Countering Fraud with Big Data Analytics

OFFICIAL GOVERNMENT FIGURES are underestimating the cost of fraud to the NHS by a factor of 20. A former counter-fraud detector Jim Gee claims that fraud is costing the NHS £5bn a year. It is also alleged that hundreds of millions are being wasted every year due to financial errors.

The government disputes the figures and estimates fraudulent losses of £229m per annum. Both numbers are staggering. The potential impact on front line services and patient welfare is stark.

The Chancellor of the Exchequer announced funding for Big Data research in his 2014 budget. What part could Big Data play in helping UK Government and NHS Protect reduce financial crime?

Big Data Analytics – Countering Fraud in a Big Data World

The fraud and risk market is growing fast and Big Data analytics plays a central counter-fraud role. IBM has invested billions in Big Data Analytics and Big Data research. From the intelligence analysis software of i2 to the purchase of Israeli tech company Trusteer, IBM is amassing an impressive arsenal of counter-fraud weaponry.

Big Data Analytics

Big Data, Big Analytics: Emerging Business Intelligence and Analytic Trends for Today’s BusinessesBig Data, Big Data Analytics

IBM report that 25% of large companies will adopt Big Data Analytics for security or fraud detection by 2015. They estimate that $3.5 trillion (USD) are lost each year from fraud and financial crime with $21bn in identify fraud.

IBM Big Data Analytics counter-fraud

IBM Big Data and Analytics Help Stop Fraudsters in their Tracks. (PRNewsFoto/IBM)

Counter-fraud Big Data Analytics will be bolstered by the formation of a dedicated IBM Red Cell that will support the work of IBM X-Force.

Red Cell Rising

A ‘Red Cell’ may sound like an elite fighting unit in Crimea or somewhere to imprison Pussy Riot. It is however a new IBM counter-fraud intelligence task force. Red Cell will provide trend scanning, research and continuous improvement capabilities to counter-fraud Big Data Analytics.

Counter-fraud Analytics in London

IBM is working with London boroughs and is tackling council tax fraud in Camden. Hilary Simpson, Head of ICT Business Partnering at London Borough of Camden said “information we once considered unobtainable is now within our grasp. We have identified at least a dozen specific examples where a Residents’ Index, based on IBM Big Data and Analytics technology can help us. We have estimated that the solution could help to cut single person council tax discount fraud by five percent, potentially delivering major savings for our borough.”

Predictive Analytics

Predictive Analytics: the Power to Predict Who Will Click, Buy, Lie, or DiePredictive Analytics

Big Data Analytics is providing governments and businesses with unprecedented insight into citizen and consumer behaviour. Fraud leaves traces, data can be ‘dusted’ for digital fingerprints. The volume and combination of attributes that can be explored within the data has grown exponentially. Big Data Analytics and counter-fraud algorithms will help forensic investigators expose and prosecute the fraudsters.

The prize is obvious: reducing trillions of dollars in global fraud, and tackling appalling levels of financial crime in health and other sectors.

Big Data Books

  1. Big Data Analytics: Turning Big Data into Big MoneyBig Data Analytics
  2. Big Data: A Revolution That Will Transform How We Live, Work and ThinkBig Data
  3. Big Data at Work: Dispelling the Myths, Uncovering the OpportunitiesBig Data at Work
  4. Data Science for Business: What you need to know about data mining and data-analytic thinkingBig Data and Data Science
  5. Doing Data Science: Straight Talk from the Frontline

The Big Data Budget

LONDON: The British Chancellor of the Exchequer Rt. Hon. George Osborne MP delivered his annual budget this week. Osborne announced a brace of economic measures and reported economic recovery ahead of forecast. His economic strategy balances austerity and growth in manufacturing and high-tech.

Chancellor of the Exchequer Rt. Hon. George Osborne MP with Tech Entrepreneur Steve Nimmons

The author with Chancellor of the Exchequer Rt. Hon. George Osborne MP

£42m funding for Big Data research and a new institute named after code breaker and legendary British scientist Alan Turing was announced. In interviews with and the Smart Data Collective I welcomed the news and warned of an ‘information arms race’. Business of ‘all size’ need to understand this ‘arms race’ and its implications.

Define your Big Data Strategy NOW

Data production is now measured in quintillions of bytes per day. If your customers or competitors have better information, technology and analytics then it is time to worry and urgently get to grips with your Big Data strategy.

