CRM giant SAP is working with the Queensland University of Technology in Australia on software to hunt down fraudulent employee behaviour.
According to SAP, the new software will have the capacity to detect fraud in real time by analysing user behaviour for activities that might indicate fraudulent behaviour — such as creating a fake supplier or employee to divert company funds.
When a potentially fraudulent activity is discovered, the company is alerted and a manual investigation prompted.
The university said that the main source of current fraud detection is retrospective financial auditing, which enables any employees involved to change records of fraudulent transactions and cover their tracks before an audit.
Julien Vayssiere, senior researcher with SAP, told ZDNet Australia that the average company loses five percent of its revenues to fraud. "Many cases of fraud are very simple: people are under a lot of stress and financial pressure and will choose the easiest way [to commit fraud]," he said.
The research team has already compiled a catalogue of such fraud patterns, which will be used to create the software. Because all companies are different, users will be able to customise which patterns to search for, said Vayssiere.
Even with this customisation, Vayssiere said that "most of the time you will get false alerts". He explained, however, that users will be able to create a "white list", which will ensure that the false alerts do not constantly come up.
Along with searching for known fraud patterns, Vayssiere said the software will also search for anomalies, looking for "weird patterns in the data" in order to thwart fraudsters who change their behaviour to defeat the software's search models.
SAP's vice president of research for Asia-Pacific, associate professor Karsten Schulz, said that the research will be relevant to the SME sector, as SMEs often suffer more from a single fraud case than larger corporations in a stronger financial position.
Vayssiere, however, said most of the researchers' information has come from large corporations. He added that getting information on fraud in SMEs is difficult because "the SMEs do not have an auditing culture in the company".
According to Vayssiere, the research will be complete by the end of 2009.
