SAP Takes Aim at US$3.5 Trillion of Fraud

Tue Mar 19, 2013 9:00am EDT

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SAP® Fraud Management Analytic Application to Help Companies Detect Fraud
Earlier for Reduced Financial Loss and Lower Fraud Investigation Costs
LAS VEGAS,  March 19, 2013  /PRNewswire/ -- To help companies worldwide address
the estimated  US$3.5 trillion  worth of fraud that occurs every year1,  SAP AG 
(NYSE: SAP) today announced the  SAP Fraud Management analytic application.
Powered by the SAP HANA platform, SAP Fraud Management aims to enable
enterprises across industries such as insurance, public sector, banking,
healthcare and utilities to detect, investigate, analyze and prevent
irregularities or fraud in "big data" environments. The announcement was made at
 GRC 2013, being held  March 19-22  in  Las Vegas.  


The typical organization is at risk of losing up to five percent of its revenues
to fraud1. In 2011, the total potential projected worldwide losses due to fraud
were  $3.5 trillion1. SAP Fraud Management is intended to help companies address
potential, significant losses due to fraud; the high cost and effort for fraud
investigation and false alarms; difficulties in keeping track of changing fraud
behaviors; and the inadequate or obsolete detection capabilities associated with
newer fraud patterns. As part of the broader portfolio of SAP solutions for
governance, risk, and compliance (GRC), SAP Fraud Management is planned to be
adaptable to unique business needs and varying industries, in order to:

* Detect fraud earlier to reduce financial loss:  The application is planned to
provide real-time detection that leverages the power of SAP HANA and offers
robust integration capabilities into business systems, along with alert
notification and management features  
* Improve detection accuracy at less cost:  SAP Fraud Management aims to help
minimize false positives through real-time calibration and simulation
capabilities on large volumes of data  
* Prevent and deter fraud situations:  With the combination of rules and
predictive methods, SAP Fraud Management is intended to help users optimize
fraud scenario analysis and adapt measures to changing fraud patterns to better
prevent fraud

"The rise of big data is forcing organizations to improve their governance, risk
and compliance efforts. Being able to validate who did what, and provide a
defensible audit trail, is key in addressing potential fraud," said  Michael
Rasmussen, chief pundit, GRC 20/20. "There is a potential for organizations to
face massive loss due to fraud. This is becoming even more of a risk with the
ever-increasing amount of data being generated. Helping customers detect even a
fraction of these cases would represent significant savings - employing advanced
solutions to help detect and deter fraud makes sense."  

A Compelling Case for the Insurance Industry
Fraudulent insurance claims and associated costs are at historical highs. In the
U.S., insurance companies are faced with non-health-related insurance fraud of
more than  US$40 billion  per year, while the Association of British Insurers
cites more than 2,500 fraudulent claims per week, totaling more than GPB 900
million per year2. Insurers can no longer afford traditional fraud detection
methods with low recovery rates. Developed with leading international insurance
companies in a co-innovation development model, the SAP Fraud Management for
Insurance analytic application is planned to offer:

* Closed-loop fraud processing:  detection and prevention of claim fraud across
multiple line of business with direct impact on the loss ratio  
* Seamless Integration:  real-time information flow between fraud and claim
processing in both directions to help ensure consistency and optimized process
* Optimized Investigation:  intuitive functionality and alerts, supporting
investigators from first fraud signal to final decision

SAP Fraud Management for Insurance is intended to help insurance companies
automate fraud detection, improve fraud investigation efficiency and avoid
payments on illegitimate claim requests.  

Savings for Government At All Levels Through Early Fraud Detection
Tax evasion and social services fraud not only hurt the reputation of government
agencies, but contribute to ever-increasing budget deficits. SAP Fraud
Management is planned to help reduce fraud and non-compliance by cross-checking
tax returns or social service applications against millions of related data
records in real time and immediately spotting whether the submitted applications
match information from other data sources. Applying predictive algorithms from
SAP HANA on a large number of transactions aims to uncover hidden fraud patterns
and produce alerts on suspicious transactions that might be missed by
conventional fraud and compliance rules.

"With organizations at risk of losing five percent of their revenues due to
fraud, companies need better analytical tools to identify and prevent fraud
before losses occur and to stay apace with changing fraud behaviors - in real
time," said  John Schweitzer, senior vice president and general manager,
Analytics, SAP. "SAP Fraud Management powered by SAP HANA will enable
enterprises in all industries to detect, investigate, prevent and monitor
irregularities or fraud in environments with ultra-high volumes of data, from
both SAP and non-SAP systems. With SAP HANA as its backbone, SAP Fraud
Management aims to bring unprecedented processing capabilities."

For more information, visit the  SAP Newsroom.

 12012 Report to the Nations on Occupational Fraud and Abuse, Association of Certified Fraud Examiners    
 2Association of British Insurers                                                                         

About SAP
As market leader in enterprise application software, SAP (NYSE: SAP) helps
companies of all sizes and industries run better. From back office to boardroom,
warehouse to storefront, desktop to mobile device - SAP empowers people and
organizations to work together more efficiently and use business insight more
effectively to stay ahead of the competition. SAP applications and services
enable more than 232,000 customers to operate profitably, adapt continuously,
and grow sustainably. For more information, visit  

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