“It’s A Responsibility For Us All” Derek Dempsey On The Fraud Industry: Part One

Rosalind Madge our consultant managing the role
Posting date: 2/26/2019 9:31 AM


Derek is a Director of Fraud Analytics for leading fraud analytics software provider, FICO. With a background in Philosophy, he is passionate about the application of advanced analytics in furthering the Fraud industry. I recently met with him to discuss the latest Fraud trends, tools and challenges for the industry.


Fraud is an ever changing landscape. What trends do you anticipate for the next 12 months and beyond? 

It is ever-changing indeed. As other routes are shut down, we will see new Fraud attacks that reflect the changing payments landscape and the continuing shift to digital, mobile and the introduction of new players due to PSD2.

For example, we’ve seen a significant shift in card Fraud following the introduction of chip and pin towards card not present or ID Theft and Application Fraud. We’re also seeing Fraudsters using AI to mount ever-more sophisticated attacks. 

From a Fraud Detection perspective, this has led to a convergence of Fraud teams towards a more holistic financial crime approach, as well as increasing use of AI techniques alongside requirements for greater explainability. 

What are the biggest risk areas for businesses to be aware of? 

I’d say one of the main areas is the risk of data breach through hacking and internal leaking. 

In terms of cyberattacks, companies may feel that they can address this fairly readily. However, they need to be vigilant as hackers have some very sophisticated techniques at their disposal. FICO have recently introduced some of our AI fraud techniques into the cybersecurity domain to combat this.  

However, internal leaking probably causes bigger issues. This is more often due to social engineering than a malicious internal leak but these types of breach are difficult to detect. You need an additional level of control to detect unusual, but permitted, activity and this is challenging.  

Financial Service organisations also need to be aware of risk areas associated with new products and services. The proliferation of mobile payments and new account and payment service providers in the new PSD2 ecosystem marks another shift in payment services and this will bring in many new players. However, new products tend to be targeted by professional fraudsters.  So while we all like the greater ease and convenience, anti-Fraud measures need to keep on top of this. 

For aspiring Fraud-fighters, what skills do you think are key to being successful in the industry? 

It varies really. I got into this because I’d previously been a mathematics lecturer and then did a Master’s in AI and Cognitive Science. Fraud was, and remains, one of the best areas to apply these skills and techniques. Certainly it helps to have a Mathematical or Statistical background, but ultimately a problem-solving mindset is what really matters. 

The modern-day Data Scientist needs to be equipped with a range of technical skills to be effective, so it is useful to understand Big Data technologies such as Hadoop and Spark and how to interact with cloud-based services. Python and R have become the key analytical programming languages. Visualisation is also important so its useful to have skills in this as well. 

Soft skills are probably not the most important when it comes to Fraud Analytics but communication skills are essential - you need to work in teams and be able to ask questions and provide answers to others. Primarily, you need the ability to interrogate your Data, understand what it actually represents, understand its source and its reliability. And you need to do all this whilst keeping in mind your business objectives.

It's well known that Fraudsters are sharing their approaches, so why is the industry not? 

There are examples of sharing in industry. In the UK we have CIFAS which is one of the leading organisations for Data sharing and this provides a great service to its affiliated businesses. We have the IFB and other organisations that are based on sharing Data. The introduction of cloud-based technologies should encourage companies to share more and FICO have invested heavily in a cloud-based strategy. The next generation of FICO's flagship Falcon fraud product, Falcon X, is a flexible cloud-based, platform solution. 

However, a lot of information is currently held by the commercial sector which limits how much sharing can be done. There are many companies who provide specialised Data on email addresses, devices, IPs but all of this is under a commercial umbrella and companies do need to protect assets that they have built up over many years of research.  But most businesses do support sharing activity and see that that it’s to their benefit and there is definitely a willingness there. 

Personally, I would like to see more sharing in terms of guidance, education and awareness to customers. This is a responsibility for all of us in the sector and we need to be more proactive than just leaving information sitting on a website. Companies should be under greater pressure to provide this awareness training and, if they do, I would predict a significant reduction in certain types of fraud. 

There were a string of high profile Data breaches in the news last year such as Facebook and Carphone Warehouse. Do you think businesses are doing enough to protect customers?

I don't think so. Obviously this something we take this very seriously and, for us, most of the Data we use is anonymised so we already minimise the risk. I know that banks are investing very heavily in this and being proactive as, more than anything, there’s a huge reputational risk to a large-scale Data breach. Other sectors probably need to do more however and all sectors can improve.

Hopefully GDPR will make a big difference within the EU. There are large fines for failing to take adequate measures. Other countries are adopting similar legislation and we’re seeing non-EU businesses embrace the same guidelines as well, so hopefully that will help. 

If you could change one thing in the industry, what would it be? 

I think increasing awareness and education would make a big difference. One company I worked with mounted a big customer campaign and it made a huge impact in driving down Fraud. I think this is an underrated area. I'm aware that the FCA and other industry bodies such as IFB do produce materials but I think much more could be done.

