Outsourcing – are you heading in the right direction?
The evolution of data
For many years the conversation around data has always been one that contained some sort of controversy. Data is important to every business and to share data was something extraordinary to do back in the day – of course for understandable reasons – data is worth gold and in the wrong hands destructive. The most acceptable moderately conservative way to allow data to bring meaning into any business was to make use of excel sheets and business rules. Business entities also had the tendency to work in silos not sharing data. In an environment where fraud and corruption are rife traditional rule-based approaches to fraud detection often resulted in false-positive flags. It also resulted in unnecessary investigation, unnecessary expenses and most importantly damaging relationships with clients or employees.
Artificial intelligence solutions and machine learning fraud models are becoming increasingly important to businesses as an advanced tool to help extract valuable insights out of vast amount of data. Machine learning developed fraud models aim to identify fraudulent behaviour more accurately and greatly reducing the number of investigations performed. It also reduces client or employee friction. It also offers the opportunity to implement automation of numerous time-consuming and repetitive tasks, providing insight to support rapid business decision making with better outcomes.
However, together with the tremendous benefits there are challenges implementing machine learning risk strategies – especially when considering that many businesses and organisations still do not have a thorough understanding of data science, how the sophisticated technology works and how to interpret artificial intelligence-generated data.
Against the backdrop of these and many other challenges, outsourcing is one of the most powerful strategies to address the immediate needs of data management, only if the outsourcing arrangement:
- Supports the business or organisation’s anti-fraud control measures already in place;
- Extends an organisation’s ability to prevent and detect fraud through additional control measures; or
- Acts as an independent and objective anti-fraud control measure.
Benefits of outsourcing
Organisations and businesses can focus on core business strategic issues whilst having access to machine learning fraud models and specialised expert advice in terms of fraud prevention and detection – specially in high volume, quick access to cash environments.
This approach will give the organisation the advantage of instant cost-effective innovation without making use of internal resources responsible for day to day operations.
Proactive and reactive data monitoring are important within any organisation but can be more dynamic if it is supported by data across organisations within the same conceptual equivalence. Such data identifies new trends as well as re-appearing ones and indicates patterns amongst the different trends. It also anticipates new trends that can support prediction strategies in advance.
Do not fall behind
Some organisations can cause irreparable damage to their businesses by outsourcing too early while other companies do not believe in outsourcing any of their functions at all and believe that home grown products and systems are always better. These organisations stand to fall behind to more innovative competitors by ignoring the available opportunities.
It is also true that some organisations make use of outsourcing but due to various reasons the product does not meet the operational needs. This also causes serious damage to their businesses resulting in distrust of proven outsourced business solutions.
There is risk involved when deciding to follow the outsourcing route, however successful organisations have realised that it is rarely cost effective and efficient to develop internal artificial intelligence or machine learning fraud models, strategies and systems when there are professional companies with a proven track record and with highly effective systems, strategies and software necessary to prevent and investigate fraud.
A well calculated risk
Successful implementation of such partnerships is all about finding the right business partner who have the capacity, experience, and skill to seamlessly integrate with existing internal strategies and systems. Outsourcing should be treated as a well calculated risk to enhance business opportunities and to provide advantages in the market in terms of proactive and reactive fraud prevention. The preferred outsourced partner should support the organisation or business to innovate and generate the highest quality results possible.
If your aim is to become the industry leader in areas where innovation is critical., then make sure outsource wisely.
Executive Head: XTND