Banks and consumer credit: Fraud prevention
By means of example, we will briefly describe the experience within an internal control office of one of Italy’s most important bank groups. The theme is that of internal fraud, the type of fraud that an employee commits against the bank by using management mechanisms of the bank itself and client relations like “skeleton keys to access the loot”.
The starting point for a project with these characteristics (where the number of cases of interest is not sufficient to develop a classic forecast model) is typically that of interviewing the internal control employees so as to focus, on the basis of their lengthy experience and case studies of ascertained fraud, on what the frauds are, then the signs to intercept in the data, which authorise the suspicion of fraudulent behaviour by an employee.
At the end of this identification phase of a multiplicity of sensitive indicators, the problem is posed of providing a general vision at the respective unit level for analysis. Using synthesis statistical techniques and setting appropriate cut-off levels, a probable fraud signal is derived for each employee, thereby allowing a control on a set of limited and particularly suspicious cases. By doing this, as we can easily imagine, it is possible to significantly increase the effectiveness of the action and to considerably limit the operational costs.