Big Data: A Revolution That Will Transform How We Live, Work and Think

This means:

  1. Understanding your critical business information – including ownership, quality, size and scale and growth rate
  2. Understanding your customers and competitors – Customer demands are constantly changing. They want to be treated as individuals, not customer segments. They demand (and deserve) excellent and immediate customer service, innovation and competitive prices. Customer satisfaction must be actively managed and customer sentiment (particularly in the context of social media) must not be ignored Competitors are looking for a competitive edge, which can be found in better information and smarter analytics. If your Big Data strategy is weak (or non existent) expect to see an erosion in market share. If competitors can gain more insight into your customers and move quickly to satisfy emerging need, your business will come under serious pressure
  3. Understand your technology strategy and the Big Data technologies you will adopt in your tech roadmaps (a previous article on Big Data Ecosystems is a useful reference)

Big Data Technology Ecosystem

Big Data Ecosystem by Steve Nimmons

Your Big Data Strategy should answer three critical questions:

  1. What information do I have? (and how can I exploit it)
  2. What information do I need? (and where can I obtain it)
  3. How will I find and then exploit new insights? (for competitive advantage and customer delight)

These are deceptively simple questions.

Beware Big Data Naysayers

The British Chancellor understands that Big Data research will be a key enabler of economic growth for the UK and British businesses. Commentators that claim Big Data is hype are fools. Data growth is exponential and Big Data analytics is critical in every conceivable business context.

Do not ignore Big Data and allow customer dissatisfaction and competitor strength to overwhelm you. As the arms race continues, those that act fast and smart will triumph. Those that act slowly or without focus will suffer the cruellest of fates. The information arms race will not take prisoners.

Data Science and Big Data Books

  1. Big Data at Work: Dispelling the Myths, Uncovering the OpportunitiesBig Data at Work
  2. Analytics at Work: Smarter Decisions, Better ResultsBig Data Analytics
  3. Data Science for Business: What you need to know about data mining and data-analytic thinkingData Science for Business
  4. Keeping Up with the Quants: Your Guide to Understanding and Using AnalyticsUnderstanding Business Analytics
  5. Microsoft Big Data SolutionsMicrosoft Big Data Solutions

Crowdsourcing the Search for Malaysia Airlines flight 370

MALAYSIA AIRLINES flight 370 disappeared in mysterious circumstances. Malaysian authorities are presiding over a spiralling public relations disaster. The tragic loss of passengers and crew is exacerbated by seemingly inaccurate and untimely information. As the search widens, could Crowdsourcing using the internet help solve the mystery of the disappearance of flight 370?

Tomnod Crowdsourcing Malaysia Airlines Flight MH370

Crowdsourcing the search for Malaysia Airlines flight 370, Tomnod and DigitalGlobe

Crowdsourcing – as old as Civilisation Itself

Crowdsourcing is using the wisdom, experience and enthusiasm of a crowd to solve problems. It is as old as civilisation itself. In the digital world, Wikipedia is Crowdsourcing, the internet itself is Crowdsourcing – information provided and shaped by the crowd at unprecedented scale.

Getting Results From Crowds

The potential of “the Wisdom of Crowds” has long been recognised by problem solvers, product designers, businesses and governments. In the search for Malaysia Airlines flight 370, an ingenious solution from Tomnod (a subsidiary of DigitalGlobe) is attracting significant attention.

Tomnod, Crowdsourcing the Search for Malaysia Airlines Flight MH370

DigitalGlobe has positioned satellites over the primary search areas. It provides map data via the Tomnod website for volunteers to analyse. Tomnod subdivides the satellite image data into sets of ‘map tiles’ and displays them to volunteers to search for signs of wreckage, life rafts or oil slicks. Millions of volunteers are using Tomnod and DigitalGlobe’s technologies to search for the missing flight.

When a volunteer identifies an area warranting investigation, they mark the map tile. Each map tile is studied by successive volunteers and if others mark the same areas, expert resources use more detailed satellite images to confirm or rule out any ‘sighting’.

Malaysia Airlines Flight 370 Tomnod Crowdsourcing

The search for flight 370

A key benefit of the Tomnod approach is that massive amounts of satellite imagery can be searched quickly by massively subdividing the task among volunteers. This is efficient and cost effective and allows more specialist resources to look at detailed images from areas highlighted by the large volunteer group.

