By Dave Hannon
$3.5 trillion dollars.
That's how much will be lost this year due to fraud. It's a staggering figure, but what's even more staggering is the amount of business impact behind that figure. On average, a business will lose 5% of its revenues to fraud. Think about how much work goes into driving a 5% increase in revenue? Simply eliminating fraud would do that for most organizations.
This week here in Las Vegas at the SAPinsider GRC 2013 event, SAP took a major step towards helping companies put that 5% back on their top line by releasing SAP Fraud Management, an analytic application powered by SAP HANA.
In his keynote address at the conference, John Schweitzer, Senior Vice President and General Manager of SAP Analytics, gave attendees a preview of the solution that showed how data and analytics can be used to detect fraudulent insurance claims by an insurance provider. Insurance companies lose about $40 billion each year to fraud, by the way, a sizeable slice of that $3.5 trillion pie.
Schweitzer also pointed out that the public sector is a strong candidate for this solution as well and emphasized that if fraud is detected early enough, it can be fixed and if it's predicted, it can be prevented.
The announcement of this new solution was received well by attendees and SAP partners alike. Steve Biskie of High Water Advisors told me he was eagerly awaiting this announcement from SAP. On his blog, he&nb
sp;wrote this about the new solution: "The implications of this are massive--sophisticated analytics be run in real-time, and do so directly on production systems without the need to export data. This means that organizations can not only detect fraud in real-time, but potentially event prevent the underlying transactions from completing before the business is harmed. As if this isn't enough, the SAP Fraud Management application also has predictive capabilities, including sophisticated network analysis (the identification of statistical patterns between disparate transactions to identify potential relationship) and a scoring engine that allows users to easily change analytic weightings on-the-fly to rule out false-positives."
And the timing for this new solution to battle fraud couldn't have been better, say experts, as several trends begin to merge. "The rise of big data is forcing organizations to improve their governance, risk and compliance efforts. Being able to validate who did what, and provide a defensible audit trail, is key in addressing potential fraud," said Michael Rasmussen, chief pundit, GRC 20/20. "There is a potential for organizations to face massive loss due to fraud. This is becoming even more of a risk with the ever-increasing amount of data being generated. Helping customers detect even a fraction of these cases would represent significant savings — employing advanced solutions to help detect and deter fraud makes sense."
It was an exciting day for GRC attendees and today looks to be another great one with SAP's North American CFO Joel Bernstein taking the keynote stage. If can't be here in Las Vegas, be sure to check back here on the Insider Learning Network for updates or follow the news on Twitter using hashtags #GRC2013 #Financials2013 #Admin2013 and #BI