Enterprise-wide FRM Framework to Identify and Mitigate Frauds

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Deloitte India’s fourth edition of the India Corporate Fraud Perception Survey aims at understanding the leadership perceptions around corporate fraud in the disruptive environment. According to the Corporate Fraud Survey India 2020, organisations must invest in an enterprise-wide fraud risk management framework and use enhanced tools with a scalable and customised interface.

Mitigation of frauds in India has been undertaken by organisations through surprise audits and checks on random samples. As data is now stored in IT systems, Indian organisations are moving towards a framework that uses technology to detect and mitigate fraud at earlier stages. Organisations must adopt advanced technologies for data visualization, statistical mining, text mining, and voice searching concepts to achieve a successful FRM framework.

To run rule- and AI-based analytics to detect any discrepancies in transaction monitoring, organisations require an interface that integrates data from all complex systems. As organisations will not be required to collect data manually and integrate it, the enterprise approach will be efficient in investigations. As data will be collected and integrated on one platform, more time and energy can be put into analysis and other investigation processes.

 

To ensure that organisations move smoothly to an enterprise-wide FRM platform, here are some suggestions.

  1. Build a Business Case:

As organisations that have applied enterprise-wide fraud prevention programmes have mixed outcomes, there is a need to navigate and outline expectations for the programme and explain the expected benefits to the management. The business case should include the necessary aspects such as the visibility of red flags, reduced efforts for data gathering that can be invested in analysis and fraud prevention.

  1. Seek the Right Expertise:

Implementing an enterprise-wide framework is a challenging task considering the elements involved, such as the selection of the right tools. For such tasks, third-party experts should be consulted by risk and compliance leaders for their expertise in various tools and implementing services.

  1. Build In-house Expertise to Run the Platform:

After the implementation of the framework, accurate expertise and knowledge are required to interpret the results correctly, and the success of the framework relies on the user's experience. After implementing an enterprise-wide framework, emphasis should be given to training users in the framework for the best results.

  1. Be realistic about Turnover Time for Meeting Expectations:

There is a perception that integrating data is easy, and the results of implementing such a framework are noticeable immediately. That is incorrect as any technology/ framework cannot be adopted and effective overnight. Organisations should focus on success through a series of pilot projects initially.

Integration of structured and unstructured data and implementation of advanced analytics is essential to mitigate suspicious and fraudulent transactions. Integration requires time and effort and cannot be achieved overnight. Organisations must ensure that even though there are various tools available, proper implementation is essential for their success. Thus, organisations should focus on implementing a scalable interface created with the consultation of experts to complement the needs of the organisation.


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