As the search areas widen, Tomnod can ‘easily change’ focus by providing new satellite data. As the ocean is ‘ever-changing’ continuous re-searching is also necessary. Tides and drift may bring wreckage, life rafts or fuel slicks into previously ‘cleared areas’.

Challenges in Crowdsourcing this Type of Problem

The main challenges are the experience of the crowd, the quality of the images provided to them and the scalability of the web platform. As millions participate, it becomes hard to provide high-resolution images to huge numbers of participants. Bandwidth and server performance drop and outages occur.

Tomnod Crowdsourcing Technical Error

Technical issue on the Tomnod site (18th March 2014)

The experience and ability of the crowd matters. As flight MH370 has yet to be found, ‘all’ items marked by Tomnod volunteers are ‘false positives’. Looking at more detailed image data, the false positives come from volunteers identifying (what turns out to be) commercial shipping.

We talk about ‘searching for a needle in a haystack’. I think of the Tomnod Crowdsourcing approach as looking for the haystacks in which to look for the needles. Volunteers with low-resolution satellite images may find haystacks. Specialists with high-resolution images can look within those haystacks.

Is Crowdsourcing Better for Approximation?

The search for flight MH370 is binary, it is either found or it is not. Tomnod used its technology to good effect in Somalia when they mobilised a large volunteer network to search images for evidence of displaced populations. They tasked volunteers to look for temporary dwellings, which would indicate displacement of refugees fleeing conflict. The project was successful, but the problem itself was tolerant of ‘approximation error’.

The Somalia problem was one of ‘size and scale’, and Crowdsourcing the estimation of ‘size and scale’ is relatively simple. The search for Malaysia Airlines flight 370 is harder, as the outcome is not an approximation and therefore has no tolerance of error.

Keeping the Crowd Engaged and not Enraged

The size of Tomnod’s volunteer network is impressive, but keeping 3 million volunteers engaged is challenging. I mentioned in the opening that Crowdsourcing is as ‘old as civilisation itself’, but we have only started to ‘scratch the surface’ in terms of understanding how to best use (and motivate) massive crowds in online problem solving.

The Gamification of Learning and Instruction Fieldbook: Ideas into Practice

Gamification shows enormous potential. Recent projects from Cancer Research UK, such as the ‘play to cure’ games are particularly interesting.

Crowdsourcing can also be dangerous if not adequately monitored and moderated. Crowds can turn into mobs and a mob with poor information, prejudice and social media can quickly become hysterical and uncontrollable. The search for the Boston Marathon bombers gave us insight into the potential dark side of Crowdsourcing.

It is uncertain whether the Tomnod project will help locate flight MH370. What is clear is that a massive number of volunteers want to help. Crowdsourcing on a massive scale has high potential but arguably needs more sophisticated models and tools.

As anguish for relatives and friends continues, it can only be hoped that the mystery of flight MH370 is resolved quickly. The ‘Power of the Crowd’ might prove to be a critical factor.

Books on Crowdsourcing, Gamification, Serious Gaming

  1. Disaster Communications in a Changing Media World
  2. Crowdsourcing (MIT Press Essential Knowledge)
  3. Gamification at Work: Designing Engaging Business Software
  4. Gamify: How Gamification Motivates People to Do Extraordinary Things
  5. Serious Games for Business: Using Gamification to Fully Engage Customers, Employees and Partners

Front Office Digitisation Critical to Customer Experience, Satisfaction and Growth

CUSTOMER EXPERIENCE, satisfaction and engagement is storming the CIO Agenda. A study compiled by the IBM Institute for Business Value found that 60% of CIOs are focusing on improving customer relationships and customer experience. With the rise of social media, digital transformation and new business models, is the customer “the CIO’s new boss?”


PRNewsFoto/IBM – Infographic The CIO’s New Boss: Customers

The IBM Institute for Business Value study is based on interviews with 4,000 C-Level executives (1,600 CIOs) across multiple geographies and industries. Peter Korsten, global leader, IBM Institute for Business Value said “the study reveals the emerging reality that there is no longer any real distinction between the customer experience and contemporary business strategy. The quality and nature of the front-end experience has become the point of entry to the most valuable information any enterprise can possess — information about its customers, employees, or any other relevant constituent group.”

