"Technology History"

Fraud in the contemporary business environment
Fraud is big business, and one that is extremely damaging to business. A survey of 120 of the largest organizations in the UK taken by PA Consulting Group puts the figure at £8-10 billion per annum (£40 million per day). Detected fraud amounts, on average, to between 1% and 3% of revenue. Undetected fraud could amount to as much again. Figures vary little across the different business sectors, although the number and relative sizes of frauds varies. In Banking, major losses come through a small number of large frauds, whereas in Retail, Telecommunications and the Government, the converse tends to be true. In insurance there is a mixture of large and small frauds, depending on the type of insurance market and the scale of the risks that are underwritten.

Technology and fraud
The amount of fraud has been rising in most organizations over the last five years and, more worrying, it is expected to continue to rise. A significant factor behind this rise is the increasing involvement of technology, and in particular computers, as an integrated element of the business process. Whilst the image promoted by the media of computer "hackers" as a major source of fraud may be unfounded, fraud is becoming increasingly technically orientated, with fraudsters turning technologies designed as business tools to dishonest ends. In particular, the use of computers brings the matter of speed into the equation, affording the fraudster with the opportunity to exploit weaknesses in the controls in new systems over ever shorter time scales, as well as means by which to put money out of reach of the victim more quickly than was previously possible, and with less risk of being personally identified and caught.

Trends in fraudulent practice
As well as shifts in the tools and methods of fraud, there are significant changes in the fraudsters themselves. These changes are characterized by:

• An increase in fraud committed by staff

The decline in the notion of a job "for life" has left many employees feeling uncertain of what their futures hold, resulting in a reduction in morale and loyalty.

• An increase in fraud involving collusion

As business process become ever more complex, fraudsters have found that teamwork minimizes the chance of being caught. As a result of this trend, some frauds remain undetected for longer and result in larger losses for the victims.

• Increased involvement from organized crime

In many cases, criminal organizations may collude with a member of staff, who in some cases is a deliberate plant.

The result of these trends is the drive for ever more powerful technical tools which can circumvent many of the tradition problems in fraud detection, if not identifying the opportunities for fraud before the fraudsters do so, then detecting the fraud with such speed that losses may be avoided or recovered. Such technologies have the further advantage of acting as a deterrent to fraudsters, by significantly increasing the risk of their being caught.

Prevention and Detection Technologies
Biometrics
Biometrics, which provide a means by which to identify an individual through the verification of unique physical or behavioral characteristics, seems set to supersede the "Personal Identification Number" (PIN) as a basis for the next generation of personal identity verification systems. There are many type of biometrics systems under development. The main schemes include [source: The Biometrics report, SJB]:
¤Fingerprint Verification
Such systems operate by identifying the locations of small marks found in the fingerprint. Fingerprint readability is effected by a number of environmental factors. False acceptance and rejection is estimated at around 0.0001% and less than 1% respectively.
¤Hand-based Verification
Biometrics in this category are based on measurements of the geometry of an individual's hand, of two fingers in the case of some systems. False acceptance is estimated at around 1%.
¤Retinal and Iris Scanning
These systems have the lowest false acceptance rates of all of the available biometric methods. Retinal scanning uses a very low intensity infrared camera to take an image of the back of the eye, whilst iris scanning works by identifying the unique patterns which make constitute the texture of the iris - even identical twins have identical iris texture patterns, which remain the same throughout a person's lifetime.
¤Dynamic Signature Verification
Such systems rely on the manner in which a signature is written, rather than its physical appearance, using either a special pen or a sensitive tablet to evaluate hand movement. Some systems though have difficulties with individuals whose signature changes substantially each type it is written.
¤Voice Verification
Much has been written lately about speech recognition, speaker verification and the idea of a computer being capable to recognize and identify a human voice. Speech recognition is defined as the process of automatically recognizing what is being said. On the other hand, speaker verification is the process of determining which registered speaker provides a given utterance or "voiceprint".
This identification method called Biometric Technology or Biometrics, is defined as the statistical analysis of biological observations and human phenomena. We can examine and identify an individuals biometric features such as fingerprints, retinal patterns, and facial features, but an individual's speech pattern has more unique qualities and is often recognized as the most natural form of biometrics. The human voice is also considered the most common form of communication and is an ideal form of personal identification, because your voice can never be lost, stolen or shared without your knowledge.