Understanding the mindset of fraudsters can be enormously helpful to fraud fighters. A seminal tool for this is the fraud triangle, originally conceived some 70 years ago by Criminologist Donald Cressey[i].
The fraud triangle essentially states that three elements drive criminals to execute fraud:
In general the fraud triangle applies equally well for internal frauds and external frauds. The fraud triangle applies very well for individuals who are executing a fraud, though it is less applicable for larger scale frauds executed by organized crime groups. Regardless, a company generally cannot control either rationalization or pressure, but certainly can heavily impact opportunity.
How can you impact opportunity? For insurance fraud, procurement fraud, and other frauds, it can be very beneficial to:
For insurance fraud, procurement fraud, and many other frauds, DataWalk software can enable you to quickly detect suspicious claims, transactions, or contracts, in order to reduce the risk of paying out to fraudsters. DataWalk provides a highly flexible scoring engine such that you can easily generate risk scores that utilize all of your available internal/external data, and enabling you to iteratively tune these scores to continuously improve. DataWalk customers have used this approach to realize remarkable accuracy in automatically identifying suspicious conditions. DataWalk also provides you with the capability to investigate previous transactions or cases, in order to recognize organized and/or ongoing frauds.
The timeless fraud triangle continues to provide a valuable framework for fraud fighters, and DataWalk software provides a tool to help eliminate the opportunity leg of the triangle.
[i] Donald R. Cressey, Other People's Money (Montclair: Patterson Smith, 1973) p. 30.