The key to effective cyber-crime prevention is not more data, but the right data – and using analytics to gain actionable insights. Getting it right requires three vital elements.
As I said in my two previous posts, the effective use of data is insurers’ best chance of combatting the fraud and other forms of financial crime that have become the scourge of the industry. But to do so they need to integrate the data they collect from a diversity of sources, and use sophisticated analytics that can generate useful insights.
Three major elements are needed to achieve this:
1. Enhancing the quality of data
This is a problem for many insurers, especially those that operate in different regions and across different lines of business, using multiple systems. The first step is to define the right data quality metrics that address things like accuracy, integrity, completeness and timeliness. Then you need to establish central data screening and reconciliation to enhance the quality of the analysis. The third step is to improve data governance, with clear rules for data ownership and quality.
2. Analytics to transform data into information and insight
Tactical measures, such as the use of text mining and other analytics tools, can help insurers understand the risk posed by specific prospects, customers or transactions. Ultimately, though, information is only useful if it can be acted upon. This requires the alignment of processes and people along with coordination and empowerment to make use of the information.
3. Applying data visualization techniques
As the volume and complexity of data increase, it becomes helpful to have data visualization techniques to look for visual patterns and identify inconsistencies. New and emerging technologies can be used to obtain insight not only from traditional data sources but also e-mails, chat messages or voice messages. As customers increasingly interact with their insurers via mobile and digital channels, and employees bring their devices to work, the ability to accurately recognize a device and to capture data about it can be vitally important in preventing cyber-attacks.
We’re seeing a widening gap between companies that simply regard their data as an asset and those that make it their primary strategic asset to drive decisions and outcomes. Data-driven decision-making — using big data — gives insurers a better understanding of their operating environment. This in turn improves the quality of their decisions and helps them prevent financial crime, protect their reputations, and create value by helping them provide a more meaningful customer experience.
To read my other posts on this topic, click here.