People of a certain \u201cvintage\u201d will remember well the speech by former US Secretary of Defence, Donald Rumsfeld when questioned on the lack of evidence linking the Iraqi government with the supply of chemical weapons to terrorists. For many of us it took a second hearing to fully appreciate the difference between our \u201cknown knowns\u201d and our \u201cknown unknowns\u201d, and if you are anything like me then the concept of \u2018unknown unknowns\u2019 \u2013 well that took a little bit longer!<\/p>\n
The speech has been the source of much discussion through the years and the basic principle has been applied to many situations and domains, including Fraud Management.\u00a0 However, one of the most interesting parts of the speech has largely been overlooked in all of the focus on the \u201cknowns\u201d and \u201cunknowns\u201d. In responding to the question Rumsfeld\u2019s first sentence was;
\n\u201cReports that say that something hasn’t happened are always interesting to me\u201d.<\/p>\n
Fraud management, as with most other operational functions, is largely focused on something happening, whether that is in relation to configuring rules in the Fraud Management System or in working out the effectiveness of your business function (people &\u00a0 process). The emergence of certain fraud types through the years has started us on the track of reaping the benefits from looking at things that have not happened as a detection method but for many organizations the principle has not been fully embraced.<\/p>\n
Most organizations are now looking into more detailed analytics, but within these analytics programs, how much emphasis is put on things that didn\u2019t happen?\u00a0 Additionally, in a dynamic environment such as Telecoms Fraud Management even what we \u201cthink\u201d we know (\u201cknown knowns\u201d) may be rapidly out-dated or superseded.<\/p>\n
In the \u201cBig Data\u201d era things are likely to be even more challenging for Fraud Professionals as the haystack just got a lot bigger, so even trying to keep on top of what we think we know is going to be a challenge. To start trying to uncover our \u201cKnown Unknowns\u201d and \u201cUnknown unknowns\u201d,\u00a0 \u2013 that will take INSIGHT.<\/p>\n