Beyond Competitive Edge

Fraud Scam Phishing Caution Deception Concept

How many times have you sat through a data analytics presentation focused on identifying hidden data trends which can be used to gain competitive edge, for example, in retail and other sales-focused industries? Quite a few, I guess, and we’re all guilty of churning out this same tired old messaging, which probably explains why I’m increasingly asked by customers for examples of real business applications beyond this one example. Applications that they can build themselves using Spotfire and other TIBCO tools to squeeze extra value from their not inconsiderable big data investments.

A good example was at a recent TIBCO event where, while talking to the CIO of a large financial institution over lunch, I was told that his IT team had persuaded him to buy into our Fast Data product set, but he wasn’t seeing much of a return other than a few KPI dashboards. Was that really all our products were good for, he wondered, pressing me to tell him what else could be done with the analytic tools at his disposal.

Fortunately (both for him and my credibility), I knew that one of our Spotfire teams had been doing a lot of work on financial use cases, so I asked him if he would be interested in being able to monitor real time financial systems for regulatory compliance, fraud, and abuse. Of course the answer was yes, against a background of increasing legislation and a pressing need for self-regulation he would, most definitely, be interested. But he already had specialist tools designed to address this issue and wanted to know what Spotfire could add or do differently.

That was easy, as specialist tools like those the customer was using tend to suffer two big disadvantages. A high number of false positives—who hasn’t had a credit card wrongly blocked for “suspicious” activity, for example—and the need for time consuming manual investigations which can take days to complete.

They can also be expensive and difficult to customize to meet specific customer needs, whereas a general purpose data analytics tool like Spotfire is designed expressly to be both affordable and easily moulded to suit a wide range of applications. In fact, I was able to point this particular customer to a template produced by our own data scientists designed to help companies looking to use Spotfire for just this kind of financial crime fighting application.

Designed to be used to identify potential money laundering activity, credit card and insurance fraud, suspicious trading practices, and so on, the template I pointed him to places machine learning at the center of a Spotfire-based crime detection system. More specifically, it uses a mix of historic and current data to learn how to spot risky or abnormal behavior exhibited by transactions, clients, suppliers, and other players using two types of models.

The first model is based around supervised learning algorithms that tell you how similar to past fraud a new transaction is. The second, unsupervised learning, looks at how odd and unusual a new transaction seems when compared to past transactions. The first guarantees accuracy, minimizing false-positives, while the second is self-learning, enabling Spotfire to adapt to new threats and to become better at spotting financial crime with every additional transaction it processes.

Another plus is the ability to test models created using the fraud busting template offline then, at the press of a button, send them to the TIBCO real-time event processing engine to monitor transactions as they occur. The models can also be configured to trigger alerts when suspicious activity is suspected. Moreover the thresholds involved can be set through easy-to-use dashboards, enabling line of business users to leverage the power of advanced analytics without requiring a degree in advanced maths or computer science.

Lastly, when alerts are produced, a pre-defined investigative template is automatically produced, pulling together the content and context of the suspect transaction to expedite the investigation process and address the problem of how long it takes to decide outcomes with specialist anti-fraud software. When integrated with TIBCO’s Business Process Management (BPM) system, it can make sure the process is fully auditable with all the right documents generated at the right time, the right people informed, and the required signatures collected.

All in all, it’s a solid and very effective fraud busting solution that really does address the pain points of specialist alternatives. Needless to say, the CIO involved was very interested and left the TIBCO event better informed as to what he could do using Spotfire and the other Fast Data tools already in use within his business.

If you want to do the same and move on beyond gaining competitive edge with Spotfire, and if detecting financial crime is of interest, check it out by watching the demonstration and reading the accompanying white paper on the Financial Crime Buster Analysis Template.