The evolution of fraud prevention, detection and risk mitigation

Since the advent of the internet, fraud – and prevention and detection of fraud – has moved forward in giant steps. In doing so, it has become a constant battle between business and fraudsters.

On one side of the battle, fraudsters become ever more sophisticated, embracing new technologies and the exponentially increasing opportunities presented to them by new technologies and customer demand for faster, easier access to products, purchases and services.

On the other side, businesses strive to stay one step ahead. To evolve new methods of fraud prevention and detection. To move faster and smarter than the criminals. To foresee new threats before they occur and to create multi-layered solutions which address the complexities of a rapidly changing and highly flexible business environment.

In a relatively short time we have moved from basic data matching to syndicated data sourcing, layered analytics and network visualisation. What comes next?

A brief outline of the evolution of fraud and prevention and detection technologies...


By the late 1990s, rudimentary local data-matching systems were being introduced to improve the speed and accuracy of risk identification.


In the early 2000s companies began to collaborate and share data on fraudsters, with combined intelligence sources like National SIRA, Cifas, IFB and Experian’s National Hunter. Cross-sector data matching meant that fraudsters could no longer operate freely across multiple sectors. This, in turn, led to them becoming increasingly sophisticated. With online trading models and ID data being made more accessible through the spread of social media, organised fraud became the main problem – using a variety of methods like account takeovers, phishing and malware attacks.

Network visualisation tools such as Orion were developed and by 2012 companies were looking to create a 360-degree picture through third-party data enrichment sources such as politically exposed persons intelligence, sanctions data, criminal intelligence and deceased information along with intelligence from email addresses, mobile phones and other internet enabled devices. Next came geographic, social and biometric profiling which created a full risk profile for financiers and insurers.



The challenges today

Fraudsters continue to evolve their tactics and technologies. The battle against crime is constant, raising new challenges as data becomes even more freely exchanged and customers expect almost instant access to products and services.

49% of global organisations have experienced economic crime in the past two years.

According to PwC’s 2018 Global Economic Crime and Fraud Survey, nearly half of global organisations have experienced economic crime in the past two years. Fraud is a growing issue for financial institutions, as tech-savvy criminals increasingly target the payments industry in new and inventive ways.

"From deception and impersonation scams to sophisticated malware and data breach attacks, fraudsters are constantly targeting customers’ personal data. Once they have it, the consequences are costly. Not just in terms of financial loss and disruption, but also with damage to reputation, business relations and staff morale.”

“Once restricted to transactional related finance fraud now encompasses many more channels and products as on-line trading models have become the norm for all types of financial services.

Today fraud attacks risk affecting many different customer touch points and include areas such as new account fraud, account takeover, fraudulent purchases, deposit and check fraud and disbursement or invoice fraud. Security and risk management leaders responsible for fraud prevention (fraud prevention leaders) report that mobile interfaces, call centers, payment systems and retail locations are all vulnerable to financial fraud attacks. The expansion and reach of fraud today creates financial losses so extensive that observers have a difficult time measuring its cost.”

75% of 1,000 UK respondents would lose all trust in an organisation – and would no longer use their services – in the event of a cyber-attack

Financial institutions, like every environment where money is dealt with, have always attracted thieves, con artists, scammers and fraudsters – and of course, they always will. With criminal methods becoming more and more organised and sophisticated, the landscape of economic crime is constantly changing. So is the world of banking:


Digitally based challenger and mobile banking is answering the needs of a changing customer profile. More and more people want to have finances and financial control at their fingertips, with the number who use mobile banking apps set to reach 2.2 billion by 2020.

Along with the growth in mobile payment apps, there is a rapid growth in API channels thanks to initiatives like PSD2. The speed and convenience these apps offer to users also brings vulnerability to data and identity theft and online fraud.


Traditional systems and processes present real challenges and problems.

These institutions may hold vast amounts of data, but redesigning and changing their ways of working to meet the demands of the ever-evolving digital age is extremely demanding and costly. However, to survive, they must evolve.

Organised fraud rose to 59.58% during 2017

Synectics Solutions’ latest statistics show that organised fraud rose to 59.58% during 2017, which is a clear increase on the 57% for the same period the year before.

