IBM Launches New Software and Consulting Services to Help Organizations Tackle $3.5 Trillion Lost Annually to Fraud and Financial Crime
(ENP Newswire Via Acquire Media NewsEdge) ENP Newswire - 21 March 2014
Release date- 20032014 - NEW YORK, N.Y. - IBM (NYSE: IBM) today introduced new software and services to help organizations use Big Data and Analytics to address the $3.5 trillion lost each year to fraud and financial crimes.
Through sophisticated business expertise and analytics, organizations can take a holistic approach to address the financial losses caused by fraud while protecting the value of their brands.
As part of today's news, IBM launched its 'Smarter counter fraud' initiative, drawing on the expertise and innovation from more than 500 fraud consulting experts, 290 fraud-related research patents and $24 billion invested in IBM's Big Data and Analytics software and services capabilities since 2005. The initiative extends IBM's leadership in Big Data and Analytics and Cloud to help public and private organizations prevent, identify and investigate fraudulent activities.
Today's announcement comes at a time when a new generation of criminals are using digital channels - such as mobile devices, social networks and cloud platforms - to probe for weaknesses and vulnerabilities. The pace of this threat continues to accelerate - identity fraud impacted more than 12 million individuals in 2012, resulting in theft of nearly $21 billion, and each day the U.S. healthcare industry loses $650 million due to fraudulent claims and payments.
To address these complexities, IBM is delivering new software that allows organizations to gain better visibility and take a more proactive, holistic approach to countering fraud. This includes the ability to aggregate Big Data across a variety of internal and external sources - including mobile, social and online - and apply sophisticated analytics that continuously monitor for fraudulent indicators. The new offerings feature advanced analytics that understand non-obvious relationships and co-occurences between entities, new enhanced visualization technologies that can identify and connect fraudulent patterns closer to point of operation, and machine learning to help prevent future occurrence based on previous attacks and behaviors.
Leading analysts estimate that market demand for fraud and risk solutions is quickly accelerating. According to Gartner*, 25 percent of large global companies will have adopted big data analytics for at least one security or fraud detection use case, up from eight percent today, and will achieve a positive return on investment within the first six months of implementation by 2016. IDC estimates that the market for Financial Crime solutions alone will be nearly $4.7 billion in 2014, with a 5.5 percent CAGR over the 2014-2017 forecast period**.
'With today's news, IBM is applying many of the same tactics, techniques and procedures used by the intelligence and law enforcement communities to help commercial organizations take a holistic view of this growing and pervasive threat,' said Robert Griffin, Vice President, IBM Counter Fraud Solutions. 'These technologies allow line of business leaders to quickly adapt to emerging threats across the entire organization. Our new initiative puts Big Data and Analytics into the hands of those tasked with defending their organizations from financial losses, protecting the brand and delivering exceptional customer service.'
IBM is unique in its ability to combine market-leading software, services and research capabilities to address the full spectrum of fraud and financial crimes - from tax evasion, money laundering and cyber-attacks to threats from inside the organization. For example, the new offerings can detect cross-channel mobile fraud and prevent cybercrime enablers like phishing scams. They can enable an insurance company to review thousands of claims in real-time to flag potentially fraudulent activity while processing legitimate claims faster, or help a global bank more accurately detect and investigate money laundering activities to meet regulatory compliance.
IBM's new counter fraud portfolio builds on the company's unmatched R&D investments, and recent acquisitions of Cognos, i2, SPSS, Q1 Labs, Trusteer and SoftLayer. The new software and services include:
Counter Fraud Management Software: A single offering that brings together IBM's Big Data and Analytics capabilities to help organizations aggregate data from external and internal sources and apply sophisticated analytics to prevent, identify and investigate suspicious activity. It includes analytics that understand non-obvious relationships between entities, visualization technology that identifies larger patterns of fraud, and machine learning to help prevent future occurrence based on previous attacks. To enhance these capabilities as new threats emerge, IBM also launched a new counter fraud intelligence task force - IBM Red Cell - that will work in tandem with the IBM X-Force unit to continuously research trends, develop strategies, and deliver enhancements to the software and services R&D team.
