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ASTUTE Fraud Day 2016: Fraud Trends and Announcement of National Fraud Prevention System

03 October 2016 ASTUTE

Highlighting new technologies and methods of combating fraud in South Africa, The Financial Services Exchange T/A ASTUTE recently hosted its first annual Fraud Day at The Forum, Discovery Head Office Sandton. The inaugural event was suitably themed, Fraud: Remaining One Step Ahead. In addition, ASTUTE announced the launch of its national fraud prevention system scheduled for introduction to the industry in Q2 2017.

Darryl Smith, ASTUTE Business Development Executive shares, “To tackle the evident need to prevent fraud in the financial services industry, we have started a journey of interlinking measures and entities in the fraud environment via an integrated fraud prevention driven system which spans the various key service providers. 

We have a role to play in the financial services industry fraud prevention environment, and through risk mitigation, combining and sharing vital industry information, ASTUTE aims to become the industry’s joint data source providing for a national preventative system to collectively fight fraud.” 

According to guest speaker Jaco De Jager of the ACFE (Associate of Certified Fraud Examiners), in South Africa, an estimated R160 Billion is lost annually due to fraud – equating to what it would have cost to build ±2.4 million RDP houses. According to de Jager as much as $3.7 trillion is lost due to fraud annually globally. Based on ACFE research, fraud tends to span the categories of assets misappropriation, financial statement fraud schemes and corruption schemes. 

Jaco explained to industry stakeholders that research indicated that of 285 reported fraud cases examined in Sub-Saharan Africa, 60.7% of fraudsters have a university degree or higher, are in their late 30’s, 82% are male with the top departments involved in fraud being Accounting, Operations and Purchasing. De Jager also emphasised that corporations need to take note that alarmingly, and contrary to popular belief, 64% of fraud takes place with the assistance of, or is perpetrated by individuals within the organisation. 

Guest speakers Andre Vorster, PwC Security Manager explained that South African organisations suffer significantly more procurement fraud, human resources fraud, bribery and financial statement fraud than organisations globally, while Coert Janse van Vuuren, Forensic Specialist and Handwriting Examiner at Discovery Forensics revealed that internal fraud is a growing trend, threatening overall company profitability. 

Coert showcased how handwriting analysis is more valuable than many in the industry are aware of. According to Coert, as an established field of scientific study, the analysis of handwriting, forged documents, signatures, counterfeit documents and suspect insurance claims assists in saving insurers hundreds of thousands of Rands each year by reducing the number of fraudulent claims paid out to deceptive individuals. 

With insurance fraud growing locally, Coert detailed how it has become progressively more essential to pay close attention to claim documentation submitted where fraudsters see an opportunity to claim lump sums to which they are not lawfully not entitled. 

UNISA’s Hennie Lochner later delved into The Anatomy of a Syndicate, revealing the profile, modus operandi and sophisticated criminal networks that exist locally, and extended his recommendations on how the financial services industry can prevent and investigate these crimes more effectively. 

Darryl Smith closed the day by concluding, “Working together, we as the stakeholders of the financial services industry can combat fraud for the greater good of South Africa.” 

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