The Ten Principles Behind Great Customer Experiences (Financial Times Series)

Customer Experience, Analytics and the Digitisation of the Front Office

IT has ‘two-speeds’ in modern businesses. Commodity IT or utility IT is slow moving, but reliable within the back office. Digital speed IT is differentiating, disruptive and transformative. It is what performing businesses need to drive their front office capabilities. CIOs understand the pressures and opportunity of customer centricity in a digital social world. IBM’s report highlights that 82% of CIOs are planning investments in front office digitisation.

Customer analytics, social engagement, sentiment analysis, reputation and brand management and digital marketing all play in this space. The CIO Agenda is focusing less on back office IT and more on digital strategy in the front office. The CIO needs to ensure that Big Data analytics and other customer engagement technologies are ready for use by the CMO (Chief Marketing Officer) and other customer engagement functions.

Analytics at Work: Smarter Decisions, Better Results

For IT functions to remain relevant they need to respond quickly to this ‘two-speed’ world. 66% of CIOs said that they had their ‘technology basics’ under control. This allows the more advanced to focus on customer experience and engagement through the digitised front office.

Customer Experience and Cloud Computing

Customer influence continues to rise and over 50% of CxOs said that improving internal and external collaboration and removing communications barriers were key focus areas. Cloud Computing is rising further on the CIO Agenda as CIOs recognise the potential of Cloud platforms to enable smarter customer engagement.

The Immense Power of the Customer

Businesses are recognising the immense power of the customer in a social world and an increasing demand to treat ‘the customer as an individual’. Collaborating with customers and recognising their influence is critical and drives the need for more openness and trust. The power of the customer is being amplified by social media. As much as this is beneficial, there is a undeniable reality that as that power rises, so too do expectations and intolerance to poor service.

The smart business is thinking about customer engagement and collaboration and harnessing the power of the customer in strategic decision making.

Open Innovation and Digital Strategy

The CMO understands the need to overhaul customer engagement, putting responsive and smart digital technology offerings ‘centre stage’. CIOs wrestling with digital strategy and front office digitisation also understand that they need to better employ external innovation.

Understanding Digital Marketing: Marketing Strategies for Engaging the Digital Generation

This is creating exciting new partnerships and market opportunities. It is introducing new (sometimes surprising) participants to established markets. Open Innovation will disrupt established markets and businesses would be well advised to watch out for ‘left-field’ competitors.

Customer Engagement and Social Media Strategy

The CMO is very much at the vanguard of customer engagement and digital strategy. The CIOs focus is shifting from the traditional IT function to the fast-moving world of digital and social. IBM’s report found that ‘lack of a cohesive social media plan’ was a significant impediment to realising that strategy. Mobile, multi-channel engagement and more customer experience management are key areas of focus in this area.

Customer engagement through digital channels remains a key focus for growth. 57% of CEOs anticipate that digital channels will become a primary communication means over the next 5 years. Engaging customers in social business is a major deficiency for many companies and a strong CMO is needed to meet this challenge.

The Customer in Control

It is hard to argue with the logic that the ‘business that best knows its customer will flourish’. This is timeless business sense, but it is also dangerously incomplete. Customer preferences are fickle and businesses will need to partner and leverage external innovation to keep pace with rapidly moving customer demands. This underpins the need to get ‘digital speed IT’ working in your business – and fast. A 360 degree view of the customer and perfect customer engagement is only truly useful if the business can respond quickly to the opportunity or threat.

Some CxOs are supportive of even greater customer engagement with the creation of Customer Advisory Boards. These go much further than traditional focus groups. Rather than product testing, Customer Advisory Boards would give the customer an influential voice in the formulation of business strategy. More than half of CEOs interviewed said that customers had a major influence on their business strategy. A third of CEOs also worried that their C-Level colleagues were ‘out of touch’ with customers.

About the IBM 2013 Global C-Suite Study

  • IBM conducted its in-person analysis with more than 4,000 C-suite leaders by using a global team of business strategists, consultants, data scientists and statisticians. More information about the IBM Institute for Business Value (IBV) can be found here.
  • Access the full CIO Study findings here
  • Download the IBM IBV app on your Android or iOS tablet.  
  • Join the conversation on Twitter at #CSuiteStudy and #IBM. You can follow the IBM Institute for Business Value on Twitter at @IBMIBV

Customer Experience Books

Singapore Tech Startups Demo Innovation at SWSX

SINGAPORE TECH STARTUPS are demonstrating innovative products at SWSX (South by Southwest) conference in Austin, Texas. Products from,,, Gushcloud, Nanoveu, RecordTV, Touchjet and Zensorium are being showcased by the Infocomm Development Authority of Singapore (IDA). 

