A fast and effective system of fraud investigation is giving banks a new weapon in the battle against fraud, including identity theft and money laundering. The unique approach to the problem is proving so successful that the company responsible for its development, Datawatch International, has seen its business double in the last 12 months.
A number of unique features in the Datawatch systems have contributed to their success. They are:
Highly automated, reducing the number of staff required to monitor for non-compliances;
Cost-effective compared with conventional systems â four times the number of cases can be investigated by half as many people;
Highly accurate, reducing false reports of fraud which drain banksâ resources and undermine customer confidence;
Broad-based, allowing simultaneous investigation of all a customerâs accounts, together with e-mail traffic, voice recordings and instant messages;
Legally watertight, as each case study maintains a legal chain of custody which cannot be subsequently altered, enabling information gathered to be used as evidence in court;
Compliant with the Financial Services Authority (FSA) requirements.
Andrew Newcombe, Datawatch Internationalâs compliance specialist, said: "Unfortunately, the manual systems used by banks often throw up too many false positives â around 95% - and these cases take too long to resolve, leading to delays and frustration for the customer, who may be investigated simply for using a credit card abroad or making a large money transfer."
"Our systems are based on establishing links between existing sources of information, both internal and external to the company. They are exceptionally flexible and also very fast, so cases can be investigated in minutes rather than hours or days, helping banks to limit the damage caused by any one fraudster before it escalates."
He said that one major customer was dealing with nearly 500 cases of suspected fraud every day and expected this number to pass the 1,000 mark within a year. One case was reported recently to have cost a bank Â£50 million in fines, legal fees and remedial public relations to re-establish its good name.
Andrew added: "Fraud investigation is now the hottest topic in the industry. Half of our meetings with companies in the financial sector relate to this issue, and we believe it will increase still further as the problem escalates âparticularly on the Internet."