It perhaps goes without saying that I also think that increased usage, and better usage, of Data and Advanced Analytics is crucially important to reducing levels of fraud.

Derek spoke to Senior Consultant, Rosalind Madge. Get in touch with Rosalind or take a look at our latest job opportunities here.

Related blog & news

With over 10 years experience working solely in the Data & Analytics sector our consultants are able to offer detailed insights into the industry.

Visit our Blogs & News portal or check out the related posts below.

The Power Of Programmatic: How It Keeps On Converting

Applying to anything from digital out-of-home to mobile, social media to TV, Programmatic tech continues to develop at a furious pace. And as it gets more sophisticated so, too, does its power to fuel growth across multiple industries.  So it goes without saying that Programmatic is set to remain a valuable part of the Ad Tech toolkit. As it evolves, brands can measure and enhance their creative campaigns with ever-greater accuracy to improve conversion rates and engagement. Here are some of the latest ways automated ads have been helping brands increase their influence over customers. SHORTENING THE RETAIL SALES FUNNEL  The former might of traditional brand and advertising agency models is fading. Instead, we’re seeing the old sales funnel being redefined into a more direct buying journey. Omnichannel shopping is now the norm, and screens with their accompanying ads wield plenty of power in influencing how we shop.  Thanks to growing numbers of mobile purchases coupled with Programmatic technology, brands use Data to improve the customer experience, reduce acquisition costs and push more products into online shopping baskets.  And as more retailers prioritise selling stuff online, they gain more control over customer data. Which in turn feeds their automated ads and speeds up the buying journey further. BOOSTING BRANDED CONTENT REACH  No worldwide media corporation would last long without using technology to make the best use of its resources. So it makes sense that the BBC uses Programmatic ads to create greater access to its branded content. Using data, the BBC can see what particular audience segments are into, from trending topics to the devices they’re choosing to devour news and entertainment. From there, the broadcaster twins its own data with wider industry stats to form insights that help to shape its content strategy. Automated media buying also reduces the labour that traditionally accompanied ad campaigns. The key advantage being that it frees up staff to concentrate on more creative tasks, according to Luke Fox, the BBC’s Head of Programmatic for the Asia Pacific. As a direct result of the automated ads, the BBC’s media placement has become more focused and effective, with branded content “getting to the right people at the right time.” An advertiser’s dream come true, essentially.  It is minimal effort, too. Using Programmatic tech gives organisations better access to consumers all over the world, across a wide array of media such as podcasts.  CUSTOMISED MESSAGING We all know that personalisation is a tried-and-tested marketing strategy. So it’s no surprise that programmatic ads adapt to whoever they’re targeting. Ads adapt to multiple audience variants, from age, gender, income and location right down to the device we’re using. Through constant feedback, marketers can adjust their campaigns in real time, changing their message according to where customers are, what they’re doing and how they’re responding to the ad. In theory, as more brands move their media-buying in-house, the Programmatic process becomes easier to control and adapt. Zendesk’s director of digital Aurélien Dubot certainly thinks so. After the company moved its advertising in-house, Dubot says the decision has enabled them to make instant tweaks: “We don’t wait a week or three days to adjust things, we adjust it straight away.” Whether brands choose in-house or an agency for their media buying, one thing’s for certain: programmatic is a complex system that continues to bear fruit, provided brands set clear goals for what they’re trying to achieve. Ultimately, the results will only be as good as the data, along with the marketing team’s ability to analyse it. The Programmatic industry is growing. If you’re interested in Data & Analytics, we may have a role for you. Take a look at our latest opportunities or get in touch with our expert consultants.  

Harnham's 2019 Salary Guide: The Launch Event

The 2019 Harnham Salary Guides are nearly here. Last night saw a hundred of Data & Analytics' top professionals gather to get their hands on an advanced copy and hear from some of the best in the industry.  With talks from Tom Spencer (Aviva), Mark Ainsworth (Schroders), and Anna Decoudu (118 118 Money), attendees were treated to insights into some of the world's best Data teams.  A huge thank you to everyone who came along, we hope you found the evening as enlightening as we did.  Our UK, US and European Salary Guides will all launch online mid-June. To be one of the first to get your hands on a copy, sign up to our mailing list here. 

RELATED Jobs

Salary

£45000 - £55000 per annum + Bonus + Benefits

Location

Surrey

Description

This e-commerce company within the automotive sector are looking to expand their Data Science team to work on both research and customer analytics projects.

Salary

£35000 - £50000 per annum + bonus and benefits

Location

City of London, London

Description

A well known online estate agents are seeking an Insight Analyst!

Salary

£80000 - £85000 per annum + Benefits

Location

London

Description

Very exciting opportunity to join one of the world's largest media and entertainment companies (across TV, sports etc).

recently viewed jobs