English: boat quay Singapore skyline cbd marin...
Singapore skyline Photo credit: Wikipedia

Executive Deputy Chairman of IDA, Steve Leonard said, “We are happy to showcase a strong line up of some of the great tech product startups being built in Singapore. All parts of our ecosystem including investors, corporate partners, universities and the Government are actively working to ensure Singapore is a great place to create and build high growth tech product startups.”

The Lean Startup: How Constant Innovation Creates Radically Successful Businesses

Tech Startups Being Showcased

This year at SWSX the IDA of Singapore will showcase products from 8 Singapore based tech startups ranging from security to customer engagement to 3D video to consumer tech and health. This is IDA Singapore’s 4th showcase at SWSX.

1. is a surveying platform aimed at affluent consumers. It has been developed by Agility Research & Strategy and aims to be a disruptive player in market research. It allows end users to create DIY surveys with a focus on 20 key world economies. Affluential claims an impressive reach, with the ability to garner market insight from 38m consumers.

2. provides security management capabilities for distributed content. Its model is similar to platforms like ‘Snapchat’ where content distribution and destruction can be tightly controlled. Digify allows users to check who has viewed content and set granular sharing controls on both personal and corporate information. Controlling security on distributed content is an interesting market with massive growth potential.

3. helps product and service vendors better engage with customer sentiment and social ratings. Eco uses artificial intelligence, cognitive computing and extensive text analysis to build an holistic view of customer satisfaction. Customer engagement, sentiment analysis, online reputation monitoring, rewards and loyalty management applications are all relevant.

4. GushCloud

Gushcloud is an influencer network that helps connect advertisers and influential publishers. This spans celebrities and social media influencers including top bloggers and online publishers (across YouTube, Vine, Twitter, Instagram, Pinterest etc.). Sales and marketing using influencer networks has had some detractors bringing ethical selling into focus. As GushCLoud’s website says “Some people call it legalized bribery, we call it the obvious thing to do when you value someone’s time.

5. Nanoveu EyeFly3D

Nanoveu EyeFly3D is a very clever use of nano-lenses (500,000 in the palm of your hand) to bring 3D screen capabilities to tablets and mobile phones. 3D video and gaming on smartphones and tablets is an exciting prospect. The EyeFly3D applies leading nano tech to deliver ‘true glasses free’ 3D capabilities on smartphones. Mobile 3D video will be transformative. 

6. RecordTV

RecordTV takes personal digital recording into the cloud. The days of physical home recording devices are numbered, as massive personal storage and streaming capabilities are provided through cloud services. RecordTV enables consumers to record free to air television in Singapore. A smartphone, laptop or smart TV can be used to record and watch programs. The RewardTV model highlights how archaic home recording on physical devices really is. The cloud model will shift this market and soon!

7. Touchjet TouchPico

TouchPico by Touchjet debuted at CES 2014 in Las Vegas. It is an Android portable projector that “turns any surface into a giant touch screen for Android apps.” TouchPico is likely to cost around $500 and start shipping in June 2014. TouchPico is likely to sell well in home entertainment markets, and shows interesting potential in education (visual aids in classrooms etc.).

8. Zensorium Tinké

Zensorium Tinke is a health and well-being device that monitors heart rate, heart rhythm and blood oxygen levels. Health tech is becoming increasingly crowded, particularly with the launch of many wearable tech devices. I like Zensorium Tinké’s Vita Index and Zen Index but I do wonder if ‘over health monitoring’ will improve either. There is an ‘accompanying’ smartphone app and data from the device can be loaded onto smartphones for analysis.

Tech Startup Accelerators in Singapore

The IDA helps drive tech startup growth in Singapore and provides three critical functions to startups in the region. It provides physical innovation and development spaces through IDA Labs. Through its investment arm Infocomm Investments Pte Ltd, IDA seeks opportunities to bring accelerator programs from around the world to Singapore. Its goal is to stimulate and drive maximum growth in tech innovation and development.

IDA Singapore also provides an accreditation program that helps entrepreneurs commercialise and take their products to market.

For more information about the Infocomm Development Authority of Singapore, see

Tech Startup Books