While technology is not a silver bullet to improve fraud prevention and detection programs, it is undoubtedly a proven tool to increase its effectiveness. Yet our survey, Reduce Government Fraud with a Dynamic Approach, indicated that one-third of government entities have not implemented technology as a component of their anti-fraud program. With an alarming 53% of government agency respondents agreeing that fraud risk is on the rise, technology provides a great opportunity to close this gap when implemented prudently.
Here we discuss four reasons why government entities are hesitant to implement technology.
- Cost. Many fraud program owners cite the cost of technology implementation as a barrier and/or reason why they haven’t taken that step yet. While budgets are tight across all levels of government, there is a misconception that all technology is expensive. The technology options available to automate or aid in fraud prevention and detection are not all cost-prohibitive, creating opportunities for most programs to identify the technology solution that fits within their budget and provides immediate efficiency, effectiveness, and coverage benefits. Specifically, robotic process automation solutions tend to cost less and work with the agency’s existing technology infrastructure.
- Time. Similarly, program owners often assume that implementing a technology solution will be a time-consuming effort that will disrupt their existing staff. Program owners envision a multi-year implementation that will be outdated as soon as it’s ready to go live. The good news is that similar to the cost concern, the time needed to successfully implement a fraud prevention and detection solution varies based on the technology selected and the outcome desired. There are a number of low-code/no-code options available to program owners that will create meaningful efficiencies in their fraud prevention and detection efforts. And while it is true that, for a technology to be successful, employees must be effectively trained, this investment of time is minimal when you consider the efficiencies generated further down the road.
- Maintenance. As we know, the fraud landscape is ever-changing, which means that you can’t just “set and forget” your technology solutions. While many technology solutions, such as rules-based scenarios, predictive analytics, and monitored AI/machine learning, will need to be monitored and updated for changes in fraud schemes, the time required to make these updates will be incremental to a program that is already actively scanning the fraud threat landscape and monitoring for changes.
- Need. Lastly, we often find that program owners are hesitant to rock the boat when it comes to their fraud prevention and detection programs. While they recognize that there are opportunities for improvement in terms of execution, efficiency, and effectiveness, they justify the status quo, unwilling to take on the time, expense, and change associated with incorporating a technology solution. We saw the inherent risk in this approach play out during the pandemic as a number of critical programs saw a surge in activity and were unable to scale fast enough to meet demand. Another risk factor in this scenario is that unexpected attrition can have a detrimental effect on fraud prevention and detection programs. Without technology programs in place that can handle the increase in volume, this could leave the program vulnerable.
While these are all valid concerns, the variety of technology options available to program owners allows agencies to achieve incremental program improvements, while addressing their concerns, roadblocks, or constraints. The anti-fraud technologies most used by our survey respondents in order of popularity include:
- Rules-based scenarios
- Predictive analytics
- AI
- Robotic process automation
Programs that are not currently leveraging any technology should consider why they haven’t yet implemented a technology solution and look into whether any of these technologies would be a fit for their program, given their unique situation.
For more information about how agencies are creating next-gen anti-fraud programs, please read the broader survey.
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