Real-Time Fraud Detection

By David Schrader and Dan Graham  |  Posted 2009-11-19 Print this article Print

5. Real-time fraud detection

In tough economic times, all corporations should look at fraud because that loss comes right off of the bottom line: profit. The best way to stop fraud is not the next day but while it's happening. It's tough to get the money back from a con artist a week after the crime, even if you can find them.

Innovative retailers are using pervasive BI right on their cash registers to detect fake receipts or probable fraudulent behaviors. The minimum wage retail associate doesn't need to make tough decisions; the ADW tells them, "Yes, this is a valid receipt" or "Pass this to the supervisor immediately." The best way to save money is to never lose it.

6. Automating manual processes

One way of driving out costs in any business process is to automate some of the process, reducing the need for human labor. With an ADW, coupled with embedded process rules, some tasks that previously required complex human decisions can be automated. For banks, this can mean automating the granting of credit-even mortgage loans-through their Website instead of the more lengthy, labor-based process of consumers filling out paper forms, then mailing them to committees and so on. Insurers can automate the quoting of personalized prices on the Web, limiting their dependence on the actuarial staff.

Similarly, an insurer can automate the processing of claims with rules, data mining and BI embedded in processing steps. In all of these cases, the majority of routine situations are automated with an ADW and business rules, but a small percentage of loans, prices or claims are still assigned to people when the decision appears risky.

David Schrader is a Director of Strategy and Marketing at Teradata Corporation. He joined Teradata (formerly a division of NCR Corporation) in 1991. David held various positions in Engineering - Advanced Development until 1998 when he moved into Marketing. David has published widely in the areas of customer management, and presents talks worldwide on how companies can get a competitive edge from using technology. David holds a Ph.D. degree in Computer Science from Purdue University. He can be reached at Graham is a Senior Marketing Director at Teradata Corporation. He began his computing career as a field engineer and systems programmer with UNIVAC. In the 1980s, Dan was assistant vice president of database administration at California Federal Savings and Loan. Dan joined Teradata as its senior marketing product manager of the DBC/1012 parallel database computer. Dan speaks frequently at international conferences on the topics of data warehousing, parallel processing and real-time business intelligence. He can be reached at

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