Criminals will constantly find new ways to commit fraud, so it’s important to update your data insights and your organisation’s ability to detect and prevent fraud fast enough to fight this ever-present threat. Outdated defences won’t keep you safe.

To fight modern-day criminals, you need modern-day weapons, whether you’re a small to medium enterprise, a large corporation, a new start or an established organisation.

"Criminals will constantly find new ways to commit fraud, so it’s important to update your data insights and your organisation’s ability to detect and prevent fraud fast enough to fight this ever-present threat.”

The secure financial institution of tomorrow will be the one which adopts the technological innovations of today

Current threats and future challenges


Customers want access to products and services instantly.


Is becoming prioritised to reduce questions needed.


Personal data is more available than ever before.


By the end of 2017, 66% of fraud, set across finance products, was identity fraud1.


For insurance policies in 20171.


Is a particular issue for the finance and insurance industry.

How fraud prevention has evolved

The growth of fraud has become more and more of a problem since the old days of paper based systems and opportunist fraud. This has led to a rapid evolution of fraud prevention and detection systems.

The challenge has been to take the fight to the fraudsters, and as more and more sophisticated solutions emerge, they add layer after layer of protection – and will continue to do so, as the speed of change in the financial and trading environment continues to accelerate.

Local data – SIRA

By the late 1990s, simple local data-matching systems were being introduced to improve the speed and accuracy of risk identification. Synectics Solutions launched SIRA in the early 2000s to collate and analyse localised data within individual companies to enable effective risk assessment and decision making.

Over the last 20 years, decision making via SIRA has continued to evolve, providing users with innovative solutions to assist in combatting financial crime.


SIRA brings together a multitude of machine learning algorithms and comprehensive workflow management to put real control into the hands of front line investigation teams. It enables companies to:

Enrich their intelligence with multiple data sources – Synectics in-depth “Data AppStore” of 50 data sets helps clients to orchestrate the optimal customer journey whilst enabling the creation of sophisticated fraud strategies. By integrating additional data sets such as criminal intelligence, politically exposed persons and sanctions intelligence, public sector and deceased data, email, device and mobile intelligence, as well as renowned data services such as Cifas, CRIF and CUE, organisations can deepen their intelligence, enabling them to identity more potential risks.

Combine enriched data with organised workflow - the sophisticated workflow management module and task referral capabilities of SIRA enable companies to profile, rank and prioritise referrals or investigations in an optimal way to enable fraud investigators to deal with an ever growing case load.

Benchmark exposure to adverse activity - SIRA clients have access to a wide range of analytical services, enabling them to benchmark their exposure to fraud across their business sector. This can help them identify whether there are any weaknesses in their business processes and determine their best course of action.

Make important decisions quicker - the real-time element of SIRA provide organisations with a solution that will meet the most ambitious of service level agreements, decision time scales and customer expectations. SIRA Real-Time allows organisations to make risk based decisions quicker and more accurately.

Configure the solution for business specific situations - SIRA can be customised to fit an individual company’s exact business model and requirements.

Shared intelligence and cross sector analysis – National SIRA

Fraudsters rarely operate in just one sector. They are opportunists and will use the techniques they find successful in one area across many others.

Starting in the early 2000s, companies like Synectics Solutions, Cifas, The Insurance Fraud Bureau and Experian began to collaborate and share data on fraudsters, creating combined intelligence sources. Criminals were no longer able to operate so freely across multiple sectors.

Synectics work with a number of partners to ensure that SIRA users have access to the most relevant, accurate and timely data, to inform and enrich their investigations.

Partners of Synectics include TransUnion (including iovation and CallCredit), Equifax, Experian, Dow Jones, Cifas and the Government’s Cabinet Office. Via application programme interfaces, partners’ data sources are fed into National SIRA to provide users with a more detailed and comprehensive view of applications entering their local systems for investigation.


National SIRA, launched in 2005, brought together the combined database and strengths of individual SIRA clients to create a new way of working collaboratively.

Member companies – currently around 130 – share data and information to produce a syndicated national database.

National SIRA is now successfully deployed in a large number of insurance, financial, retail, telco and car rental companies throughout the world.

"Cifas reported that 32% of offenders submitting false insurance claims had also committed fraud in other sectors, across a range of products.”

Cross-sector fraud data could unlock millions in additional insurance savings, Cifas and Hill Dickinson, 2015.

