By: Wiljo van Beek | Director, Big Data Banking & Insurance, Oracle EMEA
Fraud is on the rise. And it costs us. Global credit card fraud reached $21.84 billion in 2015, while insurance fraud in the UK alone amounted to £1.3 billion in 2016. Three-quarters of companies fell victim to fraud between 2014 and 2015, up 14 percent in just three years.
In response, companies have declared war on fraud and are using advanced analytics as their weapon. By looking for hidden correlations across the immense volume of customer, market and third-party data at their disposal, businesses are beginning to detect suspicious behavior and prevent criminal activity.
The insurance industry is taking the lead in this regard. Many insurers now analyze their internal data, such as call center notes and voice recordings, alongside social media data and third party details on people's bills, wages, bankruptcies, criminal records, and address changes to gain insight into potentially fraudulent claims.
For example, while a claimant may declare their car was damaged by flooding, their social media feed may indicate weather conditions were sunny on the day of the supposed incident. Insurers can supplement this data with text analytics technology that can detect minor discrepancies hidden in a claimant's case report. Fraudsters tend to alter their story over time, making this a powerful tool in detecting criminal activity.
The insurance sector has traditionally analyzed fraud data in silos and largely ignored unstructured data points, but this is changing. According to Morgan Stanley, a more advanced analytics approach helps insurers improve fraud detection rates by 30 percent.
Read our eBook at oracle.com/goto/transform-with-big-data to understand how Oracle Cloud Platform for Big Data helps companies uncover new benefits across their business.