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The Decision Factor offers insightful comments and observations on analytics—from views on new technology approaches and market dynamics to the latest industry trends driving demand for faster, smarter information analysis. This blog contains personal views, thoughts, and opinions from SAP employees, mentors, and friends working in the area of analytics. It’s not endorsed by SAP nor does it constitute an official communication of SAP.


High-Speed Analytics — Will It End Fraud, Waste, and Honest Errors?

Several years ago, my son was living with us while he went back to school. Students are usually short of cash, so when my wife and I went on a small vacation, I gave him one of my credit cards for “emergencies.”

Three days later, sitting beside a pool in Palm Springs, my phone rang. My credit card company advised that my card had been stolen and was cancelled. It was used in a college book store and pub, and the total amount involved was less than $100.00. Apparently, my son had experienced some academic and nutritional emergencies in a very short time.

But this was, in reality, an amazing experience. In the course of a few day, sifting through what must have been millions of transactions representing many millions if not billions of dollars, the credit card company determined that these transactions were bogus. They weren’t the type of expenditures I would make, nor were they made in places I frequent.

I traveled widely around the world at that time. My expenditure pattern couldn’t have been easily predictable.

To put this in context, we’ve seen reported instances over the past years where rogue traders were able to execute or falsify billions of dollars in transactions over many years. More recent reports of US and foreign companies suggest millions of dollars of expenditures that may violate anti-bribery or anti-corruption laws. While my experience with the cancelled credit card was well before today’s high-speed analytics, it astounds me that systems that could detect my son’s small credit card expenditures couldn’t detect multi-million and multi-billion dollar frauds or business discrepencies.

High-Speed Analytics: Changing the Future

How will high-speed analytics change the future? For individuals, high-speed analytics will:

  • Detect unusual transactions and patterns of transactions in seconds, not days
  • Identify the sequence and patterns of events
  • Monitor individual human behavior

What will the impact be on fraud, waste, and honest errors at the corporate level?

  • Boards and stakeholders will demand better monitoring
  • GRC professionals will shift their focus from examining historical transactions and events in order to find fraud and waste to analyzing today’s business and predicting tomorrow’s actions
  • Business will become transparent

High-Speed Analytics: An Analogy

We watch sporting events like the Super Bowl in real time. We don’t need an audit report or a compliance inspection, it unfolds right in front of us. We don’t need to confirm the referee’s calls, the time clock, or the movment of the yard sticks, we can see them and confirm their accuracy ourselves.

We simply watch the game and focus on the skills and strategies of the players and teams, and anticipate the outcome

In business, high-speed analytics will shift our focus from the past to the future. Just as in sporting events that unfold before our eyes, when we know businesses are following the rules, we can focus entirely on performance.