Community
Intelligence – artificial or real – is only as good as the information it uses. Location intelligence helps contextualize a situation and can augment machine learning and other applications of artificial intelligence. How can location intelligence be applied to regulatory compliance initiatives to help combat financial crime?
Introduction
Intelligence (artificial or real) is only as good as the information it uses. A higher volume of relevant information provides deeper context to a situation, resulting in heightened intelligence, increased value, and better outcomes.
Location intelligence is a data asset that helps contextualize a situation and can augment machine learning and other applications of artificial intelligence. This post considers how location intelligence can be applied to regulatory compliance initiatives, specifically fraud examination and forensic audit, to combat financial crime.
Fraud Examination and Forensic Audit
Fraud examination is the discipline of resolving allegations of fraud from tips, complaints, or accounting clues. It involves obtaining documentary evidence, interviewing witnesses and potential suspects, writing investigative reports, testifying to findings, and assisting in the general detection and prevention of fraud*.
Forensic audit is the process of investigation used to build a case that supports fraud examination. It is the intersection of financial principles and the law, and therefore, applies the following:
Points 2 and 3, above, are particularly relevant to this post. The collection and analysis of evidential matter needs a variety of data assets to support a comprehensive investigation. Critical thinking – sometimes referred to as lateral thinking, or thinking “outside the box” – is a disciplined approach to problem solving and guides our thought process and related actions. Critical thinking is required to contextualize patterns and connections across evidential matter.
Location Intelligence Is Context
Think about where you are right now. You may be at a specific address. If you have location services enabled on your phone, you are also located at specific coordinates relative to the rest of the world. However, the intelligence of your location is more than that.
The neighborhood that you are in can be characterized by demographics and consumer preferences. It also can be described in relation to the proximity of other neighborhoods that may have similar or very different characteristics. The people around you have mobile devices that are interacting with social media, streaming a live event, or making a purchase. Video is capturing movement, and machine sensors are analyzing usage and scheduling maintenance.
Location intelligence applies the multiple layers of information that surround you. The better you are able to logically connect these layers of information, the more location intelligence you have.
Back to Evidential Matter
Location intelligence continues to grow as a critical component of analytics, and it is being applied to more and more scenarios across industries through social media, connected devices, distributed systems, the internet of everything, and overlaying all of that with just about any dataset that can be collected.
In financial services, location intelligence provides an important and actionable level of information that ties together a customer profile, from on-boarding to know-your-customer and financial crime investigations. Referring back to Fraud Examination and Forensic Audit, above, location intelligence can be a critical component of evidential matter.
A Scenario
Should Party A be investigated? It is a questionable circumstance, at least.
As it relates to forensic audit, location intelligence provides additional layers of information that tighten the interrelationship among auditing, fraud examination and financial forensics in a dynamic way that adapts to political, social, and cultural pressures over time.
Summary
Fraud examination and forensic audit encompasses much more than just the review of financial data; it also involves techniques such as interviews, statement analyses, public records searches, and forensic document examination to identify questionable circumstances.
Location intelligence can help identify transaction anomalies more quickly, verify customer place of business visually and more efficiently, and flag sensitive cross-border conditions and proximity risk. All of these are vital in securing the proper documentation needed in a robust forensic examination.
*Notes:
The organization’s obligation is to report suspicious activity, not to stop it, by submitting a SAR (Suspicious Activity Report). There are two levels to this:
This content is provided by an external author without editing by Finextra. It expresses the views and opinions of the author.
Alexander Boehm Chief Executive Officer at PayRate42
05 September
Alexander Saleh Head of Partnerships at Coincover
02 September
Alex Kreger Founder & CEO at UXDA
Welcome to Finextra. We use cookies to help us to deliver our services. You may change your preferences at our Cookie Centre.
Please read our Privacy Policy.