Analytics Magazine Analytics Magazine, November/December 2014 - Page 40

mu lti- in d u st ry p rob le m Employing big data and analytics to reduce fraud By Drew Carter and Stephanie Anderson (l-r) E ven a cursory Internet search of fraud crimes delivers a multitude of results: the Little League secretary siphoning off a few thousand dollars, the trader known as the London Whale losing more than $6.2 billion for JPMorgan Chase, and hackers gaining access to customer information at major retailers and international banks. Fraud is a multi-industry problem. Banking and credit are the ones that most frequently come to mind for the average 40 | a n a ly t i c s - m a g a z i n e . o r g person. However, retail, transportation and manufacturing are also prone to fraud. In fact, it would be difficult to name an industry impervious to it. Take the telecommunications industry, for example. According to the FTC, telecom fraud accounted for 34 percent of its fraud complaints in 2012, up from 20 percent in 2010. Verizon estimates that fraud costs the industry $4 billion a year. In telecommunications, fraud is most frequently focused in three areas: • Defrauding telecommunication companies w w w. i n f o r m s . o r g