Collaborate to beat fraud

SIR – I WAS INTERESTED TO READ Michael Burling’s article in the January edition of Security Management Today (‘Show a little enterprise’, SMT, January 2005, pp32-33). I wholeheartedly agree with his sentiments.

The Financial Services Authority (FSA) is indeed advocating a new ‘fighting fraud in partnership’ policy, based on the need for financial concerns to work together in tackling the issue. While many organisations are worried that sharing customer information means sharing competitive advantage, there’s a way in which information sharing may become a reality without helping similar, rival organisations.

The FSA estimates that the financial sector is currently losing £11 billion per annum to economic crime. Fraudsters recognise that the best way to disguise their activities is to spread them across multiple organisations. That’s really why information sharing is essential, as it will make criminal activity far easier to spot.

One approach to the problem is to use modern technology to convert structured client data into a ‘signature’ which doesn’t hold the original information. Instead, it contains a representation of enough data to match records with similar names, addresses and descriptions without the need for revealing any sensitive details.

Basic rules could be put in place to identify which claims should be checked as potentially fraudulent across the industry, and signatures of these would subsequently be sent out to other organisations for matching. More details would only be revealed if there were a match (for example, when an individual has committed the same type of fraud across more than one company). This means records can be shared without a business losing its competitive edge.

Corporate organisations’ Boards of Directors who think that not investing in sophisticated anti-fraud measures will save them money are practising a false economy. Fraud could end up costing them far more in the long run.

There’s no doubt that implementing technology that enables the sharing and matching of customer information will benefit the entire industry.

Ed. BSIA chief executive David Dickinson has written to Members of Parliament urging them to oppose the Government’s current plans to axe the majority of funding for UK security exporters. SMT has decided to reproduce the missive as it makes several key points which the Government and the industry at large would do well to bear in mind...