user, account, and company-level profiling. Deposit Fraud Best practice rules and analytics for detection of suspicious incoming funds via electronic transactions and checks, to address schemes such as kiting and bust out fraud. Employee Fraud Proven rules and analytics, combined with proactive investigation tools...
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...Data Mining for Fraud Detection: Toward an Improvement on Internal Control Systems? Mieke Jans, Nadine Lybaert, Koen Vanhoof Abstract Fraud is a million dollar business and it’s increasing every year. The numbers are shocking, all the more because over one third of all frauds are detected by ’chance’ means. The second best detection method is internal control. As a result, it would be advisable to search for improvement of internal control systems. Taking into consideration the promising success stories of companies selling data mining software, along with the positive results of research in this area, we evaluate the use of data mining techniques for the purpose of fraud detection. Are we talking about real success stories, or salesmanship? For answering this, first a theoretical background is given about fraud, internal control, data mining and supervised versus unsupervised learning. Starting from this background, it is interesting to investigate the use of data mining techniques for detection of asset misappropriation, starting from unsupervised data. In this study, procurement fraud stands as an example of asset misappropriation. Data are provided by an international service-sector company. After mapping out the purchasing process, ’hot spots’ are identified, resulting in a series of known frauds and unknown frauds as object of the study. 1 Introduction Fraud is a million dollar business and it is increasing every year. ”45% of companies worldwide have fallen victim...
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...site. Another vendor, Paymentech, was integrated with Yahoo! to validate credit cards and process payments for Cliptomania. Marketing was another issue encountered. With the dot-com bust in the early 2000s, the cost of listing the website in search engines increased based on the number of “clicks.” The Santos soon found, however, that this increased cost resulted in increased sales and now consider it an acquisition cost. Cliptomania also ventured into search engine advertising and pay for searches based on keywords that are selected by the company. ------------------------------------------------- SOLUTIONS (Taken by the company) (20 Points)* * Invest in an enterprise data warehouse and moving real-time data to warehouse. * Fare Design: Continental uses real-time data to optimize airfares. * Ticket Facsimile * The warehouse team developed an application for...
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...Effective Accounting Fraud Detection Method The stacked bar chart exhibits which between manual methods and automated methods is more commonly used and is more effective in detecting accounting frauds, according to the perception of accounting professionals in DLSU. Unexpectedly, majority of the accounting professors perceive (x [mean] = 2.06, σ [standard deviation] = 0.79) the most commonly used accounting fraud detection methods as manual in form. The reason for this is in line with a previous study conducted by Shapiro (2011) which states that it is nearly impossible to eliminate the risks of accounting fraud, for it is generally a manual activity, and not a mere automated activity. In addition, Ms. Catada also asserted that manual methods are more ideal for detecting accounting misrepresentations since they constitute to scrutinizing supporting documents which could only be facilitated through manual checking. However, she also stated that automated accounting fraud detection methods could still be helpful in assisting and easing these manual processes. Based on the survey, the respondents disagreed (x = 2.39, σ = 0.93) to the idea that automated detection methods are more frequently used than manual methods in detecting fictitious sales. According to Ms. Catada, this type of fraud may be detected through bank reconciliation, third party confirmation or supporting documents to verify whether the sale actually occurred. Likewise, for the detection of incorrect valuation...
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...Running Header: Transaction Security Schemes and How to Prevent Them Transaction Security Schemes and How to Prevent Them University of Maryland University College ITEC 610 November 8, 2011 Abstract According to Management, Information Systems (2011), “Transactions are events that occur as part of doing business, such as sales, purchases, deposits, withdrawals, refunds, and payments ” (p. 278). Criminals use technology to get people to send money, obtain banking/credit card account and personal information. The purpose of this paper is to prove that with awareness, the appropriate preventive measures in place, consumers can minimize or eliminate their risk of falling prey to these scams. Transaction Security Schemes and How to Prevent Them Secure Electronic Transaction (SET) was developed to ensure the security of financial transactions on the Internet. It was supported initially by MasterCard, Visa, Microsoft, Netscape, and others. A user is given an electronic wallet and a transaction is conducted and verified using a combination of digital certificates and digital signatures among the purchaser, a merchant, and the purchaser’s bank in a way that ensures privacy and confidentiality. A SET purchase involves three parties: the cardholder, the merchant, and the payment gateway or bank. The cardholder shares the order information with the merchant but not with the payment gateway....
