SAP Fraud Management Analytic Application to Help Companies
To help companies worldwide address the estimated R32.39 trillion worth of fraud that occurs every year1., SAP AG (NYSE: SAP) has announced the SAP® Fraud Management analytic application. Powered by the SAP HANA® platform, SAP Fraud Management aims to enable enterprises across industries such as insurance, public sector, banking, healthcare and utilities to detect, investigate, analyses and prevent irregularities or fraud in “big data” environments.
The typical organisation is at risk of losing up to five percent of its revenues to fraud1. In 2011, the total potential projected worldwide losses due to fraud were R32.39 trillion1. SAP Fraud Management is a cross industry solution intended to help companies address potential, significant losses due to fraud; the high cost and effort for fraud investigation and false alarms; difficulties in keeping track of changing fraud behaviors; and the inadequate or obsolete detection capabilities associated with newer fraud patterns. As part of the broader portfolio of SAP solutions for governance, risk, and compliance (GRC), SAP Fraud Management is planned to be adaptable to unique business needs and varying industries, in order to:
- Detect fraud earlier to reduce financial loss: The application is planned to provide real-time detection that leverages the power of SAP HANA and offers robust integration capabilities into business systems, along with alert notification and management features
- Improve detection accuracy at less cost: SAP Fraud Management aims to help minimise false positives through real-time calibration and simulation capabilities on large volumes of data
- Prevent and deter fraud situations: With the combination of rules and predictive methods, SAP Fraud Management is intended to help users optimise fraud scenario analysis and adapt measures to changing fraud patterns to better prevent fraud
“The rise of big data is forcing organisations 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,” said Michael Rasmussen, chief pundit, GRC 20/20. “There is a potential for organisations to face massive loss due to fraud. This 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 — employing advanced solutions to help detect and deter fraud makes sense.”
The perfect Solution for Fraud/Theft Detection in Utilities
The SAP Fraud Management solution enables Utilities to detect potential fraud and theft immediately, thus enabling them to act on and prevent future losses as well as limit the amount of immediate loss. To be able to do this in real time puts the utilities industry at a distinct advantage and puts them one step ahead of fraudsters and thieves. The solution is also able to predict potential bad debtors and proactively manage the situation to ensure ongoing revenue flow.
A Compelling Case for the Health Insurance Industry
SAP Fraud Management for Insurance is intended to help insurance companies automate fraud detection, improve fraud investigation efficiency and avoid payments on illegitimate claim requests. Fraudulent insurance claims and associated costs are at historical highs. In South Africa alone, according to the statistics shared at the recent Board of Healthcare Funders conference on fraud, it is estimated that the total fraud costs in the South African healthcare system equate to approximately R22 billion each year. This contributes to the cost pressures in the healthcare system, and ultimately affects all medical scheme members, health professionals and the economy as a whole.
Savings for Government At All Levels Through Early Fraud Detection
Tax evasion and social services fraud not only hurt the reputation of government agencies, but contribute to ever-increasing budget deficits. SAP Fraud Management is also planned to help reduce fraud and non-compliance by cross-checking tax returns or social service applications against millions of related data records in real time and immediately spotting whether the submitted applications match information from other data sources. Applying predictive algorithms from SAP HANA on a large number of transactions aims to uncover hidden fraud patterns and produce alerts on suspicious transactions that might be missed by conventional fraud and compliance rules.
“Based on the 5% of Annual Turnover being lost due to fraud – per ACFE Global Fraud Survey, if it was applied to SA’s GDP per the World Bank, it would equate to US$20.41 billion – this is roughly equivalent to R188 billion based on the current exchange rate, said Pfungwa Serima, CEO of SAP Africa .“To address this issue, companies need better analytical tools to identify and prevent fraud as well as stay abreast of changing fraud behaviours in real time before losses occur,” added Serima