Counter fraud service offerings: Industry-aligned services that combine IBM's consulting, software and technology expertise to help clients improve their counter fraud programs, including:
Outcome-based Accelerators: Evaluate an organization's counter fraud capabilities and provide rapid prototyping to demonstrate business value for enterprise-wide protection.
Target Operating Model: Design organizational constructs, operational governance and technology architecture to better detect to fraud, and respond and investigate exposures.
Scale and Manage: Fast implementation of strategies and technological dimensions to customize and run counter fraud programs tailored for each client.
Fraud discovery assets: A portfolio of customizable, research-developed assets that use analytics to discover fraud, waste, abuse and errors in data intensive industries and functions. These assets analyze an organization's internal data to measure behavior, and then compare the results within specific peer groups to identify anomalies that indicate suspicious activity. Based on the results, an investigation recommendation is made. The assets are available across industries for enterprise-wide discovery. The fraud discovery assets will be available in the cloud, enabled by IBM SoftLayer, with focus on the following areas:
Medical Fraud: Discovers fraud during provider, beneficiary and internal employee profiling using IBM's Fraud Asset Management System (FAMS).
Insurance Claim Fraud: Enables insurers to detect suspicious activity for claims submitted by vendors, brokers and individuals using IBM's Loss Analysis and Warning System (LAWS).
Public Tax Fraud: Empowers governments to address tax gaps by uncovering tax evasion activities and filing inaccuracies using IBM's Tax and Audit Compliance System (TACS).
Occupational Fraud: Helps organizations discover fraud for accounts payable, travel and expense claims, and other fraud committed by employees.
Counter fraud as a service: IBM will offer four levels of counter fraud capabilities as a service - including Hosting, Application Management, Behavior Modeling & Scoring and Analytics & Referral Generation - that use a subscription-based model to give clients flexible choices that match their business needs and technical requirements. IBM's Counter Fraud Center of Competency gives clients global access to expertise including fraud industry experts, advanced analytic capabilities and technical implementation services.
IBM has a long history working with hundreds of counter fraud clients such as the London Borough of Camden in the UK, which is using IBM Big Data and Analytics technology to streamline processes, improve services, reduce tax fraud and increase revenue. Working with IBM, Camden has been able to create a 'Residents' Index,' uniting information from multiple services to create a single, consistent view of all resident data, including the services they're accessing.
'Information we once considered unobtainable is now within our grasp,' said Hilary Simpson, Head of ICT Business Partnering at London Borough of Camden. 'We have identified at least a dozen specific examples where a Residents' Index, based on IBM Big Data and Analytics technology can help us. We have estimated that the solution could help to cut single person council tax discount fraud by five percent, potentially delivering major savings for our borough.'
For more information about IBM's Smarter counter fraud initiative, visit www.ibm.com/smartercounterfraud. Follow the conversation on Twitter at #counterfraud
*Source: Gartner Report: Reality Check on Big Data Analytics for Cybersecurity and Fraud, January 2014
**Source: IDC Financial Insights, Pivot Table: Worldwide IT Spending 2013-2017 - Worldwide Risk IT Spending Guide, 1H13, Doc # FIN240400, Mar 2013
About IBM Big Data & Analytics
Each day we generate 2.5 quintillion bytes of data from a variety of sources - climate information, to posts on social media sites, and purchase transaction records to healthcare medical images. At IBM we believe that data is emerging as the world's newest resource for competitive advantage, and analytics is the key to make sense of it. IBM is helping clients harness Big Data and Analytics to provide insights needed to make better decisions, create value, and deliver that value to customers and society. IBM has the world's deepest and broadest portfolio of Big Data and Analytics technologies and solutions, spanning services, software, research and hardware. For more information about IBM Big Data and Analytics, visit http://ibm.com/bigdataanalytics. Follow IBM Big Data and Analytics on Twitter @IBMbigdata and @IBMAnalytics.
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