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...http://www.slideshare.net/ajaysuman/artificial-intelligence-in-business ARTIFICIAL INTELLIGENCE IN BUSINESS Introduction Business applications utilize the specific technologies mentioned earlier to try and make better sense of potentially enormous variability (for example, unknown patterns/relationships in sales data, customer buying habits, and so on). However, within the corporate world, AI is widely used for complex problem-solving and decision-support techniques in real-time business applications. The business applicability of AI techniques is spread across functions ranging from finance management to forecasting and production. In the fiercely competitive and dynamic market scenario, decision-making has become fairly complex and latency is inherent in many processes. In addition, the amount of data to be analyzed has increased substantially. AI technologies help enterprises reduce latency in making business decisions, minimize fraud and enhance revenue opportunities. Definition of AI AI is a broad discipline that promises to simulate numerous innate human skills such as automatic programming, case-based reasoning, neural networks, decision-making, expert systems, natural language processing, pattern recognition and speech recognition etc. AI technologies bring more complex data-analysis features to existing applications. There are many definitions that attempt to explain what Artificial Intelligence (AI) is. I like to think of AI as a science that investigates...
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...always changed to meet the needs of the business environment of that day. Auditing has been around since the beginning of human civilization, focusing mainly, at first, on finding fraud. As the United States grew, the business world grew, and auditing began to play more important roles. In the late 1800’s and early 1900’s, people began to invest money into large corporations. The Stock Market crash of 1929 and various scandals made auditors realize that their roles in society were very important. Scandals and stock market crashes made auditors aware of deficiencies in auditing, and the auditing community was always quick to fix those deficiencies. The auditors’ job became more difficult as the accounting principles changed, and became easier with the use of internal controls. These controls introduced the need for testing; not an in-depth detailed audit. Auditing jobs would have to change to meet the changing business world. The invention of computers impacted the auditors’ world by making their job at times easier and at times making their job more difficult. Finally, the auditors’ job of certifying and testing companies’ financial statements is the backbone of the business world. Introduction Auditing has been the backbone of the complicated business world and has always changed with the times. As the business world grew strong, auditors’ roles grew more important. The auditors’ job became more difficult as the accounting principles changed. It also became easier with the...
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...Health Insurance Fraud By: WAHEED ALKHAMEES KHALED ALNAFEE Further Issues Hospital Administration PA 551 Master of Health and Hospital Administration (Parallel) King Saud University One:- Introduction Definition Insurance is the equitable transfer of the risk of a loss, from one entity to another in exchange for payment. It is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss. An insurer, or insurance carrier, is a company selling the insurance; the insured, or policyholder, is the person or entity buying the insurance policy. The amount of money to be charged for a certain amount of insurance coverage is called the premium. Risk management, the practice of appraising and controlling risk, has evolved as a discrete field of study and practice. The transaction involves the insured assuming a guaranteed and known relatively small loss in the form of payment to the insurer in exchange for the insurer's promise to compensate (indemnify) the insured in the case of a financial (personal) loss. The insured receives a contract, called the insurance policy, which details the conditions and circumstances under which the insured will be financially compensated. Types of Insurance Services Insurance can take a number of different forms. Some of these types: Auto insurance Auto insurance protects the policyholder against financial loss in the event of an incident involving a vehicle they own, such as...
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...Week1 Problemk, Behind every decision you make there’s a problem you’re trying to solve. Objectives, After you have a better definition of your problem, now it’s time to get crystal-clear aboutwhat you’re trying to accomplish with your decision Alternatives, u have a well-defined problem and clear objectives, it’s time to finally assess your alternatives and decide, right? Not so fast! First, we should generate alternatives — expand and explore possibilities Consequences, Now comes the time to finally start assessing the merits of each of the alternatives you considered. And the primary way of doing this is by evaluating the consequences of each choice. Tradeoffs If you got this far without a solution, it’s probably because your decision is really tricky. It also means that it has conflicting objectives — and that you’ll need to consider some hard tradeoffs between them. Week 3 Data Quality Issues When transferring data from one program to another (ie from Excel to Access), you need to consider the following: * Uniformity (data has transferred in the same manner for all records in a file). * Version (ensure format of original data and variables has not changed when data was transformed). * Completeness check (all records are transferred in the file). * Conformity check (does data look right?). * Spot check (trace some records back to their source file eg. 10 random records to see they have transferred correctly). Cleaning Data One of first and...
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...Anatomy of computer accounting frauds A. Seetharaman, M. Senthilvelmurugan and Rajan Periyanayagam Faculty of Management, Multimedia University, Malaysia Keywords Fraud, Corruption, Financial reporting, Whistleblowing, Internal control, Corporate governance Abstract This paper introduces fraud as asset misappropriations (85 per cent of cases), corruption and fraudulent statements. Symptoms include accounting anomalies, lack of internal control environment, lifestyle and behaviour. The most effective tools for fraud detection are internal audit review, specific investigation by management, and whistle-blowing. The paper details the fraud investigation process and the role of auditors as fraud examiners. The correlation of fraud perpetrators’ personality with the size of losses is examined. Personality is analysed into age, gender, position, educational background and collusion. A strong system of internal control is most effective in fraud prevention. Fraud prevention procedures, targeted goals and improvements to system weaknesses feature in the paper. Fraud impacts on accounting transactions in accounts receivable, receipts and disbursements, accounts payable, inventories and fixed assets, and financial reporting. The monetary impact resulting from fraud is analysed by the type of victim and the amount of loss. Internal control and good employment practices prevent fraud and mitigate loss. Computer accounting frauds 1055 Introduction Accounting fraud involves an intentional action...