Network analysis and visualisation – Orion

Network visualisation is a method of explaining and understanding complex stories, relationships and interactions based on evidential data.

"As more traditional rule based fraud decision solutions struggle to spot more complex, organised fraud, network visualisation has become part of many counter-fraud offerings.”

The Orion system’s visualisation and analysis functionality provides clients with the ability to look deeper into hidden connections – to easily identify existing and emerging suspicious network activity, enabling the identification of potential organised crime threats.


Orion can either be fully integrated with Synectics Solutions’ SIRA system to provide an enterprise-wide, multi-layered financial crime prevention solution, or deployed as a standalone network analysis and visualisation system capable of analysing and integrating with any third party database. It can improve reaction times and operational flexibility, prevent losses and identify weaknesses or gaps in policies, processes or systems.

Merely checking for data anomalies is no longer enough to tackle fraud – analysing data anomalies does not always unearth the complex patterns and relationships that exist in data networks.

Sometimes, the significant data items which could identify an emerging fraud trend can be four or five degrees of separation away from any apparent direct correlation – Orion can help visualise this.

Identifying fraud patterns quickly and efficiently – Orion users can configure a range of automated network monitoring and generation capabilities, along with a sophisticated case referral workflow engine, to help identify and prioritise network investigations.

This process speeds up the ability to make good decisions from vast quantities of complex data.

Orion can be integrated fully with a client’s existing systems – to deliver the exact kind of solution required.

360° view of data helps show direct and indirect links between items such as address details contact information and vehicle details, as well as people and locations – and the patterns, trends and behaviours that emerge.

50,000 auto-generated networks are produced each year helping to prevent financial crime.

£24 billion of fraud is under investigation within Orion networks, each year.

£3million saved by one of the big six banks in the UK in the first six months of using Orion.

Predictive analytics – Precision

Predictive analytics takes the detection of, and protection from, fraud to another level – by predicting what is likely to happen in the future.

It uses a variety of techniques including data mining, predictive modelling and machine learning to analyse current and historical facts and make predictions about future or otherwise unknown events. With predictive analytics, the aim is to be one step (or more) in front of the fraudsters, by foreseeing possible situations and actions.

"By combining intelligence from the National SIRA database with Precision’s analytical tools there was a 300% increase in fraud detection compared to traditional methods for a major finance provider.”


Precision, developed by Synectics Solutions, provides access to leading data scientists – as well as providing a predictive modelling platform that’s capable of analysing the largest of data sets and producing actionable results in real-time.

It is a fully hosted 'software as a service’ (SaaS) solution – which makes it highly cost effective as clients don’t need to recruit their own data scientists or invest in expensive hardware.

Highly accurate results through a multi-layered approach to data analysis – Precision’s multi-layered approach offers the ability to combine machine learning functionality with leading edge data science, to deliver incredibly fast and highly accurate insight and predictions that can transform a company’s ability to make quicker, more successful decisions across a variety of scenarios.

Identify and respond to risks more quickly – using Precision’s sophisticated behavioural analytics and predictive scoring capabilities, clients can unlock their ability to adopt a truly proactive approach to reducing fraud or financial crime by evolving your processes.

Profile good customers in real-time and improve the customer journey – integrating Precision into operational data can deliver the ability to fine-tune a company’s marketing or approvals process to deliver faster, more effective decision-making when approving or communicating with existing or potential customers.

Software that’s capable of blending multiple data sources and leading-edge modelling techniques – Precision is capable of incorporating a multitude of data sources and statistical models to enable clients to leverage the widest possible base of intelligence when creating their predictive capacity.

Continuous risk assessment – Recall

It is of course essential to constantly monitor changes in existing customer data, especially in the light of significant increases in account takeovers, sleeper fraud and deceased impersonation – along with regulatory changes and changes in customer circumstances and behaviour patterns. An ongoing assessment of risk, validation and actions provides a valuable governance tool covering the whole customer journey. Recall is an effective system which enables clients to manage and monitor ongoing customer relationships to reduce fraud by screening their entire database on a regular basis. It notifies them of any negative intelligence which may have arisen after a client has been initially screened and approved, so they can take appropriate action.


SIRA Recall alerts clients to fraud within their existing customer database and can provide positive reassurance that they are taking precautions to reduce exposure to this kind of risk.

