SAP application takes aim at US$3.5 trillion of fraud worldwide

SAP has introduced a new analytic application to help companies around the world address what the Association of Certified Fraud Examiners has estimated at US$3.5 trillion worth of fraud annually.

The SAP Fraud Management for Insurance analytic application – powered by the SAP HANA platform – is designed to help companies detect fraud earlier, which, in turn, is expected to reduce financial loss and lower fraud investigation costs, the company announced at SAP GRC 2013, the customer conference for SAP governance, risk and compliance, held in Las Vegas on Mar.19-22.

The analytic application “aims to enable enterprises across industries such as insurance, public sector, banking, health care and utilities to detect, investigate, analyze and prevent irregularities or fraud in ‘big data’ environments,” notes a statement from SAP.

“The rise of big data is forcing organizations to improve their governance, risk and compliance efforts. Being able to validate who did what, and provide a defensible audit trail, is key in addressing potential fraud,” Michael Rasmussen, chief pundit, GRC 20/20, notes in the statement.

Citing statistics from the Association of British Insurers, SAP reports the typical organization is at risk of losing as much as 5% of its revenues to fraud.

The potential for organizations to face massive loss due to fraud, Rasmussen says, “is becoming even more of a risk with the ever-increasing amount of data being generated. Helping customers detect even a fraction of these cases would represent significant savings.”

SAP reports the analytic application is planned to offer the following:

• closed-loop fraud processing – detection and prevention of claim fraud across multiple line of business with direct impact on the loss ratio;
• seamless integration – real-time information flow between fraud and claim processing in both directions to help ensure consistency and optimized process flows; and
• optimized investigation – intuitive functionality and alerts, supporting investigators from first fraud signal to final decision.

The application “will enable enterprises in all industries to detect, investigate, prevent and monitor irregularities or fraud in environments with ultra-high volumes of data, from both SAP and non-SAP systems,” adds John Schweitzer, the company’s senior vice president and general manager of analytics.