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Enterprise Fraud and Misuse Management

The analytical evolution of prevention


From credit card companies to insurance providers to federal health care agencies, nearly any organization that makes large disbursements knows the frustration of the “pay and chase” cycle in which the entity pays an illicit claim and then tries to get the money back after the mistake comes to light. Every year, for example, the Centers for Medicare and Medicaid Services (CMS) pays out hundreds of billions of dollars to cover health care claims while simultaneously working to recover billions for claims determined to be fraudulent. Firms in many other industries face similar challenges. Forrester Research (Forrester) estimates that merchants pay between $200 billion and $250 billion in global fraud losses annually, while banks and financial services organizations lose between $12 billion and $15 billion each year to fraud, often because thieves’ fingerprints – especially those associated with fraud rings – are only evident in hindsight.

Thanks to a new breed of analytical software and platforms that use a Big Data approach, some organizations are now better poised to spot and stop fraud before the money leaves the organization. CMS recently began implementing a new analytics platform called the Fraud Prevention System (FPS) that evaluates new claims in the context of the filer’s claims history and potential connections to identified fraudulent filers. Likewise, some financial services firms are implementing a variety of Enterprise Fraud and Misuse Management (EFM) systems to get a more complete view of transaction activity. The EFM systems use technologies that can process enormous volumes of structured numerical data around transactions, and can also integrate with other sources of information, including unstructured text-based fields such as names or comments, or even “voiceprints” pulled from telephone conversation recordings.

To find out what, in Deloitte’s view, differentiates this new breed of EFM platforms from previous generations of analytic tools, download the PDF.

As used in this document, “Deloitte” means Deloitte Transactions and Business Analytics LLP, an affiliate of Deloitte Financial Advisory Services LLP. Deloitte Transactions and Business Analytics LLP is not a certified public accounting firm. Please see for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.

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