Given that fraud costs the government an estimated £31 billion to £49 billion every year, it’s no surprise that this issue is a highly-charged and emotive part of the political agenda. To tackle this high cost, reforms to the government’s anti-fraud efforts are vital. Steps to improve the situation are ongoing and have been detailed in a recent government consultation on this topic.
As highlighted by reports into the level of fraud in Universal Credit provision, and revelations about difficulties in the outsourced Action Fraud helpline, there is a growing concern that the existing system of fraud protection is not sufficient in the face of this ever-increasing threat.
This problem has risen to prominence in recent years with national media scrutiny focused on both the rising cost of fraud and efforts to address it. The many millions lost each year have become an uncomfortable point for those across the government and civil service charged with protecting us.
In truth, however, the government’s anti-fraud capabilities have progressed remarkably in the last few years. The latest available figures, contained within the Cross-government fraud landscape annual report 2019 , show that in total, £474 million of detected fraud has been found in the past five years, of which £250 million (or 53%) was in the past two years.
A refreshed and revitalised approach to counter-fraud action is needed.
The figures look impressive and demonstrate that there is strategy and resource in place to tackle this issue and protect the government, businesses and individuals, which bodes well for continuing improvement. However, the rate of change is not commensurate with the increasing capabilities and boldness of those committing fraud, and a refreshed and revitalised approach to pan-governmental counter-fraud action is needed.
Creating an engine to drive a path through this multi-billion pound problem will require radical disruption - the fuel and tools for which are already within the government machinery. Chief among the changes that need to happen is a true focus on data and its uses across the government body.
To this end, much more collaboration between public and private is needed - in practice, this means more data sharing. Currently, there is not a lot of cross-sector sharing between the public and private sector, so there is limited information and insight flowing into the government and feeding into how the two sides can work together to protect against fraud.
Assuming there are processes and agreements put in place to share information across the public/private divide - conforming, of course, to relevant data protection regulations - the next step is working out how to use it. A recent Public Accounts Committee (PAC) report into the government’s approach to data makes clear the scale of the challenge in this area. The recommendations in the report include a call for a real focus on leadership and pressure to change across all departments, with Cabinet Office and DCMS (the Digital, Culture, Media and Sports Committee) driving cross-department collaboration.
Pressure is needed for a cultural change alongside the technical process.
This pressure needs to be directed towards driving the most effective and impactful cultural change, alongside the technical process. Here is where a ‘data mindset’ will come in. It is a technologically-driven way of working, a system of constantly referring to facts and information and querying how teams develop and share insight to make it work on an ongoing basis.
TransUnion has contributed a section on this topic. “Developing a data mindset,” to the government paper which seeks to identify ways of improving the fraud efforts across government. This data-focused approach to fraud discovery and prevention is something to be recommended - not just because it’s good practice, but more visibility and analytical capabilities will be of benefit from a regulatory perspective, providing rationale for decisions and clear audit trails.
The intention of the recent consultation is to ensure that government continues to work with the public and private sector to build public confidence in the use of data and address outstanding issues and challenges, such as those associated with data quality, access and analytical capability.
Findings are filtered through a data-mindset back into the process.
Cracking this organisational barrier is crucial to achieve the government’s stated goal - becoming more adept at identifying fraud and error and then turning investigation into preventative action. Simply put, this means engineering the findings, filtered through a data-mindset, back into the process based on what has been learned and using that to tackle more sophisticated fraud.
The government has already worked with the private sector and enacted policies and procedures to enable government partners to share data with each other, but there is a long way to go. As a highly-recommended first step in the journey, in addition to addressing the core issues of data management as highlighted in the PAC report referenced, the focus should be on having more government departments involved in organisations like fraud prevention service CIFAS that also contribute to research and innovation in technology, techniques and policies, and so build a data-based collaboration.
To function as a force for good, the public sector has to keep up with the continually-evolving tactics employed by fraudsters. With the scale of fraud loss evident, a rigorous and refreshed approach is necessary - one that efficiently traverses departmental boundaries and results in up-to-date and highly-effective methods of prevention and detection being put in place.
What’s needed is an overhaul in the government’s technical and organisational approaches to incorporate a data mindset - putting sharing and collaboration with private sector experts at the heart of its operation. Only then will it be able to address the real problems faced by the likes of the vulnerable elderly, who are one of the targets for bank transfer scams, or the Universal Credit claimants who face reduced payments because a fraud was committed in their name. And only then can this new mindset fully deliver the security and peace of mind for the people and businesses of the UK in this ongoing battle against fraud.