Insights: Covid Has Made Fraud Investigation That Bit Tougher

Dennis Toomey, Global Director of Counter Fraud Analytics and Operations for BAE Systems, takes a look at how Covid-19 has made things tougher for fraud investigators.

Investigating insurance fraud was never an easy task, with criminals constantly changing the way they operate to exploit changing technologies and social behaviours.

The pandemic has thrown another spanner in the works, with lockdowns and social distancing measures restricting the ability of investigators across all sectors to collect evidence and interview claimants face-to-face.

A report by Law360 highlights the problem affecting UK enforcement agencies across the board, as measures designed to check the spread of COVID-19 hamper ongoing investigations and prevent new ones from proceeding.

Capacity to tackle fraud has also been hit, as teams are stretched because of the number of people infected, shielding or isolating. Remote working is fine up to a point, but it does get in the way of some crucial elements of investigation that are most effectively done “on the street.”

There’s also the additional pressure on resources caused by the amount of effort that has to be diverted from an organisation’s day job to tackling the operational and health and safety issues thrown up by the pandemic.

Lawyers report that they’ve noticed a slowdown in investigations by the Financial Conduct Authority as it has had to focus on operational resilience within the financial sector and the implementation of protective measures.

And when HMRC suspends inquiries into taxpayers and businesses because of capacity constraints, and the Competition and Markets Authority pauses significant investigations into suspected illegal collusion on price, you know there’s a problem.

So if insurers are going to keep the pressure up on the fraudsters, and not lose the ground they’ve fought so hard to gain, they need to get clever and find other ways to gather information effectively and spot scams.

There are a range of emerging technologies that are providing sophisticated tools to help them achieve that.

The use of voice analytics and biometrics is a core weapon in the war on fraud, and has already proved invaluable during phone interviews with customers and claimants.

Geospatial mapping, satellite imagery and analytics are great tools to assist in remote investigations and evidence collection.

Document and image analytics can be crucial in identifying potentially fraudulent photos and altered or forged invoices. Plus automated social media and open source intelligence mining can uncover hidden relationships and connections between entities.

Apart from technology, perhaps the most fundamental element of a successful counter-fraud offensive is collaboration and co-operation – between businesses and organisations, amongst their own teams, and across geographical boundaries.

At best, operating in silos slows progress; at worst, it could prevent the discovery of a cross-boundary fraud. Deploying solutions without a joined-up strategy may result in limited, isolated wins.

There’s no simple answer to this challenge, but the use of homomorphic encryption could allow for more secure pan-industry collaboration. Another idea gaining significant traction is that of fusion centres, designed to bring together experts from fraud, cybersecurity, threat intelligence, risk and other areas to share insights and drive a more proactive approach to tackling fraud risk.

The longer the pandemic continues to have an impact on counter-fraud resources, the more the industry needs to find a way to work round it.

This article was produced in association with BAE systems