Fraud Management : An Architectural Insight

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Fraud Management - An Architectural Insight Introduction Fraud is like Love. Many believe they are immune to it. Yet they make themselves available, to fall into. Successful fraud gives a new high for the fraudsters and sleepless nights for the organizations running after securing the wealth. This rush to secure the Holy Grail from reaching the fraudsters also causes a high for a broader section of the ethical technical audience who strive to ring fence their organizations. It is quite a feat to think through the various loop holes to ensure that no repeatable fraudulent pattern is left un-scrutinized. An attempt has been made in this article to address available technologies to fend off Fraudsters, and the architectural insight needed…show more content…
The outcome of improper fraud detection or a false positive would result in Poor User Experience, Customer Dissatisfaction and Lack of Focus eventually resulting in impact to bottom line. Lifecycle of Fraud Detection Effective Fraud and risk management in any retail organization has various facets to it depending on the entities needs and market place demands. Predominantly it can be categorized in to following phases2 Assess Risk Assess the risk associated with the identified fraud. Associate the risk with a dollar value – to estimate the loss it causes to the organization. Identify the scope of analysis depending on the organizations’ risk appetite, profile the current state of fraud management and well define the requirement that needs to be addressed. Design Design the controls that prevent the detected fraud and reduce the analyzed risk. The design should not only react to the ongoing fraud, but also proactively detect any further anomalies with similar pattern across channels. Implement Deploy and Implement the design across the channels and assign a single unit responsible for fraud and risk management across the organization. This unit should be responsible for both proactive and reactive fraud prevention and risk analysis. Associating a single unit, lets the unit champion the fraud rule management and helps preserve the confidentiality associated with the execution of the rules, thereby preventing insider fraud. Simulate Simulate the rule
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