Improve Fraud Investigations by Combining Smart Workflows with Data

Go from situational awareness to actionable intelligence.

It is a cruel, yet rewarding world for those of us working in compliance – at least that is what we tell ourselves. We take great pride in the efforts we make in the battle against financial economic crime. Even still, the pressure rises every day, while much of the work we do does not always feel rewarding.

Rising Pressure

Changing laws and regulations demand increasing responsibility from financial institutions and their compliance departments. Not complying with these laws and regulations usually result in punishment – either in the form of a fine or significant reputational damage. The mere thought of these punishments alone can drive a financial institution to shift their priorities within the compliance department to a more ‘punishment avoiding’ approach. Ask yourself: are we fighting the battle against financial economic crime, or are we just living up to the expectations of the regulatory supervisor?

On the other hand, we are often faced with news about how fraudsters, money launderers, and other criminals are getting smarter and better. The increase in technological adaptation worldwide, combined with the application of social engineering, creates a whole new array of tricks and techniques fraudsters can use to commit their crimes.

We have reached a point where fraud and forensic investigations are nearly unpredictable from the start of an investigation, which can make it unclear what to expect, and which resources are necessary.

Needless to say, something needs to change.

Change – in a way that relieves pressure from you, in a way that satisfies the supervisor, and in a way that contributes to the battle against financial economic crime. The fraudsters are getting smarter. Now, it’s your turn.

The New Way of Working: Investigations 2.0

As a RegTech company, we are constantly thinking about how we can solve the biggest challenges in our field with our expertise and technology. We took the traditional way of working, regarding fraud and forensic investigations, and brought that to a whole new level by combining a workflow-driven way of working with data-driven investigations.

The investigation starts the same way as before. Every validated alert that imposes a risk above a certain threshold, should be investigated, or at least, followed up. Initially, a workflow will be defined that describes the steps and activities to be performed in order to conduct the investigation.

The configuration of a workflow begins with listing the various statuses and defining the possible transitions between them. On our own platform, ForensicCloud, cases moving in a pre-defined manner, from status to status, can be regarded as the basis of the workflow. Each case has a starting point (usually ‘new’) and an endpoint (usually ‘closed’). The workflow status is visible in many ways during the investigation. For example, visually – as seen in the next image of a simple workflow.

Each status has a set of protocols, depending on the type of case. These protocols define which activities need to be done, what information needs to be gathered, and from what sources this information can be derived. Each step guides an end-user through the workflow of a case, showing only certain sections belonging to a status, with the corresponding entry fields, help-texts, and work instructions. This ensures the end-user gathers the right data, safeguarding a complete and qualitative result.

For the more complex cases and workflows, conditions may apply, for instance for status transitions or dependencies between entry fields. Finally, teams and owners need to be assigned so it is completely clear who is responsible, and who needs to initiate the actions.

Additionally, the entire process is optimized for efficiency through the use of Robotic Process Automation (RPA). RPA supports the end-user throughout the complete investigation process. For example, it checks if the input of all necessary fields are filled in correctly, all the way to doing PEP checks and business validation on status transitions, and more.

In many cases, this process is sufficient for gathering all the necessary information to draw conclusions and decide on any potential risk remediation measures.

Combining Workflow with Data-Driven Investigations

In other cases – particularly the kind we often face today – new risks are identified, and it is not immediately clear what caused them. When this occurs, additional investigations or activities may be necessary, in addition to the predefined actions in the workflow.

Especially since it is not always clear what you can expect during your investigations, the solution you use should allow for optimal flexibility during the investigation.

This means at any point – in any status – the rightful investigator should be able to, change priorities, intervene in processes, assign new tasks, integrate new data sources, combine cases, and involve external (authorized) experts. With these capabilities even the most complex investigations can be resolved and potential risks can effectively be remediated.

Making the Best use of Your Data

Finding a way to look beyond complexity and focus on the essentials can be tough. We are used to terms like customers, employees, companies, et cetera – but, if you look beyond all the administration, legislation, and bookkeeping, you will find real people.

In real life, a person can be a customer, user, manager, and employee all at the same time. An individual person can have hundreds of types of relationships. Every single relationship may require different business concepts. This is why large enterprises end up with specialized systems for every single relationship (e.g. CRM, HRM, ERP systems, etc.) They spend large sums of money to acquire, host, and manage them.  In a perfect world, this all works out fine. In the real world, it doesn’t. Most systems can’t handle the kinds of simple complexities.

The ForensicCloud architecture is set up in a way that provides flexibility for configuring the data model towards the data of the customer. ForensicCloud has a data integration layer that makes it possible to connect to internal and external data sources, separate entities from the facts, and extract the most value out of your data. 

This helps bring you from situational awareness to actionable intelligence.

Relieve the Pressure

Fraud and forensic investigations require flexibility, critical thinking, and judgement calls throughout every step of the process. Not only should your investigation software help you comply with current laws and regulations, it should also shield you for this battle and future battles against financial economic crime.

Want to learn more about how BusinessForensics can help you relieve pressure from the regulatory supervisor and aid you in the battle against financial economic crime? Schedule a call or watch a demo.


Darrnell Chotkan

Darrnell is the product marketeer of BusinessForensics. Two notable dreams of his are seeing ForensicCloud being used worldwide and reaching his goal of being a specialist in the world of financial crime prevention.