Anti-fraud and error – what does success look like?

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Can you predict the future? Or more accurately, can you predict a likely tax fraud or evasion before it is committed? As governments across the world seek to boost and protect their revenue streams, predictive analytics is proving a huge business asset. Predictive analytics is helping tax agencies find ways to get individuals and businesses […]

Can you predict the future? Or more accurately, can you predict a likely tax fraud or evasion before it is committed? As governments across the world seek to boost and protect their revenue streams, predictive analytics is proving a huge business asset.

Predictive analytics is helping tax agencies find ways to get individuals and businesses to pay the tax they owe and to minimise welfare fraud and error. It’s about using statistical analysis to identify and understand new methods of fraud. It helps to spot connections, such as between a tax professional and taxpayers using the same avoidance vehicles. And it matches data in order to look at the complete view of a taxpayer’s position, linking tax multiple tax data and external data sources.

Predictive analytics is clever stuff. It is already being used by a number of agencies worldwide to identify and stop common activities that transcend borders and boundaries. These include: under-declared income, abuse of company status, false information by welfare claimants, identity theft and VAT repayment fraud.

Using analytics-based solutions, agencies can quickly turn billions of data points into powerful insights. It’s an approach we’ve taken at Capgemini in our technology partnership with SAS. We’ve developed analytics-based solutions enabling agencies to understand the characteristics of a fraud and automate vast amounts of complex analysis, using data from different internal systems linked to external sources.

Our clients are embedding predictive analytics in their risk profiling. They’re using sophisticated analytical techniques, such as social network analysis. Using analytics to assess risk, unearth evidence of possible non- compliance or fraud, and select cases for investigation allows resources to be focused on the cases that bring the highest return.

Predictive analytics is already flagging and stopping high-risk transactions at the point of interaction with the taxpayer or welfare recipient for a number of our clients.

This is what success looks like in today’s tax and welfare agency.

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