This continual precaution against fraud and compliance related risk keeps client data refined and up to date, giving them greater confidence that customers have not become an unacceptable risk, and are genuine.

What does the future hold? Analyst recommendations

One of the worlds leading technology analyst organisations made a variety of recommendations recently to help advise companies about the methods of adoption that should be considered when building a multi-layered approach to financial crime defence.

In their report they recommend that security and risk management leaders responsible for fraud prevention should:

  • Gather input from and collaborate with peer leaders managing technical and financial risks for a greater understanding of the risks facing the organisation.

  • Create a platform supporting flexible, real-time, context-driven analysis of activity and behaviour across all interaction channels and use cases.

  • Deploy techniques such as real-time analytics, fraud attack intelligence and dynamic risk management to support goals of transactional trust, brand integrity and protection of the customer experience.

This report also recommended adopting a flexible modular approach to fraud defense.

“As digital fraud attacks become more sophisticated and identity theft becomes more complex, it’s time to rethink fraud’s functional detection and protection architecture.”

“Security and risk management leaders must strive for a contextual, risk-based approach to address multiple use cases.”

"This is reflected in the multi-layered approach taken by Synectics Solutions.”

This can be seen in the following diagram, which shows the seven levels or layers of a common fraud technology stack, which Synectics Solutions products could easily align with:

"Organisations embracing technology through automation, predictive analytics and artificial intelligence are the ones that will benefit from valuable data insight and the improved ability to detect and prevent fraud.”

By fighting back with the latest weaponry, these businesses will make themselves a harder target. With advances in AI and machine learning, they can help protect their institution, shareholders and customers from the ever-advancing sophistication of fraudsters.

Cybercriminals, and those looking to perpetuate fraud or financial crime, are using increasingly clever techniques. But thanks to technological innovations, businesses can stay one step ahead.

Machine learning systems will increase their defence measures – these self-educating systems can learn, adapt and reveal any developing patterns that may suggest fraudulent activity.

And the more data they accumulate, the more effective they become at detecting fraud and keeping your organisation safe. This technology will also reduce the amount of time wasted investigating false positives.

“Fraud prevention technology is growing in complexity. Machine learning, artificial intelligence and cloud-based systems are becoming essential tools to future proof a robust defence.”

The secure financial institution of tomorrow needs to invest in the right technology and the right people – and to collaborate to increase the volume and variety of the data they capture. They will adopt the benefits of big data: understanding, predicting and improving. They will embrace change. And along with fraud prevention and detection, they will continue to evolve.

It is essential for companies not to leave their businesses exposed to risk or harm. Fraudsters will always attack the least defended targets and the weakest links and blind spots in any defence.

They will operate cross-channel too. By embracing a multi- layered cross-channel detection and prevention scheme companies can defend themselves more effectively. Those who do not, and who are left behind, will be the most vulnerable – and face, to use the evolution analogy, the risk of extinction.

How Synectics Solutions can help you

At Synectics Solutions we welcome change and continually push boundaries. It’s this innovative spirit that has positioned us as a leading software provider for the financial industry and why 98% of our clients establish long-term partnerships with us. Supported by us and our data science capabilities, your institution will become safer and more intelligent. You will be able to make better decisions, reduce risk and become more efficient. As the late, great Stephen Hawking said, ”“Intelligence is the ability to adapt to change”. We can help you adapt, with our value-driven fraud prevention and risk mitigation software.

With our products SIRA, Orion and Precision, you will reduce risk and losses, increase operational efficiency and enable business growth through working with trusted customers. Our fraud prevention and detection solutions will help your organisation to evaluate large volumes of data, respond quickly to future trends, reduce false positives, fast track good customers and easily identify existing and emerging suspicious network activity.

By supporting your organisation with our fraud prevention and detection solutions, we can help you overcome potential threats, implement change and successfully adapt for a secure tomorrow. Wherever you are on your journey to effective fraud prevention, our multi-layered, cross-channel solutions can help you evolve your protective system – aligning with and enhancing your existing fraud strategy, and taking it to new levels as the battle against crime continues. Talk to us today.

For more information about Synectics Solutions, call 0333 234 3417 email or visit


1: National-SIRA-Annual-Fraud-Trends-2017

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