Fraud Prevention Strategy – The Best “Mime the Crime!”

What’s Your Fraud Prevention Strategy?  

All companies should have a fraud prevention strategy and it should be easily articulable. You shouldn’t have to be a “rocket scientist” to be able to describe it, tell someone else in your company what it is, or figure out how to implement it.

Strategy, or “game planning,” as it’s often referred to on Sundays in the NFL, is paramount. Fly fishermen have one and it’s called “match the hatch.” Loosely translated, “match the hatch” means matching your bait (size, color, type, shape, etc.) to the food that the fish are eating. Do so and more than likely, if you’re in the right spot at the right time, you have a very good chance of catching a really big fish. Makes sense doesn’t it?

So, what’s fishing have to do with fraud prevention strategy you ask? Everything, it seems.

The Tackle Box – Change is Key

Very seldom do you see a fisherman with just one lure in his tackle box. Simply put, if you only use one lure, you don’t need a tackle box. Most fishermen carry a variety of different baits, types, sizes, colors and actions because they never know what’s going to work day over day.

Successful fishermen are constantly changing baits trying to find out what works and what doesn’t. Rarely are their bait choices or offerings static. Fishermen change the baits color, speed, retrieve, direction all in an attempt to catch fish that want to eat the bait…but have no absolutely no interest in the hook or being caught.

Many company’s fraud prevention programs are static – meaning they rarely change bait or strategy. That’s confusing as the people committing fraud are constantly changing, evolving and adapting to the fraud prevention methodologies out there which  prevent them from getting what they’re after: your revenue, proprietary information or customer PII.

It seems like there’s something fraud and risk professionals could learn from fishermen: a static fraud prevention strategy very seldom works.

Criminals want what your company has to offer. If fishermen successfully “match the hatch” to catch fish, your fraud prevention strategy needs to “mime the crime.” By this, I mean that your fraud prevention strategy should mimic/imitate the fraud types being committed against your type of business or industry. Your weapon of choice should be a fraud prevention strategy that successfully mirrors what’s happening in the real world.

Being able to “mime the crime” means having more than one fraud prevention strategy and technological tool in your toolbox that you can use as part of your holistic anti-fraud strategy. Tools and technology should work for different fraud prevention purposes. Clearly, given the dynamic nature of the fraud landscape, we’re well past the days where one tool or technique “solves everything.”

Static Solutions

The ironic thing about fishing is that what works one day, in one place, often doesn’t work the next day even when you’re standing in the exact same place, using the exact same bait, that you caught 25 fish with the day before.

Fish move or adapt to offerings presented to them…Sound familiar? It should, as so do people committing fraud. When what worked yesterday doesn’t work today, the best fraud artists stop to figure out why that is, proactively analyzing the situation and changing their approach (technique) to something they think will work better.

Here’s the connection: the best fraud units are proactive (upwards of 70% of their fraud prevention strategy is proactive vs. reactive). There will always be a degree of reactivity in any fraud unit, as they mobilize around a risk or fraud event that just occurred.

However, truly great fraud units realize that they not only need to systematically address today’s fraud challenges but figure out the trends and patterns before they happen. This realization allows them to design and implement a forward looking fraud prevention strategy that will work when the crime hits their institution. Translation: They’re designing baits to catch future fraudsters.

The Takeaway

When it comes to fraud prevention strategy, fluidity (flexibility/change) is key. Fishermen know it – regularly changing baits and offerings until they find what works and fraud professionals should too.

Being successful, in the battle against fraud, means having the right tools and approaches in your anti-fraud toolbox and not being afraid to make changes or evaluate your anti-fraud approach as needed.

If your fraud prevention strategy isn’t working (i.e. you’re not catching fish)…CHANGE it! “Mime the crime,” or more plainly put, think like a criminal and your odds of successfully preventing the types of crimes being committed against your business today increase dramatically.