Fraud management and economic crime is a newer educational track designed to equip information technology (IT) professionals with skills to intercept, negate and prevent economic crime and fraud from occurring. As the global economic marketplace is increasingly Web-driven, the need for enterprise fraud management (EFM) solutions is expanding rapidly. If you have an interest in IT, business and law enforcement, earning one of the many online fraud management master degrees may be the perfect educational track for you. Learning how to choose the best enterprise fraud management solution for your own company or for your clients, if you plan to enter this career, is valuable to know.
Enterprise fraud management systems, or EFMs, are a newer entrant into the field of comprehensive IT security solutions. The independent research organization Forrester Group recently released a white paper with surprising information about how much merchants pay annually to combat or cover fraud losses. For instance, banks pay between $12 and $15 billion annually to attempt to curb fraud-based losses. Online merchants spend between $200 million and $500 million per year for the same. With this level of cash outlay, it’s understandable why EFMs are here to stay. EFMs are IT-based security solutions designed to detect fraud in its earliest stages. EFMs examine system users, accounts, transactions, products, consumer and merchant channels to combat fraud at every level. The more sophisticated EFMs also examine groups of users, merchants, consumers or channels to detect organized crime and fraud rings.
How to Select an EFM
Selecting an EFM starts with your company’s or client’s risk management and assessment process. CEB TowerGroup, another independent research and analysis group, reports spending on EFMs is predicted to grow by an additional 50 percent in the next four years. So the question is not whether your organization needs its own customized EFM solution, but rather what type and what level of EFM system you need. Learn more about the criteria to select the EFM solution right for your organization:
- The EFM solution should be flexible, evolving and customizable.
- The EFM solution must be scalable.
- The EFM solution has robust, real-time analytics.
- The EFM solution must be able to aggregate individual transactions together with data from across the organization to detect organized fraud patterns.
The first and most important aspect of choosing an EFM to protect your organization from fraud and economic crime is it must have the flexibility to conform to your specific risk management needs while being customizable enough to fit with your existing systems.
The second important aspect of choosing the best EFM solution for your organization is to choose the one that can grow with you. Keep in mind you may not be able to foresee all growth opportunities that are will come your way or how fast some opportunities may require you to grow. Pick an EFM solution that will expand quickly if the need arises.
According to a number of independent research groups, the EFMs of the future will be the solutions that lean heavily toward performing data analytics in real time. This is where the real power of an EFM tool kicks in to detect fraud in the moments before it makes an impact.
Aggregate Data Collection
For the EFM solution to be worth your investment, it must be able to collect data not just from individual events but also assemble a “big picture” of how that data interacts across your organization. Without this ability, the EFM solution will lack the power to detect the beginnings of organized fraud or crime as they occur — whether it is originating from outside your organization or from the inside.
With this checklist, you have the information you need to select an EFM solution that can work with your existing system, grow with your organization, analyze the incoming data effectively and also look for signs of organized fraud or crime across your organization as a whole.
About the Author : Carole Schwim graduates this year with her master’s degree in fraud management. She completed an internship with an IT security firm where she worked on installing EFM systems for several clients.