The fraud landscape is changing rapidly and many fnancial institutions

are seeking to adopt a more proactive, intelligence-led approach to

managing fraud risk.
Fraud Monitoring Systems
Current environment and drivers
Financial services organisations face an
ever increasing range of challenges within
the fnancial crime arena, both internal and
external. There is increasing focus on utilising
risk management systems and making
greater use of intelligence in the response. A
number of fnancial institutions are starting
to address fraud monitoring systems at an
enterprise level, incorporating anti-money
laundering and payment screening for
fnancial sanctions. Monitoring and screening
activity can be performed within a single
environment that applies rules but also
learns and can be calibrated with new fraud
typologies.
Traditionally, fraud monitoring systems
have been designed to address specifc
fraud risks, products or delivery channels.
As the need to connect these silos becomes
more apparent, a more strategic approach
is needed. Implementing systems which
operate across the business and provide
greater fexibility to integrate new data
sources and detection models in response
to new threats is a worthwhile objective.
Accordingly, fnancial institutions are
seeking to use intelligence to inform
preventative actions, improve detection
of fraud and make investigations more
effcient and effective in understanding the
scope and nature of fraud, reducing losses.
Drivers to inform the fraud management
systems strategy and deliver a better
integrated approach to fraud risk
management include:
The need to improve performance of
existing systems which typically exist
in silos
A desire to join up disparate systems
in order to improve the intelligence
picture and move to a more proactive,
preventative approach based on activity
across product lines and channels
A changing risk profle driven by new
clearing and payment mechanisms
The need for increased agility to deal
with new threats and fraud migration to
lesser protected products, channels and
customer segments
Improve the effciency of fraud
operations to support straight through
processing and faster fulflment
Maintain and strengthen the customer
experience
Key components
Key components within the fraud systems
architecture include:
Verifcation of a claimed identity and
product application fraud checks
Transaction monitoring to identify
abnormal processing and patterns,
indicating fraud
Intelligence and case management to
enable investigators to focus on the
areas of greatest risk
The changing fraud landscape
and increases in loss to fraud
requires automated detection
systems. Selecting the
right solution is challenging.
Scarce IT resources, access
to industry experience and
fraud knowledge is essential
to getting the return on this
very costly investment. All
businesses are different,
confguring the generic fraud
system to tackle the unique
risks you face is essential to
achieve the payback on your
investment.
Fraud Investigation
and Dispute Services
Ernst & Young contacts
Antony Smyth
Partner
+44(0)20 7951 8193
asmyth2@uk.ey.com
Jon Harvey
Director
+44(0)20 7951 2785
jharvey1@uk.ey.com

Tom Salmond
Manager
+44(0)20 7951 8437
tsalmond@uk.ey.com
Ernst & Young
Assurance | Tax | Transactions | Advisory
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2448FMS.indd (UK) 07/08. Artwork byFS Design Team.
Proving the case for investment using data analytics
Prior to investing in a fraud monitoring system, performing a targeted data analytics
exercise enables frms to rapidly validate the level of risk exposure, test the practical
issues involved in a deployment and understand the data possibilities as well as limitations.
A key outcome of this is assistance in short listing systems technologies and this can
inform the system design and implementation. .
The Ernst & Young Service Offering and Approach
Ernst & Young are able to offer a comprehensive service offering across the fraud
monitoring systems spectrum:
Strategy
Definition
Market Review &
Package Selection
Implementation
Support
Analytics &
Tuning
Independent
Quality Review
The Ernst & Young approach is centred on the deep industry knowledge of our Financial
Crime team, based on years of experience at leading global fnancial institutions and
successful client engagements. We work with clients and their supply partners to form
innovative and practical solutions, building teams of experienced consultants from across
Ernst & Young, teaming with client specialists to ensure successful deployment and
attainment of benefts.
Ernst & Young is able to draw upon
consultants with a range of subject
matter experience including:
Financial crime strategy
Fraud risk management
Data analytics
Information technology and
architecture
Programme management and change
delivery
Process design and performance
improvement
Regulatory compliance
Law enforcement
Fraud operations
Credit risk operations
Outsourcing and supply management
Why Ernst & Young
An independent, vendor neutral
perspective
Detailed market and vendor knowledge
An integrated delivery team with
relevant experience of similar projects
We have helped clients successfully
deliver major fnancial crime systems
projects around the world
Improved confdence in delivery and
benefts realisation
Improved effectiveness of fraud
response and faster speed to market.
Global team able to evaluate risk
and provide deployment support by
teaming with client resources and their
suppliers globally
Key questions when evaluating
your fraud monitoring systems
strategy
How well do existing systems control
current and emerging risks?
What is the three year vision?
How can the relationship with IT be
used to support implementation
of this vision and manage IT and
operational costs? How will you
obtain adequate change capacity
from IT to ensure prioritisation is
given to these projects?
How responsive are your current
systems to new threats and how
quickly can they be adapted to detect
new fraud patterns? Do they allow
business power users to make
changes to detection rules without
the need for involvement from IT?
How great is the level of automation
within operational areas? Where can
operational benefts be realised and
customer service improvements
be made through improving case
management capabilities?
How can the business case process be
managed to ensure timely allocation
of funding to enable you to meet
future fraud challenges, linked to the
strategic investment process?
Does your fraud system support
effective customer care and support?