I was pleased to read that data mining has delivered spectacular results for the Insurance Fraud Bureau. Using Detica’s specialist services they were able to uncover gangs causing or faking car accidents, resulting in 74 arrests and a five-to-one return on investment, saving insurers at least £8 million.
I’ve long been a proponent of the use of data fusion, mining and visualisation techniques to detect fraud and solve business problems. I’ve sponsored several such projects in the past and was highly impressed with the potential for saving money through these techniques. The difficulty has always been the first hurdle of developing a convincing business case to invest in the necessary resources, technology and services. That’s always the challenge when the technique is unproven and results cannot be guaranteed. It’s a leap of faith. When budgets are tight it’s hard to persuade business managers to invest in experimental methods.
But as the IFB discovered the investment is more than justified. As Richard Davies, their Deputy Chairman, put it the results “exceeded all expectations” and “we never expected it to be as powerful as it turned out”. Yes, that’s the power of data mining. It’s one of the most under-utilised weapons against crime. And it can also solve all manner of day-to-day business problems.