Fraud Analytics: Strategies and Methods for Detection and Prevention

174 Pages·2013·2.31 MB·English

by  Delena D. Spann

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Fraud Analytics
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Fraud Analytics
Strategies and Methods for
Detection and Prevention
DELENA D. SPANN
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LibraryofCongressCataloging-in-PublicationData:
Spann,DelenaD.,1967-
Fraudanalytics:strategiesandmethodsfordetectionandprevention/DelenaD.Spann.
pagescm.–(TheWileycorporateF&A)
ISBN978-1-118-23068-8(hardback)–ISBN978-1-118-28699-9(ePDF)–
ISBN978-1-118-28273-1(ePub) 1. Fraud. 2. Fraudinvestigation. 3. Fraud–
Prevention. I. Title.
HV8079.F7S682013
658.4073–dc23
2013019909
PrintedintheUnitedStatesofAmerica
10 9 8 7 6 5 4 3 2 1
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Tomydadandmom,PeterandRethaCookSpann,thegiversofmylife,whoboth
lovemejustasmuchasIlovemyselfandtothegreatcloudofwitnesseswho
keepwatchoverme
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Contents
Foreword xi
Preface xiii
Acknowledgments xv
Chapter1: TheSchematicsofFraudandFraudAnalytics 1
HowDoWeDefineFraudAnalytics? 2
MiningtheField:FraudAnalyticsinitsNewPhase 6
HowDoWeUseFraudAnalytics? 10
FraudDetection 10
HowDoWeDefineFraudAnalytics? 12
FraudAnalyticsRefined 12
Notes 13
Chapter2: TheEvolutionofFraudAnalytics 15
WhyUseFraudAnalytics? 17
TheEvolutionContinues 19
FraudPreventionandDetectioninFraudAnalytics 19
Incentives,Pressures,andOpportunities 21
Notes 22
Chapter3: TheAnalyticalProcessandtheFraud
AnalyticalApproach 23
TheTurnofTheAnalyticalWheel 23
ItTakesMoreThanOneStep 24
ProbabilitiesofFraudandWhereitAllBegins 28
WhatShouldtheFraudAnalyticsProcessLookLike? 29
DataAnalyticsExposed 31
Notes 32
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viii & Contents
Chapter4: UsingACLAnalyticsintheFaceofExcel 33
TheDevilRemainsintheDetails 50
Notes 55
Chapter5: FraudAnalyticsversusPredictiveAnalytics 57
OverviewofFraudAnalysisandPredictiveAnalysis 58
ComparingandContrastingMethodologies 60
13StepScoreDevelopmentversusFraudAnalysis 64
CRISP-DMversusFraudDataAnalysis 66
SAS/SEMMAversusFraudDataAnalysis 68
ConflictswithinMethodologies 69
CompositeMethodology 70
ComparingandContrastingPredictiveModeling
andDataAnalysis 72
Notes 76
Chapter6: CaseWareIDEADataAnalysisSoftware 77
DetectingFraudwithIDEA 79
FraudAnalysisPointsofIDEA 82
Correlation,TrendAnalysis,andTimeSeriesAnalysis 83
WhatisIDEA’sPurpose? 83
ASimpleScheme:ThePurchaseFraudofanEmployee
asaVendor 86
StagesofUsingIDEA 87
Notes 89
Chapter7: CentrifugeAnalytics:IsBigDataEnough? 91
SophisticatedLinkAnalysis 92
TheChallengewithAnti-Counterfeiting 93
InteractiveAnalytics:TheCentrifugeWay 93
FraudAnalysiswithCentrifugeVNA 95
TheFraudManagementProcess 100
Notes 105
Chapter8: i2Analyst'sNotebook:TheBestinFraudSolutions 107
RapidInvestigationofFraudandFraudsters 108
i2Analyst’sNotebook 109
i2Analyst’sNotebookandFraudAnalytics 113
HowtoUsei2Analyst’sNotebook:FraudFinancialAnalytics 116