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...Stopping Malicious Behavior What is the problem? Can the field of fraud detection (and cyber security in general) be improved by new technology and approaches? If companies develop a program that searches for unusual activity by looking at risk factors then they could improve how they detect fraud. Since a lot of fraud detection is rule based, they have to develop a system that addresses the gray areas of their rules. For instance if a bank is looking for someone who transfers over $10,000 for one transaction in a day as an alert, then what happens if they separate the $10,000 into smaller payments? What happens if the malicious person makes sure to deposit just under $10,000 to avoid having alerts for their illegal actions? Addressing different patterns of new gray flavors of activity can help address management issues, overlapping issues and detection issues. Also developing better anomaly, link and predictive analysis can help guide fraud detection into greater improvements. Anomaly analysis consists of being able to identify risk using certain behaviors when someone doesn’t do things the normal way. The main issue with anomaly detection is there is a great challenge on managing the detection systems, certain behavior that you think is odd may be normal to a certain group of people, and that it is hard to make generalizations on new data. Link analysis develops relationships between different kinds of entities. Links can be made with how entities relate to...
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...situations that involve forensic auditing will deal with proposed fraudulent activities, but there are some cases that may deal with non-fraudulent activities, such as settlements of monetary disputes (“Student Accountant”). Throughout this paper, we will discuss, in detail, the profession of forensic auditing and forensic accounting in relation to fraudulent activities. What is Forensic Auditing? Forensic auditing and financial auditing are not related in any way; rather, they have their own distinct objectives that are set to achieve different goals. Forensic auditing can be defined as “the process of detecting, preventing, and correcting fraudulent activities” and focuses on establishing an environment that will help to encourage the detection and prevention of these fraudulent activities (Singleton and Singleton 14-15). Thus, forensic auditing focuses on the strength and effectiveness of a company’s internal...
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...criminal leaders who may not have been directly involved in a series of criminal acts but whose criminal organization carried out the details. 2. Benford’s Law (1)定义：A fraud indicator that predicts the relative incidence of first digits of numbers in certain types of random data. (2)Benford Analysis Benford analysis presents another interesting approach to fraud detection. Its general use is to determine the likelihood that fraud exists in records. This technique is based on Benford’s law, named after Frank Benford who realized that the likelihood that numbers 1, 2, 3, 4, 5, 6, 7, 8, and 9 will appear as the first digit in numbers occurring in a random data set conforms to a predictable pattern. That is, the number 1 is more likely to appear as the first digit in a number than is the number 2. The pattern of likelihood (Figure 6.6) continues with other digits: The number 2 is more likely to appear as a first digit than 3, 3 is more likely to appear as a first digit than 4, and so on. Note that just because the likelihood is higher that 7 will appear as a first digit than will 8 does not mean that a number that begins with 8 is due to fraud. Benford’s law can be used to determine whether a higher risk than normal exists that a population of numbers—for example, a collection of vendor’s invoices—contain fraud. Specifically, the invoice amounts can be...
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...Bank of Nigeria reported that the backward development in Nigeria was attributable to weaknesses in the internal control systems of the banks. This has clearly pointed out the picture of how fraud has been penetrated in the financial strength of Nigerian Banks. In a nut-shell, the damage which this menace, called fraud has done to the banks is innumerable and needs urgent attention. Therefore, the attempt to put an end to this economic degradation, gave rise to the topic of this research study the impact of internal control in the banking sector in Nigeria with Wema Bank of Nigeria PLC as a case study. However, this study is aimed at verifying the conception that an effective and efficient internal control system is the best control measure for preventing and detecting fraud, especially in the banking sector. Data captured for this study, were analyzed through descriptive and inferential statistical methods. The descriptive analysis involves the use of percentages, tabulation and graphical presentation. While the inferential statistical method involved the use of the chi-square. The functions of fraud prevention, detection and control are interwoven, as the three works together to eliminate fraud and fraudulent tendencies. Therefore, internal control is highly significant in fraud detection and preventions in banking sector in Nigeria. | | | INTRODUCTIONInternal control, the strength of every organization, has become of paramount importance today in Nigerian banks. The...
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