Description: An older type of social network, and it’s being used to help detect fraud. It is the connections between people in the physical world.
Date: March 8, 2011
Banks, telecoms providers and insurance companies, among other businesses, are using analytic software to correlate all of their various data sources to produce visualizations of relationships between customers and customer activity so that they can identify suspicious behaviour. And they are seeing incredible results, says Dan McKenzie, fraud solutions specialist at SAS Canada. Financial organizations are finding 20 to 50 times more fraudulent activity than they did without the tools, says Mr. McKenzie, because a computer can quickly analyze much more data than a human investigator and flag suspected mischief.
For example, fraudsters will take out a credit card, run up bills on it (they can get up to 150 per cent of the stated credit limit), then disappear without paying it off. They do this repeatedly under different names and rake in substantial sums of money, with the card issuer none the wiser. But using link analysis, fraud hunters can identify links between these apparently different people, determine they are actually one person and build a map of the fraudulent activity that helps investigators spot the culprit when they apply for a new card. Read rest of story
Questions for discussion:
- How can Social networks help businesses detect fraud?
- Are there any downsides with using these tools to detect fraud in terms of giving up public privacy?